Industries and markets have been undergoing dynamic and monumental changes even before the COVID-19 pandemic hit. Key business trends revolve around tech and consumer behavior. These included the adoption of analytics, uber targeting, and omnichannel marketing communications and support. Then, the new coronavirus came upon us, acting both as an accelerant and an intensifier for some. To others, it was a big blow.
In fact, 88% of consumers are worried about the overall impact of the pandemic on the economy. A survey found more than six out of 10 businesses in Los Angeles, California may fold if restrictions last until Labor Day. Moreover, big companies such as JCPenny and Virgin Australia have already filed for bankruptcy.
Markets are very volatile, and future business trends are shaped by fast real-time consumer preferences and behavior. In this article, we offer you a roundup of these business trends and their drivers. We’ll also discuss the possible business trends in the next decade. This way, you’ll have a better picture of the goings-on of the current landscape and navigate your company and affairs through this pandemic and beyond.
Business Trends Table of Contents
- The On-Demand Economy Shift
- Implementation of Contactless Payment Options
- The American Locavore
- Ecommerce Dominance and Social Commerce Growth
- Increased Collaboration with Influencers
- Investments in Retail Technology
- Remote Work on the Rise
- More Smart Offices
- Better Focus on Employee Happiness
- Improved Personalized Omnichannel Experiences
- The 5G Network and AI
1. The On-Demand Economy Shift
The on-demand, or app economy as others call it, started way back in 2008. And, this is one of the biggest business trends to intensify in 2020. People want to get products and services almost immediately, more and more. And, as COVID-19 rapidly influenced customer behavior in a matter of weeks, on-demand solutions saw a surge.
Today, about 49% of adult consumers avoid leaving their homes. Also, 50% of them work entirely or partially from home. Social distancing is being observed by around 57% of consumers. Digital solutions are being used to purchase important supplies. In fact, markets registered a 27% increase in sales from non-perishable groceries and 25% for frozen foods and also in household and cleaning supplies. Furthermore, a 12% increase registered in the sale of perishable groceries as well.
Online purchases with home delivery increased. And, so did online purchases for store pick-ups. In fact, a 20% increase in spending was recorded for frozen food delivery while a 7% increase in online spending for pick-ups. There was a 17% increase in online spending for perishable grocery delivery, as well as a 9% increase in online spending on pick-ups.
Consumer behavior has changed dramatically. Today, people spend significantly more time playing games, following the news, and on their hobbies. And, generally, more time has been spent on online shopping and social media. This change in priorities may result in long-lasting effects as 50% of consumers are trying out new products, 48% are acquiring health and fitness habits, and 28% are picking up new hobbies.
The twin crises of public health and the economy may have more lasting effects. And the sharp shift towards an on-demand economy seems to be one of them. New purchasing habits are being picked up. And habits are hard to break.
2. Implementation of Contactless Payment Options
Historians say that the COVID-19 virus will have two types of ending: medical and social. The 1918 Spanish flu, which killed 50 to 100 million people, ended the same way. Its medical ending was when it evolved into a more benign version, the seasonal flu. Its social ending was when people were ready to put behind the trauma it left in its wake. The coronavirus will likely never go away. And, its end, socially speaking, maybe years away.
To address this, regulations are placed on businesses to limit in-person contacts to slow down its spread. One of these is the implementation of contactless payment options. Contactless payments have jumped 40%, according to MasterCard. As consumers fear contamination, the use of options like mobile pay and tap-to-pay has increased.
To put it in perspective, mobile payments in the US were steadily below global adoption rates. It was consistently a little below 10%. This may be because cash and credit cards are embedded legacy systems. Also, rewards cards and similar promotions were ubiquitous in American culture.
This is a stark contrast in China, where 80% of consumers paid through mobile the previous year. The global market for contactless payment terminals was valued at $13.2 billion in 2019. This is expected to climb exponentially.
Within weeks of the pandemic, contactless payments have become the norm. And, many experts feel that this trend will not lose its steam even when the pandemic medically and socially ends.
3. The American Locavore
One market change during the pandemic was the rise of locavores. In 2019, locavore commitment has risen in the US. The top five states with a strong locavore movement are (1) Vermont, (2) California, (3) Hawaii, (4) Washington, and (5) Maine. The value of food sold via farms stands, online, farmers market,s, and community-supported agriculture doubled in the period covering 2012 ($1.3 billion) to 2017 ($2.81 billion). With the novel coronavirus, more Americans turn to local farms for food options.
Online purchase and delivery have likewise seen an increase over the past weeks. Even the big guys, such as Amazon, Walmart, and Instacart, had a boost of at least 65% in sales from grocery delivery services. However, they experienced delays in supply chains and even worker strikes. On the other hand, many local produce and meat producers don’t experience such hurdles. Thus, they became more viable options for many Americans.
