“A recent RBC Small Business poll revealed that Canadian business owners and consumers alike say technology will continue to play a critical role in the future of small businesses. In this interview, RBC’s Don Ludlow joins us to share poll results and his insights on the impact of digital technologies on business today.”
RBC’s Don Ludlow discusses the impact of digital technologies on small businesses, highlighting the sustained growth in the digital economy and the importance of finding the right balance between digital and human experiences. He emphasizes the need for businesses to adapt their strategies and operational practices to address new consumer demands. Ludlow also shares insights on key indicators of business success and offers advice on how small business owners can invest in continued digital transformation and adoption to remain competitive in an ever-evolving landscape.
Don is the Vice President Small Business, Business Financial Services Strategy and Partnerships at RBC. He is responsible for leading RBC’s Small Business segment and teams. In his role, Don provides strategic oversight in delivering market-leading client experiences through innovative partnerships and differentiated, beyond-banking solutions to help aspiring entrepreneurs and Canadian business owners start, manage and grow their ventures.
The past few years since the pandemic have seen a rapid acceleration towards the adoption of digital technologies in the way we interact with businesses. Is there still appetite for digital experiences among Canadians, or do Canadians feel it’s reached an apex?
Our most recent RBC Small Business survey reveals that Canadians see sustained growth ahead in the digital economy and indicates their continued desire to engage with businesses online in new ways.
Less than half of Canadians (46 per cent) believe growth in ecommerce has peaked, signaling more opportunities to digitally engage with consumers. However, a majority of small business owners (57 per cent) report that the ecommerce economy has reached an apex, highlighting a gap that business owners should look to bridge between their own beliefs and consumer expectations.
Indeed, many Canadians foresee a future where e-commerce and technology remains firmly embedded in the way we live, shop, and do business. Successful entrepreneurs will be those who adapt their business strategies and operational practices to address these new consumer demands.
Though Canadians have indicated their continued appetite for e-commerce and digital experience, the findings reveal that human experiences are also important for the future of small businesses. Why is it important for small businesses to find the right balance between digital and human experiences?
When it comes to digital and human interactions, the poll indicates that the preferences of consumers aren’t ‘either/or’ – instead, they ‘want it all’ and choose depending on the context of how they interact with businesses and brands. Accordingly, a balance between digital and human interactions will be important for the future of small business – especially when you account for the preferences of the younger generations.
More than half of millennials (51 per cent) and two-thirds of Gen Z respondents (59 per cent) say they would prefer more digital interactions in the shopping experience. Similarly, six in ten Gen Z (66 per cent) and half of millennials (55 per cent) desire more digital interactions in their payments and checkout experiences.
Yet, when it comes to customer communications and marketing, eight in ten millennials (79 per cent) report that they would prefer more human touch – a sentiment shared by Gen Z (77 per cent). Three-quarters of Gen Z (74 per cent) would want more human touch to resolve customer issues and queries, with this number rising to 84 per cent among millennials.
You’ve mentioned that technology now makes it easier than ever to start a business. But once you’ve started a business and gotten beyond day one, how do you know if your business is on the right track to survive and thrive in the long term?
While continuing to create digital touchpoints to deepen relationships with consumers is key to entrepreneurial success, small business owners polled say that the following are also important indicators of a thriving business on the path to sustained growth:
- Establishing base of loyal repeat customers (63 per cent)
- The ability to innovate and create new opportunities (51 per cent)
- Having the funds to invest in growing and developing teams (48 per cent)
- Hitting sales and/or new client acquisition growth targets for two consecutive quarters (47 per cent)
- Recording positive cash flow for two consecutive quarters (49 per cent)
- The ability to successfully secure additional growth funding from external sources (42 per cent)
How should small business owners look to invest in continued digital transformation and adoption?
For small business owners, a steady approach to investment in digital transformation will allow them to sustain momentum in creating a digitally-enabled business model and meeting customer expectations over the long-term. Three suggestions for areas to invest in when digitally-enabling your business include:
Streamline your finances and accounting processes. While paper invoices and cheques are still used across businesses, the digital transformation of payments, deposits and accounting has become as easy as it is efficient, thanks to the multitude of solutions available.
For example, you can request and receive payments from customers by using Interac e-Transfer. With the Autodeposit feature, you instantly and securely receive funds without having to log on and answer a security question. As well, adopting invoice and accounting software such as RBC’s PayEdge can help to keep track of cash flow, forecasting and automate bill payments.
Digitize your supply chain. The goal of moving your supply chain to a digital environment is to minimize waste and increase productivity. To transform your existing supply chain process, investing in inventory management software can allow you to manage your inventory and check stock levels in real-time. More complete systems will also send automatic low inventory notifications and generate purchase orders to replenish your stock.
In addition, consider moving your supply chain to the cloud. Cloud-based services can connect everyone in the supply chain, giving you visibility throughout every part of your network. Cloud-based supply chain management further allows you to respond to rapidly changing demands, monitor delivery networks and react to volatility — before it becomes a problem.
Use data to support your decision-making. Once you have implemented digital processes across your business, you can use the data you have gathered to inform and support the decisions you make about the operation and growth of your business.
For this, online tools and platforms like RBC Insight EdgeTM for Small Business that provide real-time intelligence on client activity, preferences and spending patterns can be invaluable to dig deeper into your customers’ wants and needs, and to tailor your inventory accordingly.
Realizing the full benefits of digital transformation isn’t immediate – instead, it requires steady investment and long-term commitment to this ongoing journey. By rethinking how and where they do business and reinvesting in their own growth, Canadian businesses can tap into emerging technologies stay competitive in this environment.