Many small business owners overlook trends in the industry and think of them as shortsighted solutions that will disappear almost as quickly as they appeared.
While every year ushers in a host of fleeting fads, some trends become so ingrained in mainstream society that it’s difficult to imagine a time without it (think of smartphones in the late 2000s).
This year, trends like cashless payments, artificial intelligence, personalization and alternative lending have surpassed the “fad” phase and proved their staying power in the business world. Here’s what you need to know about these emerging business trends in 2020.
Cashless commerce
Cashless payments in the form of credit and debit cards have long been the favored payment method among American consumers. According to the 2016 U.S. Consumer Payment Study, 75% of respondents preferred using a credit or debit card as a payment method. Only 11% of respondents stated they preferred paying in cash.
Today, consumers have even more options for next-generation cashless payment services, including digital wallets such as Apple Pay or Google Pay, peer-to-peer payment apps like Venmo or PayPal, and in-app payment systems, such as those used by Uber or Lyft.
Most recently, Amazon Go has pushed the cashless commerce bar further by skipping the checkout line in their stores. Thanks to computer vision, deep learning algorithms and sensor fusion, shoppers can walk into an Amazon Go store, select their items and walk out without stopping by a register.
As these technologies continue to grow and become widely adopted, consumers will rely less on credit or debit cards and more on their smartphones to make a payment.
[Read: Tap, Wave, Go: Cashless Commerce is Coming]
Artificial intelligence
Artificial intelligence (AI) and machine learning have left the realm of science fiction books and now help brands engage and interact with customers. Chatbots are quickly becoming one of the most popular methods brands use to provide AI-powered, personalized services to their customers, such as ordering food, hailing a ride or making product recommendations.
AI isn’t limited to chatbots, however. Walgreens is currently piloting Cooler Screens’ smart displays to deliver targeted ads to specific types of users. These screens are designed to collect data from consumers to help marketers sell products. The coolers use face-detection technology to determine a customer’s age and gender to deliver specific, relevant ads.
Human resources is another industry poised for an AI takeover, despite some resistance. As other industries quickly adopt AI, the ethical implications of AI for HR professionals raise concerns over hiring discrimination. The fear is that AI algorithms may indirectly violate discrimination laws by teasing out protected information, such as age, religion, race, etc.
However, by leveraging AI to automate mundane or routine tasks, such as scheduling interviews or updating potential candidates, HR professionals can free up their time to interact with candidates on a deeper level. This is becoming increasingly important, according to Sujay Rao, vice president, general manager, talent acquisition products at Korn Ferry.
“Now it’s the candidate who is king,” Rao said in another CO— interview. “Candidates want to be treated well because they have a lot of opportunities. Why would they talk to you if you do not treat them well?”
With AI’s ability to shortlist promising resumes, build detailed candidate profiles, collect information via voice and text, and more, HR professionals have the time to treat candidates like royalty and, hopefully, turn them into brand ambassadors.
Personalization and the customer experience
Personalizing the customer experience is becoming essential to retaining customers. An Epsilon study published in 2018 reveals that 80% of consumers stated they were more likely to do business with a company that offers personalized experiences. Big companies have been watching this trend closely, and some of the largest brands are investing in personalized customer experiences.
Earlier this year, McDonald’s Corp. recently acquired Dynamic Yield, an Israeli-based tech company that specializes in machine learning to provide suggestions to e-commerce shoppers. National restaurant chains are starting to invest in data analytics to provide a higher level of personalized experiences and communications with their customers.
The earliest forms of an enhanced customer experience in the industry can be traced back to user-friendly apps developed by pizza chains. Starbucks’ loyalty program took the personalized experience a step further by rewarding repeat customers with discounts and personalized product offers.
Similarly, in the career space, Monster.com is focusing on personalizing the job hunt through artificial intelligence and machine learning, in an effort to win back market share from rival LinkedIn.
[Read: Sweetgreen Builds Customer Experience and Growth Around Sustainability and ‘Deliciousness’]
Personalizing the customer experience is becoming essential to retaining customers.
Alternative lending
2018 was a big year for alternative lending. Although non-bank lending has been growing for years, a combination of several factors has led to its widespread adoption.
According to Fundera, alternative lending has become much more popular in recent years because of the variety of financial products available (merchant cash advances, factoring, equipment loans, etc.) and the speed at which funding can be secured. Additionally, alternative lenders are more willing to loan to small businesses with bad credit than traditional banks, which became increasingly cautious when lending to small businesses after the 2008 recession.
Out of all these reasons, the biggest contributor to the rise of alternative lending is the high rejection rate among traditional lenders. Big banks reject an estimated 80% of all small business loan applications, resulting in small business owners looking for alternative funding sources.
As these 2019 business trends continue to embed their roots deeply across industries, businesses large and small can capitalize on them and ride their wave of influence in the years to come.
Influencer marketing
For many people, influencer marketing is indistinguishable from celebrity endorsements, but they are very different. Influencer marketing is the process of finding specialists in your niche to spread awareness of your product via word-of-mouth marketing. Generally speaking, celebrities who endorse a product are not specialists or experts on the product they are pushing — they simply connect their fame to the product.
Both strategies use famous or well-know people to promote your product, but the differences between them are not insignificant. Pura Vida Bracelets, an artisan jewelry brand founded in 2010, has utilized micro-influencers — people with 10,000 or fewer followers — to grow their business from concept to over 1.5 million followers on Instagram.
“The micro-influencers seem to have more authenticity than someone like a Kim Kardashian or Justin Bieber posting about your brand,” Griffin Thall, CEO of Pura Vida Bracelets, told us. “They are normal people in their communities who have gained traction. These people are good at taking photos, they are good at being creative and innovative on the platforms.”
[Read: 3 Things You Need to Know About Influencer Marketing in 2019]
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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