Life for small business owners has changed dramatically over the last year. While you may have started 2020 with a specific goal in mind, the pandemic has forced merchants of all sizes to be nimble, flexible and adaptable.
The ever-changing news cycle can make it difficult to plan ahead. Some trends are hot one minute and gone the next. Smart small business owners stay the course and focus on the business at hand. But sometimes micro-trends turn into macro-trends. When that happens, it’s time to take notice and figure out how your business is going to respond.
Here’s what you need to know about eight trends that will impact businesses in 2021 and beyond.
[Read more: 2020 Trends May Inspire New Business Ideas]
New ways to work
Remote work became a necessity during 2020, and for many, working from home is preferable to returning to the office. In the long run, employees are often more productive, more engaged and happier when a remote work option is available.
A permanent shift to remote work means that businesses need to invest in better IT and communication software to make this transition work. As one panelist told us during the Big Week for Small Business summit, many companies responded to the rapidly changing dynamic with a band-aid. But moving forward, a more thoughtful investment in collaboration tools and security solutions is needed.
Remote work isn’t the only thing here to stay. The trend toward gig work—freelancing and independent contracting—rather than full-time employment, has its roots in the financial crisis of 2008. While fluid definitions and reporting gaps make it difficult to know the exact number of gig workers, Gallup estimated them in early 2019 to be 36% of all U.S. workers.
Gigs allow workers to decide when and where their work is done. For many, gig work has become a holdover until the economy recovers and businesses are able to hire again. Apps like Rover, HelloTech and TaskRabbit are connecting dog walkers, tech geeks and furniture movers, respectively, with people willing to pay to get these things done. With convenience like that, the gig economy is not going away any time soon. In fact, according to CNBC, by 2027, gig workers will outnumber traditional employees.
Attracting Gen Zers — as customers and employees
Generation Z is the term that defines those born between 1995 and 2015. These individuals make up one of the largest consumer groups despite the fact that some Gen Zers are younger than age 10. According to research by Hubspot, Gen Z already controls $200 billion in direct spending and influences more than $600 billion in spending by their parents. Members of this demographic are expected to account for 40% of all consumer purchases by the end of this year.
For small business owners, Gen Z presents a powerful customer group that requires a slightly different marketing approach to millennials. They’re true digital natives — the first generation to have grown up completely immersed in the internet. For this group, smartphones, touch screens and apps have been the norm since birth. As a result, Gen Z members have strong tech skills, the ability to multitask and the desire for personalized, one-to-one consumer/brand experiences.
Likewise, Gen Z will likely make up a big portion of your workforce in the near future. These digital natives expect their work to mean something. One in four Gen Zers volunteer in their spare time. Small business owners can tap into that desire for impact by communicating your “why”: Why did you start this business? What drove you to become an expert in your field? Show your passion for serving customers and participating in your community when recruiting Gen Z employees. Provide the opportunity for these individuals to connect with customers and take initiative to work on something that has a deeper impact.
Embracing mobile, in more ways than one
You’ve been hearing the importance of having a mobile-optimized website for a while. Now, small businesses must examine other ways to make their business operations mobile-friendly. Three emerging mobile trends for small businesses include:
- Mobile payments: Mobile payments are a trend impacting in-store transactions as well as e-commerce. Customers want to make a touchless payment using their phone through a solution like Apple Pay, Google Wallet and Civic.
- Mobile marketing: According to one report, “Thirty-two percent of shoppers changed their minds about purchasing items after checking out the product information on their mobiles within brick-and-mortar stores.” Mobile marketing allows brands to capture the attention of shoppers at key decision points, something that small businesses can capitalize on.
- Mobile customer support: Fifty-seven percent of customers would rather reach out to companies online than over the phone. Social media has emerged as one of the fastest ways for customers to get attention in instances of a customer support issue — and much of that contact happens through an app. Make sure you’re monitoring your social media channels and direct messages for customers sending their concerns via mobile.
- Mobile employee communication: Mobile will also become a key part of your employee communication strategy as millennials take on managerial roles and Gen Z enters the workforce. “Emails, intranet, phone calls or meetings where 73% of attendees aren’t paying attention are all outdated methods to spread your message effectively to your employees. In order to boost employee communication, more businesses are shifting to using communication apps — doing so strengthens productivity, lifts engagement, reduces misunderstandings, and so much more,” writes one expert.
