11 Small Business Trends for 2023
Small Business Planning For 2023
This article will discuss small business trends and outlooks in America during and post-pandemic. The obvious hurdle will be the recession, however, this can be an opportunity for some business.
11 Current Small Business Trends & Forecasts for 2022/2023 To Watch Out For
Before the pandemic, people’s outlook towards starting a small business seems to be on a high. Even Millennials and Generation Zers are trying to get into the action. There are many reasons for this and there are many implications as well.
However, COVID-19 has caused an acute effect on public health and its impact on the world economy is also devastating. And for small businesses, the pandemic has been and will likely be one of the worst crises it will ever face.
This article will discuss small business trends and outlooks in America during and post-pandemic. We will also include highlights, examples, and some actionable insights as we go along.
Small Business Trends Table of Contents
- Small Business Must be Faster to Adapt
- Business Outlook: What Happens Now?
- Amazon FBA to the rescue
- The Gigs Economy
- The Continuous Rise of Remote Work
- Leveraging Technologies
- Cash-Free or Just Less Cash?
- Millennial Small Business Owners
- Dealing with Generation Z
- Human-Centered Design and UX
- Get on the Influencer Marketing Train
According to the National Federation of Independent Businesses (NFIB), small businesses in the United States are experiencing one of the most challenging times ever. The NFIB U.S. Small Business Optimism Index plummeted by 9.3 points from 104.3 in January 2020 to 95.0 in January 2021 (NFIB, 2021). Experts attribute this record decline to the adverse impact of the COVID-19 pandemic.
U.S. Small Business Optimism Index, January 2020 to January 2021
Baseline = 100
Source: NFIB Small Business Economic Trends (2021).
In early 2020, the small business owners had to address an abrupt spate of challenges. Some experience a sudden decline in sales, although others were able to sustain and even had an increase in transactions, especially among retailers. A number of businesses, unfortunately, had to close shop because of the significant restrictions in people’s movement.
But despite a dismal year, small business owners are remaining positive that 2021 will be a better year. Along with the continuing impact of COVID-19, these are the important trends that may affect the way you run your small business.
1. Small Business Must be Faster to Adapt
Millions of small business owners across America have been practically left to fend for themselves as most of the US economy was put on a standstill. For months, these entrepreneurs and their staff must operate amid virus surges, lockdowns, and the risk of contamination.
Nonetheless, these businesses are quickly adjusting to what the new normal of doing business demands. These include increased deliveries, provision of alcohol and hand sanitizers to both patrons and employees, strict mask-wearing rules in establishments, and outdoor dining.
Critical to staying afloat in these trying times is having the ability to shift to new operating models, while at the same time ensuring the safety of both their customers and own employees. To remain above water, many business owners adapted spontaneously and were able to identify innovative approaches to modify how they operate.
Flexibility and Adaptability to Any Crisis
Because of the need to minimize in-person transactions, more and more companies are embracing technology, especially SaaS solutions. Others are offering additional options for customers who prefer doing transactions online, while some are turning to new revenue streams. In fact, a study found that 35% of personal services providers have begun offering their services online due to COVID-19 restrictions (Freshworks, 2020).
Here are some notable examples of small business resilience during the pandemic:
- A fitness center that continued catering to its clientele virtually by offering classes through Zoom via subscription.
- A hotel chain that converted its establishments into quarantine facilities to help government hospitals.
- A jewelry store that began live-streaming gem shows and selling jewelry online.
- A telco repair services provider that introduced live chat to better help cut their workload, and keep customers happy.
Moreover, some businesses are not only surviving but are actually thriving during the pandemic. Aside from online retail giants like Amazon, small businesses that have long offered online shopping options have achieved record sales. This is due to the fact that their business model was designed primarily to operate even with minimal in-person transactions.
How companies are innovating to survive the pandemic
Source: SHRM (2020)
2. Business Outlook: What Happens Now?
Prior to the pandemic, only about a third of establishments survive 10 years or longer, while only about half of establishments survive five years or longer (SBA, 2018). During the current health crisis, over 97,966 businesses shut down permanently by August 2020 (Yelp, 2020).