However, not all local farms have shifted their business to a direct-to-consumer delivery model. Economists have estimated that regional and local agriculture and food markets stand to lose about $700 million in sales throughout May. But, the present is, and the future will be bright for early adopters of the delivery model.
Many Americans during the lockdown spent moderately more time cooking and have made it a habit to eat in. Again, as habits are hard to break, many believe that this is just one of the new business trends post-COVID that will stay.
Top Locavore States by Total Local Sales Per Capita
Vermont : $166.22
California : $129.88
Hawaii : $107.29
Washington : $90.68
Maine : $83.97
Source: Strolling of the Heifers, 2019Created by CompareCamp.com
4. Ecommerce Dominance and Social Commerce Growth
It is imaginable and apparent that a pandemic like COVID-19 will accelerate ecommerce growth. Ecommerce, in general, has been great. Generally, US retailers have experienced year-over-year revenue growth of 68% as of mid-April. This surpassed a previous peak of 49% in early January.
ShipBob, a fulfillment service for ecommerce orders for direct-to-consumer brands, reported an increase in games and toys shipment of 66.51% monthly. They also recorded that beauty products shipment had a 64.57% month-over-month increase, and fitness products increased by 112.23% month over month.
On the other hand, social commerce has also been accelerated by the pandemic. As Americans have increased their social media use moderately, sites like TikTok, Instagram, Twitter, and Facebook became more potent avenues for social marketing.
It was found that 87% of ecommerce shoppers believe that they can get purchasing insights from social media. And, it seems that the younger the people are, the more likely they are to find inspiration from these platforms.
In one fashion purchase survey, It was found that 55% of Gen Zers fashion purchase was inspired by social media browsing, about 50.6% of Millennials, 38.1% by Gen X, and 27.5% of baby boomers’. Moreover, 40% of merchants already use Facebook to generate sales. And, during the lockdown, consumers formed new relationships with brands, and it is highly likely that these bonds will last even after the pandemic.
So, we expect that ecommerce dominance will continue and that we will witness more social commerce in the post-COVID era.
Percentage of Recent Fashion Purchases Inspired by Social Media
Gen Z: 55.2%
Gen X : 38.1%
Baby Boomers: 27.5%
Source: eMarketer, 2019Created by CompareCamp.com
5. Increased Collaboration with Influencers
As social media use became rampant, these social networks evolved to have a distinct minority that more or less holds sway over brand perception and purchasing decisions. These are the influencers. And, they are not necessarily celebrities; they start as normal social media users who create engaging content with ample brand-related usage. So, they seem to be more relatable than celebrities. They grow their followers to a point where their content creation gets sponsored by the very brands that they use and believe in. And, they also get discovered and sponsored by brands that want to penetrate their communities.
This is a very subtle way of promotion, and data reflect that people like subtle marketing. People hate ads so much that they pay to avoid them. This is true in the digital space, spanning from video content to games. Thus, influencer marketing has become a very viable strategy for different brands out there. And, with almost nothing but social media to stay in contact with the world, the pandemic increased the power of influencers.
The influencer marketing industry (if allowed to be called that) has been booming. Last year, 380 new influencer-focused marketing agencies and platforms were established. There were 300% more micro-influencers (with 1000 to 1 million followers) being used by large firms than in 2016. It grew so big that influencer fraud started to become a problem, with 66% of firms experiencing it in some way or form. Yes, the market size for 2020 is expected to be $9.7 billion. It is that big.
As such, the sector is expected to grow more and more. And, influencer marketing is not only used by commercial brands but also in politics. They are the new celebrities, public intellectuals, and pundits. And, this is one of the biggest future trends 2020 and beyond.
Source: Influencer Marketing Hub
6. Investments in Retail Technology
Tech-enablement is no longer just a buzzword. It has become a necessity. Many processes go into a retail business. These include marketing, CRM, inventory, accounting, and HR, going all the way to logistics management. And, doing this manually and in a non-computer aided manner increases the chances of inaccuracies. Also, with the rise of ecommerce, the very concept of retail is being transformed.
In 2017, it was estimated that physical retail sales reached $900 million while ecommerce only had around $100 million. By 2024, experts predict that both physical sales and ecommerce sales will intersect at $600 million. Then, they believe that ecommerce will surpass physical sales onwards. This is a bold prediction. But, one thing is evident. The numbers show us a trend in consumer purchasing behavior: more ecommerce, less physical sales.
Thus, businesses must find a balanced mix of their brick-and-mortar operations and ecommerce. And this poses logistics and technological difficulties. However, companies seem enthusiastic about digital technology adoption.
Recently, about 72% of retailers claimed to have plans to invest in real-time visibility and automation to optimize their supply chains. Also, 87% will invest in mobile point-of-sale devices in 2021, empowering their workers. These advantages can be amplified using tools such as VoiceSage’s Two Way SMS Messaging, known to improve customer engagement rates and automate customer communication.