Adding multiple revenue streams and diversifying your product/service mix can help your business in times of turmoil and times of normalcy.
Resilient business models
Distilleries are now selling hand sanitizer. Formula 1 teams were producing ventilators. Hotels have offered “work-from-home” day-rate rooms. Businesses this year have had to get creative and pivot to survive. The end result is that many merchants are taking a serious look at their business models and seeking ways to build resiliency and flexibility into their operations.
For some, this means opening diverse new revenue streams. Cafes, for instance, started to sell bake-at-home kits with ingredients and recipes to keep customers entertained during quarantine periods. One events company started offering floral arrangements for delivery to help keep their team employed and generate revenue while conferences and other events shifted online.
Other merchants retooled their business models to continue to serve customers in new ways. Restaurants shifted to curbside pickup or delivery to meet social-distancing restrictions. Fitness studios moved classes to subscription-based online videos. Commercial airlines shifted to offer cargo flights when the number of commercial passengers dropped dramatically earlier this year.
While many of these solutions may seem like short-term responses to an emergency situation, the message is clear: Adding multiple revenue streams and diversifying your product/service mix can help your business in times of turmoil and times of normalcy. Resilient businesses are successful businesses, no matter what the future holds.
[Read more: 5 Pandemic-Friendly Business Strategies]
Flexible payments
There are tons of ways for customers to pay for their purchases nowadays: mobile wallets, contactless credit cards, digital currencies, through QR code and even using peer-to-peer transfer platforms. Aligned with the rise of mobile-first commerce, flexible payments will be more in-demand than ever. The National Retail Federation found in its State of Retail Payments study that touchless payments, i.e., contactless credit and debit cards or mobile pay, for retailers has increased 69% since January 2020. “Among retailers that have implemented contactless payments, 94% expect the increase to continue over the next 18 months,” reports the Small Business Administration.
Mobile payments are already beloved by those who use them: Customers who use mobile payment love it and cite it as their ideal payment method above credit cards, according to a Square report. Convenience, security, speed and utility are the best aspects of mobile payment for consumers; and retailers who capitalize on these qualities to complete transactions provide the best experience for their customers. Flexible, contactless payment allows retailers to build loyalty, increase user engagement, and, inevitably, continue to grow.
Addressing burnout
Stress is part of the human condition. While it’s not always bad, it can potentially lead to emotional, mental and physical exhaustion. That’s referred to as “burnout” and in 2019, the World Health Organization recognized it as a growing problem — and one worthy of attention.
The pandemic has only made the risk of burnout higher than ever. As a result, employers are seeking ways to deal with burnout in the workplace. Meditation, yoga and mid-week time off are among the diverse strategies being employed to combat this 21st century problem. Companies like Ginger are introducing apps offering real-time, on-demand behavior coaching.
For those who want to closely monitor their personal stress, smart devices which provide data on heart rates and sleep patterns are proliferating. Burnout isn’t good, and unfortunately it will continue to impact lives both inside and outside the workplace.
[Read more: The 6 Tech Trends Business Owners Need to Know About]
Socially responsible shopping
Between ongoing social justice movements, a high focus on climate change among younger consumers, and the ethical considerations that come with buying during a pandemic, purchase decisions across the board now factor in increased care and consideration for others. Socially responsible shopping means that more consumers are concerned about the integrity, eco-consciousness, and diversity and inclusion of the businesses at which they frequent.
“Consumers, especially younger ones, are demanding companies step up to the plate and tackle in some shape or form social and environmental issues such as climate change, species extinction, and more,” wrote Wix. “Businesses are taking action in a number of ways, such as improving work culture, donating to causes, supporting them on social media and becoming more sustainable within their own operations.”
Brandwatch reports that online mentions of purchases made for ethical reasons were up 132% in March of this year, while mentions of shopping locally increased by 440%.
Direct-to-consumer (D2C) sales
Before the internet changed everything, manufacturers needed middlemen. If a product wasn’t on a retail shelf, consumers didn’t know it existed. While lots of merchandise is still sold that way, it’s no longer the only way. Enter: direct-to-consumer.
As it turns out, if you have a quality offering, an excellent return policy and first-class customer service, you can sell just about anything without a middleman.
For D2C companies, the advantages include control of the customer experience from start to finish and access to customer data. Consumers get quality products at competitive prices backed by responsive customer service. It adds up to a win-win, which is why D2C has a bright future.
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