The effect of COVID-19 also differs across industries. One study found that industries such as real-estate, professional services, and finance were able to undergo fewer disruptions since these businesses were able to successfully shift to remote work. However, sectors such as hospitality, food services, personal services, and retail all experienced labor decreases above 50% (Bartik et al., 2020).
Since the onset of the pandemic, small businesses have been facing a spate of problems. Many business owners say that the COVID-19 crisis has caused them to lose revenues (23%), while others complain about budget cuts (11%) and temporary closure (11%) (Guidant Financial, 2020).
Top 5 most common effect of COVID-19 on Small Businesses
Source: Guidant Financial (2020)
Small Business Challenges
With the vaccine rollout taking full-swing in the US this year, the overall business outlook is beginning to become brighter in the months and years ahead. As government restrictions gradually ease and everyone slowly gets accustomed to the new normal, small businesses will be at the forefront of economic recovery.
A recent Capital One survey found that around 67% of small business operators are becoming optimistic that their pre-pandemic finances and overall business health will return soon (Small Biz Trends, 2020). Other findings include:
- A major priority of 69% of small business owners is ensuring the safety of their customers.
- 78% are depending mainly on word-of-mouth marketing due to budgetary constraints.
- 75% have sustained or increase their number of staff since the pandemic started.
- 73% are still very anxious that spikes in coronavirus infection will affect their business operations.
As more small business owners are becoming hopeful about 2021, there is no doubt that optimism must be coupled with proper planning and preparation. Combining those motivators can springboard small businesses into pathways for both short- and long-term success.
Business Outlook Highlights
- Around 98,000 businesses shut down permanently because of the impact of COVID-19.
- Small businesses in some sectors were able to experience lesser disruptions because they were able to effectively shift to remote work.
- As the light at the end of the pandemic tunnel nears, small business optimism should be met with ample preparation.
3. Amazon FBA to the rescue
What is trending that kept freelance and small sellers afloat since the onset of the pandemic? Well, the right answer for you maybe Amazon. Sure, there are other large online marketplaces like Facebook and eBay. There are also large retailers with considerable eCommerce transactions like Walmart and Apple. So how much did Amazon marketplace sellers in the US sell over the last 12 months? They sold a total of 3.4 billion products (Amazon, 2020).
If you want to just sell your wares and continue to do so without running into dealing with storage, packing, shipping, and pesky returns, Amazon FBA—fulfillment by Amazon—may just be your answer.
Today, businesses flock to include Amazon FBA in their business models. Also, some resort to just have FBA as the main avenue of business. Products of small businesses and freelance sellers account for over 50% of all items sold on Amazon (Amazon, 2020). Around 54% of units sold worldwide by marketplace sellers are accounted for by Amazon (Marketplace Pulse, 2020) in Q2 of 2019. Furthermore, this trend is likely to continue as experts predict that more sellers are going to be on Amazon in the next five years. Today, about 54% of brands are already on the eCommerce site. This is expected to balloon to 74% of brands in the stated time period (Feedvisor, 2019).
1st-Party, 3rd-Party, or Hybrid
With or without a pandemic, there are three main ways you can sell at Amazon. Firstly, you can be a 1st-party seller (1p)t. In this setup, you produce the goods and sell wholesale to Amazon. The eCommerce giant makes purchases from you, handles your storage, shipment, fulfillment, and returns. Every product ASIN (Amazon Standard Identification Number) of yours will have a display stating “Ships from and sold by Amazon.com.” There are advantages to this like getting bulk orders from a trusted retail giant. However, there are also disadvantages as your margins will be quite lower as you sell at wholesale prices. Furthermore, Amazon chooses the price points. You don’t have control over it. This is the price you pay for being a highly credible brand associated with Amazon.
Secondly, you can opt to be a 3rd-party seller (3p) and just sell your products on it. You just treat it as another sales channel like any brick-and-mortar shop you have or just another online marketplace. You keep control of your inventory and shipping should you choose. Thus, you can continue shipping from your warehouse or just choose a third-party service. However, you can also tap Amazon FBA and fulfill orders through it. Thus, you can concentrate on production and marketing. This is the advantage of FBA. On the other hand, you have to maintain a good seller score to continue to sell.
