Happy New Year! If the third quarter of last year. was any indication, 2015 is going to be a good. year for small and independent businesses.

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Millicent King
8 years ago
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1 ShopKeep Small Business Index Q Letter from Norm Merritt President & Co-CEO Happy New Year! If the third quarter of last year was any indication, 2015 is going to be a good year for small and independent businesses. The Q ShopKeep Small Business Index reveals a great deal of optimism for last quarter and the year ahead. As with the third quarter of last year, ShopKeep merchants had a favorable outlook for the fourth quarter and experienced a great deal of growth -- and the trend only continues. The same store sales data and the feedback we gathered from the customer survey revealed that ShopKeep businesses are growing and our users are looking forward to -- if not expecting -- additional sales growth this year. Ninety-three percent of those who took the survey expressed general optimism about their businesses going into the first quarter of this year, and within that group, almost two-thirds -- 64% -- expressed that they were very optimistic. Additionally, 83% of respondents reported fourth quarter sales volume that was greater than or equal to third quarter sales, supporting the National Retail Federation s findings that holiday retail sales hit their highest level since Contents 1 Letter from Norm Merritt 2 Healthy Economy + Strong Business Outlook 4 Focused on Marketing 7 Technology & Data Security ShopKeep business owners are using social media to their advantage as well. Our survey revealed that 90% of respondents manage their marketing in-house and consider social media to be the top driver of traffic to their businesses followed by their own websites. A whopping 83% of ShopKeep businesses use social media channels to share news about sales and promotions and to connect directly with the community and gather valuable customer feedback. As you can see, strategic social media marketing is helping to drive business to ShopKeep users stores, and combined with a strong holiday sales period, are fueling merchants confidence for 2015 growth.

2 2 Methodology ShopKeep compiled the ShopKeep Small Business Index by using users same-store sales and data from a survey of 7,485 randomly selected ShopKeep merchants living in the United States and Canada in December Of those selected for the survey, 984 responses were received a response rate of 13% percent. Healthy Economy & Strong Business Outlook Business is booming for ShopKeep users. The survey results and same-store sales data reflect a period of growth and strong holiday sales -- 83% of respondents reported fourth quarter sales volume that was greater than or equal to third quarter sales. Ninety-three percent of respondents expressed general optimism about their businesses going into Q1 and within that group, 64% expressed that they were very optimistic. Additionally, 40% of ShopKeep users feel that this quarter is a good time to expand the business. Optimistic about their Business = Not at all 5 = Completely 5 0% 10% 20% 30% %40

3 3 Other notable economic findings include: - ShopKeep s same-store sales data reflects a 12% year-over-year increase in the number of speciality food store transactions and a 19% year-over-year increase in transactions from specialty services, such as non-profits, health care providers and auto shops. - Q sales figures reflect a 10% increase in the number of clothing store transactions compared to Q Average same-store sales figures from December 2013 to December 2014 show an increase in the average transaction size per retailer and a 10% increase in total number of transactions across ShopKeep retailers. While sales at ShopKeep businesses increased, the average selling prices were the same as compated to the third quarter. What this tells us is that consumers are getting more products and/ or services from ShopKeep merchants, and the merchants couldn t be happier. Seventy percent of survey respondents reported that they are not planning to increase selling prices during the second quarter given the satisfactory sales growth they are currently experiencing. Q4 Average Selling Prices VS. Q3 63% 31% 6% maintained as the third quarter have a higher average compared to the third quarter have a lower average since the third quarter

4 4 Focused on Marketing ShopKeep users are acutely aware of the power of marketing, and they use a number of ways to actively engage their consumer base. The fourth quarter survey shows that 90% of ShopKeep users manage their marketing in-house and 91% are using social media to do so, which is consistent with our third quarter findings. Marketing Used to Drive an Increase in Business 17% 51% 65% 91% Business website Direct mail Social media Facebook was again the top driver in the fourth quarter with 62% of respondents using the platform, which is consistent with our findings from the third quarter.

5 5 Social Media Outlets Used in Marketing 62% 5% 11% 4% 3% None 6% Other 9% Eighty-three percent of respondents said that they use social media outlets to share information on sales and promotions with their customers and to gather valuable feedback.

6 6 How Businesses are Using Social Media: # Measure trends Gather feedback/listen Share information Allow others to share 19.41% to customers 82.68% information 49.75% 53.19%? Provide customer support 26.54% Conduct market research 10.32% I do not use social media for marketing 6.88% Other 2.21%

7 7 Technology & Data Security As we draw closer to the chip card transition, payment data security is still top of mind for ShopKeep users. The fourth quarter survey revealed that a majority of respondents (63%) are concerned about the security of their customers credit and debit card data. Although there is concern, ShopKeep users are confident in the solutions they have in place, which include a combination of merchant services and a secure point of sale system. Since Apple Pay was introduced, and other providers promise to bring an NFC/contactless payment solution to market, it seems that merchants are almost split as to whether or not this payment technology will impact their business. Forty-eight percent of survey respondents feel that NFC will impact their business because this technology will speed up transactions and bring increased revenue to their establishment, but they are also aware of the cost associated with adoption. Of those who do not think that contactless payments will impact their business, they cite an older customer base, no plans for adoption or not having a business conducive to the payment type. Will NFC Impact Your Business? 51% 48% Yes No

8 8 When asked the same question about chip cards, aside from needing new hardware, 40% of the respondents stated that chip cards would impact their business because customers would see them as taking additional measures to providing enhanced security for credit and debit card transactions. The 60% of ShopKeep users who did not see an impact to the transition were either unaware of chip card technology, trusting their banks and point of sale provider or were based in Canada, where chip cards are already in use. Will Chip Cards Impact Your Business? Yes 40% No 60% When it comes to these new payment technologies, one thing is clear from merchant feedback -- more education is needed because the intricacies of contactless payments and chip cards are not top of mind for independent business owners. Norm Merritt, ShopKeep s president and Co-CEO penned a whitepaper on the need for a change and what it means for independent businesses across the United States. To read what he has to say on the topic, visit resources/future-of-payments-technology.

We are pleased to share the first ShopKeep Small. Business Index, a quarterly report that provides. valuable insight into the prevailing opinions,

ShopKeep Small Business Index Q3 2014 1 Letter from Norm Merritt President & co-ceo We are pleased to share the first ShopKeep Small Business Index, a quarterly report that provides valuable insight into