SMBs struggle to keep up with digital shopping demands as tech gap widens

Small and medium-sized businesses face significant challenges in adopting digital shopping features compared to larger retailers, with gaps in mobile apps, payment methods, and cross-channel experiences. Recent developments from Google and Shopify offer solutions, but adoption barriers remain high.

As digital shopping becomes the norm, small and medium-sized businesses (SMBs) are struggling to keep up with larger retailers. Only 34% of SMBs offer branded mobile apps compared to 89% of enterprise retailers, and payment method disparities persist. Recent updates from Google and Shopify aim to bridge this gap, but challenges remain.

The Digital Divide Between SMBs and Enterprise Retailers

As of May 2023, only 34% of SMBs offer branded mobile apps versus 89% of enterprise retailers, according to Salesforce data. This gap extends to payment methods, with 71% of large retailers now supporting buy-now-pay-later (BNPL) options, while just 22% of SMBs do, as reported by PYMNTS.com.

Recent Developments Offering Hope

Google’s May 24 update to Business Profiles enables SMBs to display in-app purchase options directly in search results, helping them compete in mobile discovery without app development costs. Shopify’s new 'Unified Commerce' tools, launched May 30, help SMBs synchronize inventory across social media shops and physical POS systems at 60% lower cost than custom builds.

Barriers to Adoption

Visa reported on May 28 that 68% of SMBs cite PCI compliance costs as the top barrier to offering digital wallets. However, third-party processors can reduce this burden by 80%. Walmart Connect expanded its third-party ad platform to SMBs on May 29, enabling targeted social commerce campaigns through existing product catalogs.

Historical Context

The digital divide between SMBs and large retailers is not new. In the early 2010s, the rise of e-commerce platforms like Amazon created similar disparities. However, the current gap is more pronounced due to the rapid adoption of advanced technologies like AI and machine learning by large retailers.

Looking back, the introduction of mobile payment systems like Apple Pay and Google Wallet in the mid-2010s also highlighted the challenges SMBs face in adopting new technologies. These systems required significant upfront investment, which many small businesses could not afford. Today, third-party solutions are helping to level the playing field, but the pace of technological change continues to pose challenges.

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