Thirdly, you can also choose to be a hybrid seller. You can register some of your products for a 1st-party arrangement while having others for a 3rd-party seller relationship. This is a good mixed strategy and may hedge for losses in each relationship type. However, one must be really on top of everything by exercising due diligence and ownership of all the business processes.
Amazon FBA Highlights
- 3.4 billion products were sold by US-based online Amazon marketplace sellers over the past year.
- 54% of brands are already on Amazon. This is thanks to its status as one of the best search engines, the popularity of its marketplace, and the efficiency of its fulfillment services.
- There will be an influx of many sellers on Amazon in the next five years. Competitors and substitute products are already on there. Thus, you need to consider optimizing your visibility and sales channel on the eCommerce platform.
- You have three strategies to use on Amazon. First, you can be a 1st-party seller and sell wholesale directly to Amazon. Secondly, you can treat it like another sales channel and be a 3rd-party seller. Lastly, you can be a hybrid seller and choose which products to maintain more control over.
4. The Gigs Economy
In 2020, the total number of freelancers stands at approximately 77 million (Matthews, 2021). Two years prior, the total was 57.3 million workers (Gig Economy Data, 2018). Freelancers make up 36% of the overall workers in the country since 2014. They participate in temporary employment relationships somewhat sporadically to either support their income or to get away from the “9-5” life. They get to feel that they are their own boss. Also, they can work with passion projects. Moreover, technology has enabled gig-work to be the new normal for many people.
US Decacorns—companies valued at more than $10 billion—that support gig-work include Uber, WeWork, Airbnb, and Stripe. These companies more or less support temporary freelancing jobs through marketplaces and payment management. Also, there are global Decacorns that do just that too like China’s DiDi. This shows that both global and US economies value gig-work as they value gig-work marketplaces and support services. Thus, this is a signal that there is an opportunity out there for firms that offer gig-work management and support. Can you offer such things? Maybe you have something that you can offer in this brewing market.
Moreover, it is obvious that this trend has a ton of implications. However, we’ll just discuss a few that affect small businesses directly.
The Darwin Award: Phasing Out
The greatest advantage, arguably, for having marketplaces for contractors is that it fosters healthy competition. It is a good old free-market tenet where superior goods and services get selected over inferior ones. If you subscribe to this view like those who do the valuations for Decacorn companies, then it is time to monitor the gig economy. Why? If it continues and grows, there may be things that will get phased out.
Phase-out 9-5 jobs: consider outsourcing
Firstly, you may consider phasing out some employment setups for your small business. Maybe, just maybe, you can do away with a couple of desk spaces and completely outsource jobs to online marketplaces. Well, like many companies, you can save resources and time by outsourcing expertise and equipment. Maybe, there are contractors out there that can do better work for less time and for less pay than your full-time staff.
This is highly applicable for organizations with in-house advertising teams and creatives. Imagine an advertising creative working for the same company for a good five years. That person will only have limited job experience compared to creatives that take on different work. The latter, in good probability, may have more chances of thinking out of the box. Thus, you may want to opt for gig-based creatives than having an in-house team.
Consider substitutes: you may be phasing out
Second, you should consider your very products and services vis-a-vis the substitutes that can be found from gig-work marketplaces. If you do installations or deliveries, you may as well be on online marketplaces for gig-workers. They may have already cut some of your shares and maybe you can earn some back and then some by being on popular platforms. You don’t want to win a Darwin award and get phased out from the evolutionary movement of markets.
Gig workers see a gig as an entry to another gig. If they perform well, they get to perform another time. In theory, they have more to lose when they don’t care enough about the quality of their services and the relationships that they have with clients. On the other hand, many companies take a single sale for granted. Many take single customers for granted from time to time. Gig workers can’t afford to do this. They just can’t if they want to earn enough and get the next gig.
There is a fundamental difference between the two mentalities of having a job and being self-employed. And there may be a fundamental difference between your employed workers and gig workers. The latter, most likely, have greater motivations to be competitive. They even may more likely to get training (AEI, 2019). Therefore, they may offer better services than your average worker and may even put more time. Thus, you better beware.
The Gigs Economy Highlights
- The gig economy in the US has grown to around 77 million in 2020.
