2020 has been one of the most challenging years for people and businesses in recent memory. While we'd just love to look back, there's no question that the impact of the pandemic will stretch well into this New Year 2021 and beyond COVID-19.
Now there are a number of developments that companies and entrepreneurs can include in the preparation and further approach of this year. And it all starts by looking at what trends are expected in 2021 according to business, marketing and other experts.
These are the top six business trends expected to have the greatest impact on small businesses and how your business can leverage them.
eCommerce developments are an absolute priority
Sales in online shopping and e-commerce are gradually growing every year. But, according to updated data from IBM's US Retail Index, the pandemic has accelerated the transition from physical retail by nearly five years. Another report from eMarketer estimates that e-commerce retail sales are up around 27.6% in 2020 and that growth will continue well into 2021, reaching an expected rise of 14.3% as a result of the massive acceleration caused in 2020.
Continuing lockdowns have also expanded the number of product categories consumers are willing to buy online now, while perceptions of needs have been adjusted. For example, clothing gradually declined in 2020, while groceries, alcohol, and home improvement products grew at 12%, 16%, and 14%, respectively.
Larger companies, such as Target in the United States, were the first to adapt effectively to provide omnichannel fulfillment to their customers. They used brick-and-mortar storefronts as distribution centers, contactless takeaway options, and more sophisticated online shopping experiences. It was a simultaneous advance in both online capabilities and updating the in-person shopping experience.
A recent small business case study found that only 22% of the small businesses made the switch to online selling. It is important to note that the 100% of those who did, would like to continue to do so in the long term. And it is expected that the number of companies exploring online fulfillment options will increase dramatically in 2021.
Adapt to remote working and more online collaboration
Remote work and non-traditional working hours are gradually increasing, thanks in part to the growth of the “gig” economy on a project basis, supersaturation in geographic areas around large technology companies and the need to find top talent. In 2020, the transition to remote working has accelerated, mainly due to health and safety concerns and cost-cutting initiatives. And for those who have adapted to work remotely, it looks like it will absolutely stay.
According to survey results, some 53% of small to medium businesses plan to offer long-term remote working capabilities. And a similar investigation through Intermedia noted that SMB's 57% plans to keep employees working remotely beyond the COVID-19 pandemic, fueled by benefits such as employee availability, increased job and life satisfaction and reduced overhead costs. It is even said that the head offices as we have known them so far, will largely disappear.
Better data for good management decisions
Recent research on small businesses found that 40% of those with business plans regularly updated them to monitor the viability of major revenue streams. 61% of those who did this analysis indicated that they were confident in their health company.
So while decision-making was fraught with uncertainty in 2020, those who used their financial data to make quick, informed decisions found themselves more successful through the crisis. But it doesn't stop there, as more and more companies try to use combinations of both internal and big data to make smarter decisions.
Adjustments to the business model, permanent after COVID-19
According to recently research 75% of the companies has adapted their products or services to small businesses. 31% defined them as major changes and 27% of those who did, also explored new streams of income with these adjustments. And these changes have not yet been completed: 33% of the respondents indicate that they plan to add additional revenue streams in 2021, if only to absorb losses in other areas.
According to a recent study from McKinsey & Company, most of these adjustments are digital in nature and completely dependent on the industry in which you operate. Automotive and assembly, for example, showed little increase in the acceptance of digital products. However, industries such as healthcare, financial services and professional services reported an increase of almost twice that of mainstream consumer products.
People also asked during the study about expectations for long-term change. They found that the biggest changes, including switching to remote working, rapidly changing consumer needs and the desire for remote products and services, are expected to continue after the recovery. Companies that have already made these adjustments are doing so with a view to long-term transitions, which may also make these changes more permanent.
Investments in further automation
As of August 2020 estimated IDC (the International Data Corporation) that the AI market for artificial intelligence would grow by 12.3% by the end of the year. This increase was fueled by the drive for digital services and data insights, as well as the need to cut costs. On a larger scale, this includes elements such as deep learning, big data and user experience, but it also means a greater investment in HR, payroll and customer service tools.
While the IDC expects growth in 2021 to be less than initially expected due to the slowdown during and beyond COVID-19, it will still show a double-digit growth trajectory.
Increasing need for online engagement
It should come as no surprise that internet and mobile usage increased in 2020. According to a joint study led by Next Web, the number of people using the internet has increased by 7.3%, mobile use by 1.3% and social media users by 13%. The number of users of social media has now reached more than half of the total world population, which will continue to increase even after COVID-19.
Based on analysis by the social media tool Hootsuite, it is estimated that users will spend a total of 3.7 trillion hours on social media by 2021. And the State of Mobile Report now shows that mobile usage has surpassed traditional TV, making it the first screen for most people. However, at least two thirds of mobile users say they also use a laptop or desktop to get online.
The use of multiple platforms also extends to social media. Thanks to analysis of the data from the Global Web Index, at least 98% of the users uses two social media platforms. This means you can expect audiences to overlap, such as 85% from 16-64 year olds of TikTok users who also have Facebook or 95% from Instagram users in the same age bracket who also use YouTube.
Prepare your business for the new normal
There may have been a time when we could have expected that after COVID-19 things would turn out exactly as they did before the pandemic. As it has expanded and both consumers and businesses have adapted, that becomes almost 100% unlikely. We may eventually see a shift back to personal interactions and service, but that will likely be a luxury attached to digital offerings.
Sources including IBM (link), IndustryWeek (link), Live plan (link), McKinsey (link), NewsWire (link), TheAmericanReporter (link)
