E-commerce, remote work, and alternative payments are some of the business trends that will dominate in 2021.
On the heels of 2020, one of the most harrowing years in history, small businesses welcome the new year with hopes for better operating conditions and a return to some form of normalcy and predictability with the rollout of COVID-19 vaccines.
To help small firms prepare for what lies ahead, economists and business analysts have come up with a list of trends that enterprises must be aware of to aid them in planning and decision making.
The U.S. Small Business Administration (SBA) forecasts that businesses will continue to prioritize e-commerce. While e-commerce was already growing before the pandemic, a report by IBM shows that the shift away from physical stores to digital shopping has sped up by roughly five years.
“To prepare for this shift in consumer spending, fine-tune your small business’s e-commerce presence in 2021. Create a seamless e-commerce experience for your customers by making your site mobile-friendly,” SBA advises.
The proliferation of alternative payment options in 2021 and beyond is also expected. Heading into the new year, small firms should explore touchless payment, including online payments with curbside pickup, said SBA.
Remote work will likewise continue to persist. During the pandemic, many small and medium enterprises (SMEs) shifted to part-time or full-time remote work schedules in response to restrictions. Surveys show small to medium-sized business owners plan to continue to offer remote work options in the long term.
This also means there will be a need to increase investment in additional technology and software solutions going forward to ensure employees can telework.
SBA also predicts that virtual service offerings will continue to be in high demand. It noted that the pandemic has led to increased demand for certain business types, particularly those related to technology and virtual health and fitness. These include cybersecurity, at-home fitness, food delivery, gaming, home improvement, and telemedicine businesses.
Technology will become mainstream. According to D&V Philippines, an accounting and financial service provider based in the Philippines, technological solutions will further revolutionize operations. It said digital platforms will be helpful for both corporations and SMEs, especially as most workforces are now working from home.
“Aside from the automation of our manual processes, leveraging the cutting-edge technology available in the market provides you a new way of looking at processed information,” it said.
“The cloud, Internet of things, Artificial Intelligence (AI), big data and analytics, when harnessed properly, can pave the way for useful insights you can utilize in making sound business decisions.”
Reinventing business models is also going to be a major trend. D&V urged businesses to check their organizational models to ensure these adapt to the changes brought by the “new normal.”
“If your former business model didn’t work during the pandemic phase, consider revamping it into a foolproof system that will be optimal even [in] the face of inopportune times,” it said.
Consumer convenience will remain a gold standard. The pre-pandemic days saw SMEs introducing convenience as an incentive, but after the pandemic, the concept of convenience has shifted from an “added value” to a “necessity.”
“Incorporating convenience in your regular operations greatly sets you apart from the competition as consumers now eye this as an indispensable asset in delivering service anytime, anywhere,” said D&V.
Meanwhile, Goh Puay Guan, an analytics professor in Singapore, predicts that there will be more consolidations this year as struggling smaller companies become targets for acquisition.
SMEs seeking to survive could work together to gain economies of scale, said Goh. “The use of shared spaces and cloud-based apps are already ways in which shared services are helping companies make their cost structure more flexible. This also creates opportunities for companies which use subscription-based business models.”
He also foresees the imbalance between supply and demand to continue. The pandemic has overturned the usual business planning assumptions as seen from the continued uncertainty and impermanence.
Goh observed how 2020 saw freight rates shoot up and how the rebound in shipments in the second half of 2020 has led to capacity shortages and long waiting times.
The need for vaccines to be distributed globally as fast as possible also adds a temporary surge on sourcing, manufacturing, and logistics.
“We should expect to see supply chain bullwhip effects in fluctuating prices and supply, as companies continue to balance between reduction of costs, and addition of resources to capture sales,” he said.