- 57.3 million workers in the US have engaged in independent work. Also, freelancers make up about 36% of the entire workforce. The gig economy is bound to grow. Thus, you need to keep up with trends that affect small businesses.
- There are many US and Global Decacorns, companies valued at $10 billion or more, that support gig-work through marketplaces and support services. This means that economies value gig-work. There may be opportunities here for you to exploit.
- Gig workers treat every gig as a stepping stone to the next. This is their fundamental mentality that greatly differs from a person with a 9-5 job. Thus, be wary that they may provide better services than your 9-5 workers.
5. The Continuous Rise of Remote Work
Prior to COVID-19, remote work, like the gig economy, has been on the rise for years primarily due to the many benefits it brings, both to employees and employers. Driven by the vast potentials of technology, many experts saw the potential of remote work to be the new workplace normal. That possibility became a reality because of the pandemic.
Of course, compelling office-based employees to abruptly work at home due to the pandemic also has its challenges. One study found that despite 20% of US employees were able to work remotely (and continue to do so) at the onset of the pandemic, 17% were not able to work remotely but still continued going to their workplace. Likewise, 15% of American workers were not able to work remotely but opted to not go to work, while 4% were able to work remotely yet opted not to work from home (YouGov & CBS, 2020).
Work situation of American adults during the coronavirus pandemic, April 2020
Sources: YouGov & ViacomCBS (2020)
As we move towards a more digital economy post-covid, we can expect these numbers to grow even further. How does this affect small businesses? Here are a few points to ponder.
Save Time, Save Resources
Overhead costs can run companies to the ground. There are just things that the costs you can’t very much control. Typical costs include electricity for AC, the wear-and-tear of office equipment, and papers. Yes, they are all part of running an organization. However, you can minimize these costs using different methods. One way is to implement a remote working day scheme for your employees. In this way, you can save on electricity, paper, and reduce the wear-and-tear of your office equipment.
Of course, this is not for everybody. Restaurant owners couldn’t possibly do this for their wait staff or line cooks. However, design companies, digital marketing agencies, and tech companies can. It’s mostly knowledge workers and today, many of us are in the knowledge economy. Thus, if your organization has knowledge workers, you should consider letting them work remotely.
Furthermore, you would also save time. Employees don’t have to commute to work. There is no reason to be late. You don’t even have to get up from your desk and go to another floor to talk to an employee. You can do this digitally, privately, and securely using enterprise social networking software.
Additionally, if your employees’ jobs are on a per-hour basis like consulting or design work, you can use time tracking software to help with billing and productivity.
Leverage Highly-Motivated Employees
If you haven’t done remote work before, imagine this scenario for yourself. First, you get to keep the same job that you have with the same pay and benefits. However, you work in the comfort of your own home, wear whatever clothes you want, and, maybe, even work in bed. Enticing isn’t it? Well, that goes the same thing for your employees.
Many who actually do remote work feel that they are being trusted by their company. This intuitively increases employee motivation. Also, it doesn’t really help to breathe down on knowledge workers’ necks. Sometimes, this can be the case when employees are being required to be present in the office even though they can do their work efficiently anywhere with an internet connection. Remote work can help reduce attrition and improve their physical and mental health as well.
It is worth noting that since 2005, the number of employees who work from home regularly had increased by 173%; this is 11% faster than other types of work arrangements (Global Workplace Analytics, 2020). Another important piece of evidence: remote workers provide 1.4 additional days of work each month on average (AirTasker, 2020). Compared to office-based workers, those who work remotely are actually working 16.8 more days annually for the same wages.
Remote Work Highlights
- 20% of American workers were able to work from home and continue to do so.
- Remote workers offer 16.8 more work-days each year compared to office-based employees at the same compensation.
- 66% of companies are now allowing remote work. Many companies are likely to allow employees to work remotely in the future.
- Remote work can help save you time and resources. This is especially true for companies with knowledge workers who do not always have to be present in the office.
Most Popular Enterprise Social Networking Software
- Slack. A social network and communication platform that brings all messaging activities in a single location. Know more about its robust features like real-time messaging and search features in our Slack review.
- Yammer. An enterprise social networking tool that facilitates improved internal and external communications. Learn more about it in this Yammer review.
- Clarizen. A social networking and project management solution built to facilitate enhanced team collaboration. Check out our Clarizen review for more information.
- Workplace by Facebook. A robust social networking and team collaboration platform designed to harness the capabilities of Facebook. Read this Workplace by Facebook review for more details.
- Zimbra. Allows businesses with geographically dispersed employees to securely share folders and documents as well as collaborate with each other. Want to know more? Check out our Zimbra review.
6. Leveraging Technologies
Before the pandemic, the more small businesses adopt technology-based business models, the better their bottom lines become. During the COVID-19 crisis, small business owners have discovered that going digital did not only helped them to continue their operations amid the restrictions. It also helped them ensure the safety of their employees and customers while enabling them to identify new revenue streams and reinvent how they do business.
Historically, the norm has been small businesses versus large enterprises. Small business owners need all the tools they can get. Furthermore, they are also in competition with each other. Many times, the competition is so cut-throat when they operate in close proximity. They battle for prime position geographically and even in local search engine results. This is why many small businesses are leveraging digital technologies.
This is why in 2018, Deloitte was commissioned by Google to do a report on small business and technology. They found that 38% of small businesses believe that digital tools will allow them to increase their sales and revenue. 31% believe that digital tools can help them promote brand awareness. Furthermore, 30% believe that they can access new customers and connect with customers 24/7. However, 80 percent of US small businesses aren’t leveraging advanced digital tools (Deloitte, 2018) like analytics.
This data point though is likely to get lower as time goes by. Pressures from competitors and other market forces are likely to drive small businesses to up their game when it comes to technology adoption. However, there are still many that feel that digital tools are not relevant to their businesses. Of companies that are least digital engaged, 40% believe that digital tools are not relevant to their operations. Also, 38% think that they are not effective for their business. If you are not part of those numbers, maybe you are in a good position. You have a key competitive advantage over them.
Advantages and Challenges of Using Digital Technologies
Using digital tools doesn’t only improve productivity but it can also save you costs such as papers, ink, and physical travel. You can even automate business processes and manage employees working remotely. Furthermore, there are operation-specific tools such as marketing platforms for small businesses. With tools like these, you can ditch your traditional spreadsheets for reporting. They generate reports automatically and in a highly visual manner.
With them, you can keep everything in one place and access data even on the go. However, there are many challenges for technology adoption for small businesses. One of which is the price point. 41% of small businesses cite expense as the reason for not investing in more digital tools (Business.com, 2018). Also, small businesses often spread their employees thinly in the sense that each person may do different types of work. Many are overworked already. Thus, when new technologies and workflows are being implemented, their work is going to get disrupted. And this is why 19 percent of small businesses feel that the hassle of implementing new tech is just now worth it.
The challenges are somewhat just based on bad perceptions about what digital tools can do. Thus, if you believe that your company can benefit from using new technologies, you should try to change the perceptions of the people in your company. Also, if you need more convincing yourself, you should research more on how digital tools can help your business.
Beyond that, there are free ones that you can try.
Leveraging Technology Highlights
- About 80% of small businesses are not leveraging advanced digital tools and technology like analytics.
- Price points and the hassle of implementation are cited as blunders for adoption. Bad perceptions are to blame for low adoption rate among small businesses.
- Digital tools can increase productivity and efficiency. They help you be more agile. Also, many of them are free so there is nothing stopping you from trying.
7. Cash-Free or Just Less Cash?
Digital natives and hopefuls are quite enthusiastic about going cashless in the future. Sure, this is understandable as digital pay options abound. Also, people find it very convenient to use them and this may be more sanitary. Moreover, businesses can save money by not hiring extra staff like cashiers. Thanks to services like PayPal and apps like Google Pay and Apple Pay, we can process payments easier, more accurately, and securely. This is particularly helpful during a pandemic where the virus is invisible to the naked eye and can easily be contracted. Thus, many think that the end of cash will be in the near future. Countries such as China, Sweden, Denmark, and the United Kingdom are touted to be the first ones to win the cashless race (Financial Times, 2020).
So far, Sweden has been winning the cashless competition. In fact, most Swedish retailers not accepting cash, and only 20% of all financial transactions (Financial Times, 2020). Of course, many countries are also gaining considerable headway. Ultimately, this initiative also induces us to think that cash may go away entirely. However, this is really not the case especially with US cities fighting against cashless business establishments. Many feel that going cashless is discriminatory to people of color and the disenfranchised (NY Post, 2018). Well, without going much into the political and ideological details, this is somewhat true in a weak sense but not necessarily to poor people or people of color. It is discriminatory to customers who have good money but have privacy and security concerns when it comes to digital tools. Thus, cities are thinking of banning cash-free establishments. Philadelphia beat them to the punch (New York Times, 2019).
So, what can we take from this situation? Cash payments will still be around as there is really no point for business driving away sales. However, we can expect that there will be less cash being used in the future. Thus, small businesses should consider being highly flexible when it comes to payment options. Therefore, choosing the right payment gateway platform is the first step in dealing with this trend. Moreover, be sure that your chosen tool is comprehensive and accepts transactions from popular digital payment options.
Cash-Free or Just Fewer Cash Highlights
- Digital payment options are getting more popular every year. Some even think that economies will go entirely cashless in the future.
- However, there is a backlash against cash-free businesses citing discrimination. Some cities like Philadelphia have banned cash-free establishments entirely. Thus, a cash-free society is highly unlikely although people may use less cash.
- Small businesses should be flexible with their payment options for customers. Thus, shopping for the right payment gateway tool is the first step.
8. Millennial Small Business Owners
Elon Musk quoted a friend who stated that “Trying to build a company and have it succeed is like eating glass and staring into the abyss.” It isn’t as easy as many may think. Also, it takes grit and determination to go through birthing pains. However, many have the pain tolerance for launching startups.
Millennials are people born from 1981 to 1996. These are the 23 to 38 year-olds of today. It is really a diverse group where some in their mid-30s are already executives. On the other hand, others are still in their early twenties trying to find themselves and find their places in the world. However, many Millennials or Generation Y, as others call them, have high hopes for starting a business.
The top motivation for Millennials to enter into business is to be their own boss (Guidant Financial, 2019). The second is to pursue their own passion. Others go into it because an opportunity came their way and they’re dissatisfied with corporate America. On the other hand, others found their way into business because they got laid off their jobs or their jobs got outsourced. Also, the top 5 small business industries for Millennials are:
- Business Services
- General Retail
- Home Services
Surprisingly for some, 80% of Millennial small business owners report that their current business is profitable. This is contrary to the opinions of people out there that Millennials don’t have the grit like earlier generations do; that they are somewhat babied. However, frailty and the lack of grit is not just a generational thing. It’s a human thing that cuts across generations. There are simply people who don’t have the tolerance for risk and the chops to succeed in business regardless of what year they are born.
Implications of Millennials Going into Business
Millennials, we can say, are mostly digital natives. They have likely lived their early childhood with ancient gaming consoles and have had their first mobile phones when they were in grade school or high school. They adapt to technology fast and are arguably in the best stage in life for learning and making something of themselves. Thus, going against these younger business owners will be pretty hard as they are natives to this day and age.
Firstly, this generation has changed the way we work virtually in every facet. Take customer service, for example, Millennials demand quick responses from businesses (Entrepreneur, 2017) via different channels, especially social media. Failing to do so would result in a backlash from not only their friends and associates but also from total strangers that have had the same issue with them. They have kept businesses on their toes in this regard. The same thing can be said with the proliferation of different advocacies calling for better business practices.
Secondly, they understand these concerns and as they build their own businesses, they are more likely to incorporate these values. This means many would have “earth-friendly” marketing messages and selling points. Most Millennial small business owners would also understand the benefits of digital marketing as they themselves are willing participants (or victims) of it.
They have changed how businesses are being run and they’d likely run their businesses in ways that mimic their preferences as customers. This means they are likely to be more attuned to the social climate and thus have better intuition than earlier generations.
Millennial Small Business Owners
- Millennials are going into business because they feel that they are ready to be their own boss and they want to pursue their own passions. Contrary to the remarks of others that Millennials are frail and lack the grit to succeed, 80% of Millennial small business owners report that their current business is profitable.
- This generation has changed how we do business from pressuring companies to improve their business practices or just respond quickly to customers on digital channels. They are more attuned to the current social climate as they are the collective movers and shakers of it.
- Millennials are digital natives and they are more likely to use digital tools to market and promote their products and services. Also, they are more likely to use productivity tools.
9. Dealing with Generation Z
In 2020, Generation Z has surpassed the Millennials by around 4 million to become the biggest generation in America (Knoema, 2020). Just like Millennials, Generation Zers are digital natives who demand quick responses and support from businesses. Also, they tend to engage in social advocacies just like Millennials even if it’s just to the extent of posting and creating content. Obviously, even if this doesn’t significantly deliver social change, this obviously changes the perception of peers when it comes to certain issues. Also, this obviously applies to brands. Yes, Generation Zers can totally make or break you. Thus, a good deal of care and respect should be given to their preferences should you want your business to succeed.
This is not just applicable to marketing or external business facets but also with internal business processes. Generation Zers are people between 1995 and 2015. The oldest ones are now about 24. These are people who are already working and are starting their careers. Some may even be employed in your business. Thus, understanding how to work with people from this generation will not only help you sell to customers but also help you in running your day-to-day operations in the future.
Some Things about Generation Zers
One of the first things that you should consider is that Generation Zers prefer to have a personal relationship with brands (Business News Daily, 2019). A good part, if not most of their relationships are constantly mediated by digital channels. They are almost online all the time. Thus, it is really a good time to optimize your digital touchpoints today as a year or two more could be too late. In five to ten years from now, Generation Zers will become your customers and employees. Therefore, going digital will be a big contributor to your success.
Also, many Gen Zers just like Millennials would like to think of themselves as being socially conscious. They want their jobs to have some sort of mission. They are value-driven and many believe that their generation will have a positive impact on the world. It is easy to discredit things outright as wishful thinking but if you look back to the 60s and 70s, the same spirit abounded. And, to deny that advocacy movements back then did not impact small businesses would be a total falsity. It affected industries. They changed how brands market their products and treat employees.
Of course, some Gen Zer preferences like pet-friendly workplaces, being friends with bosses, and those sorts of things are not necessarily the norm nowadays. However, businesses should consider being flexible for such things. Sure, we don’t really know the quirks and developments of what this generation now is becoming. It’s just enough that we follow this trend as they will surely be a part of the business world in the years to come.
What’s more, it is worth noting that unlike other generations, Gen Zers ardently consider that they are the most affected group by the COVID-19 pandemic (GenHQ, 2020). This is mainly because this major health, economic, and societal crisis happened during their formative years.
Generation Z Highlights
- People born between 1995 to 2015 are considered to be Generation Zers–the newest generation to be named.
- Among all generations, Gen Zers tend to “own” the coronavirus pandemic since it happened during their formative years.
- Generation Zers feel that their generation can make the world a better place. Thus, they prefer jobs and businesses with social missions and causes that reflect their preferences.
- They are the true digital natives and they are coming into the workforce. Also, they are fast becoming a large portion of the buying masses. Therefore, businesses must be ready to accommodate their preferences and be attuned to general trends among their generation.
10. Human-Centered Design and UX
With the influx of Millennials and Gen Zers in both the workplace and markets, a good buzz is coming about for human-centered design (HCD) and UX. Put simply, human-centered design (HCD) is putting the user first (Design Kit, n.d.). It is advocating for the users by designing products, services, and experiences that provide value for them. This doesn’t just stop at the user experience (UX) on the digital level. It covers everything from digital touchpoints to brick-and-mortar interactions. This is a strong trend as to where business processes will be converging soon.
Again, for practical purposes, Millennials and Gen Zers expect brands to be helpful and quick with their responses. Furthermore, they expect brands to create positive change for society as a whole. Thus, when you design user experiences across channels these should cater to these preferences. These should be created for all brand offerings and touchpoints. Therefore, investing in HCD and UX will help you preempt larger trends. Moreover, this will also help you with your operations now.
HCD helps businesses improve performance such as reduce the number of user errors, increase ease of use, and increase the ease of learning about products, services, and the brand itself. This bridges the gap between you and customers.
A Quick Look into HCD
Human-centered design (HCD) is a design approach that takes into consideration that users are first. They are who you create value for. Of course, this has to be profitable. HCD can be done through three phases: Hear, Create, and Deliver.
- Hear – this is the process of preparing for researching and hearing what users actually want and how they satisfy certain needs
- Create – this translates what you learned in the field into solutions to test
- Deliver – in this stage, you create prototypes and test solutions in iterations until you create a final product
The HCD methodology employs rapid prototyping and testing as you go. This helps you be attuned to your customers and gather actionable insights as quickly as possible. Thus, you can change your design as you go to fit customer preferences and provide them value. Also, this is just a general look at the HCD approach. There are many resources out there for you to learn more about it (HCD, n.d.). Furthermore, there is an increased demand for this job.
Furthermore, don’t worry if you are not specifically trained to be a UX professional. You can still become quite proficient at it given the right practice and training. UX professionals don’t have a degree in a specific field (NN Group, 2020). Major areas where UX designers have degrees in are English, computer science, communication, psychology, and design. It is an endeavor focused on continuous learning. Thus, anyone can really learn this approach.
Human-Centered Design Highlights
- A trend towards human-centered design (HCD) pressures companies to put users first and design experiences that create value for them.
- The HCD is touted to improve productivity while increasing ease of use, reducing user errors, and increase the rate of learning about the brand and its offerings.
- There are many resources available online to help you adopt this effective approach. You would want to be earlier in adopting HCD than later.
11. Get on the Influencer Marketing Train
Influencer marketing is like celebrity endorsement prevalent in the age of mass media. Instead of just gunning for movie stars or musical artists, marketers place their products on social media channels and other digital touchpoints like podcasts of influential people in their given realm. And because of their relatively low cost and extensive market reach, 25% of small businesses use influencers for their social media marketing (Visual Objects, 2020). And this is why many SMBs are increasing their marketing budgets on Instagram.
A modern example of which are MMA fighters who are active on social media. Health and fitness brands pile up to sponsor outspoken personalities and those with fun content to help them get their products out to their target segment. Another would be marketers tying their product up with musicians to create popular how-to videos.
This approach is quite easy to do as everyone is really easy to reach nowadays. Almost everyone has a Twitter handle or a Facebook account. Furthermore, brands do not really have to go with high-profile celebrities. They can target micro-influencers or personalities who have a strong following (Impact BND, 2019) that’s within the range of a thousand to a million.
What’s great about micro-influencers is that their social media channels are very active. Their followers and peers (who might also be influencers) engage more with their content rather than just view them and leave “likes.” Furthermore, they are not really as expensive to do business with compared to more traditional celebrities. As such, you need to get on this wave sooner rather than later before competitors get to the top micro-influencers of your target segments. For this, you’d do well with a good social media monitoring tool to determine micro-influencers and influencers.
Influencer Marketing Highlights
- Micro-influencers are personalities and handles that have followers within the range of a thousand to a million. These accounts are likely to interact more with peers (who might also be influencers) and fans. Thus, placing your product with them will have more engagement. Also, doing business with micro-influencers is more affordable than with high-profile celebrities.
- Influencers can come in many different forms. They can be just active Twitter handles with a lot of engagement (like personas). Also, they can be athletes, musicians, or podcasters.
- Identifying influencers is easier done with a good social media monitoring platform. In this way, you can scout for and interact with influencers using just one tool.
Key Takeaways Concerning Small Business Trends, Opportunities, and Ideas
Trends come and go from time to time. COVID-19’s worldwide impact will likely shape the new “normal,” and businesses, both small and large, have no other choice but adapt to thrive and survive in these emerging trends. Also, this can be said to the same thing about small business ideas and small business opportunities. Their timeliness is dependent on the wider market forces and movement.
And sometimes when you are a small business owner you don’t really get to see these market forces at play. We tend to just stick to what we ordinarily see in our own localities. However, unlike other market forces, the COVID-19 pandemic is expected to remain to dictate how small businesses should be operated. And this makes employers become very anxious about the health of their business in the new market landscape.
With the new norm shaping further into a more contact-less business environment, business owners need to be more conscious of their digital touchpoints. The pandemic, indeed, has compelled small business owners to finally roll-out their long-delayed plan to take the big leap away from offline to online operations. Current ecommerce trends offer powerful insights to facilitate that significant shift.
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