However, there is so much more to go. A few years ago, a study found that the average US retail operation has an inventory accuracy of only 63%. Assuming that this is still more or less the case and considering that the total business inventories/sales ratio was at 1.45 in March 2020, this subpar accounting gets in the way of sales. In fact, it was found that 34% of businesses have shipped an order late because they sold a product that was out of stock.
It is high time for digital transformation, and everyone seems to know it.
Source: Zebra Technologies
7. Remote Work on the Rise
It isn’t just the customer-facing aspect of business that is changing. Internal configurations, too, are entering an era of transformation. And, one of the major changes here is remote work setups. This is nothing new as it has been in existence even way before the COVID pandemic started. The lockdown measures just accelerated it into adoption.
It is also really popular with employees. Researchers found that 67% would leave their jobs if work flexibility was reduced or removed. It can also save companies money as about 50% to 60% of onsite office desks and equipment aren’t used. They can save on electricity and depreciation costs, among others.
Experts estimate that remote work adoption in the last five years was at 44%. The growth of remote work over the last 10 years was 91%. And, as companies and employees have tasted the fruits of a remote work set up during the lockdown, they will likely retain it to some degree after the pandemic ends. Momentum is on the side of this trend.
According to Statista, staff augmentation services, one of the alternatives to hiring a dedicated remote workforce, has seen an increase in demand from 5.2% to 6.3%. These stats show businesses are leaning more toward a dynamic work culture than a traditional workforce.
With the rise of remote work we are also seeing a more globalized workforce. Some employees are finding themselves working with colleagues and customers from different countries who do not speak the same native language. This can, at times, lead to communication problems. Fortunately, machine translation software can help ease this burden at a low cost.
However, there are also perils when it comes to remote work. Many managers are not trained to manage daily operations this way. Also, others have productivity concerns. Moreover, some jobs require on-site appearances like in service work. So, remote work is likely going to be more ubiquitous, but we are not getting rid entirely of on-site jobs.
Employees and Remote Work Options
Source: Staples Work Place Survey Results, 2019Created by CompareCamp.com
8. More Smart Offices
The global smart office market is poised to reach $49.7 billion by 2024. Valued at $21.2 billion in 2017, it will grow a little over 12.98% in a six-year period, experts say. This is maybe one of the strongest business trends for the next 10 years. And, it is mainly driven by technologies, such as the internet of things (IoT) and artificial intelligence (AI).
IoT allows physical devices to be connected and be “aware” of each other. This way, they can be used in an integrated way and even with if-then triggers. AI and machine learning, on the other hand, can help these devices “learn” user preferences and even optimize certain processes by themselves.
Smart office technology ranges from smart lighting to smart vents and AV conferencing systems to smart HVAC control systems. Some firms tend to go the smart building route, integrating building, business, and security functions. Other firms only go “smart” on smaller scales, such as smart meeting rooms.
Maybe, the biggest driver of this trend is the fact that manufacturers are phasing out legacy systems and creating new smart systems with connectivity. So, companies and even end-consumers won’t really have much of a choice but to adopt smart connective systems. Thus, smart offices are the future. They are nearly inevitable.
9. Better Focus on Employee Happiness
There is one fundamental truth about employee-employer relationships—both sides want to get more for less. However, we have come so far since the struggle for an eight-hour day or a 40-hour week. Capitalism, as we know it, isn’t as bad as it was before. Many companies’ management teams are not just giving their employees their due rights and privileges. They go above and beyond by finding ways to improve employee happiness.
Researchers found that employees are happiest when they feel they are contributing to meaningful work. Thus, this requires them to have a clear sense of mission and vision of the company. Of course, other factors like competitive pay and generous benefits play a part. Moreover, remote work also adds to employee happiness. So, job flexibility and life-work balance should not be taken for granted. More importantly, employees need to feel that they are making progress every day. Hence, clear milestones, goals, and objectives must be set.
And, many companies now focus on how to balance employee growth opportunities, happiness, and productivity. Thus, they attract loyal, hard workers, and reduce employee churn. Moreover, a study showed that happy workers are around 12% more productive.
Among companies in the US, the top five with the happiest employees are (1) Netflix, (2) Bloomberg, (3) ServiceNow, (4) Google, and (5) Tesla. Others that cracked the top 10 include Lyft, Facebook, and Pinterest. Also, the top five companies with the best employee growth opportunities are (1) Bloomberg, (2) JUUL, (3) Cruise Automation, (4) Facebook, and (5) Spotify. And, a focus on employee happiness has been a part of their successes.
Hence, many more companies want to follow this track. Thus, the job market will be more competitive, not just for employees but also for businesses in the future.
10. Improved Personalized Omnichannel Experiences
Today, more and more brands build better relationships with their consumers through personalization and omnichannel presence and support. They lessen instances of traditional sales interactions and increase personal interactions. Businesses are now becoming less formal and more personal.
The main buzzwords in this movement are (1) personalization and (2) omnichannel. Customers want to be addressed as a unique person with unique needs. They also want to be able to receive services no matter what channel they choose.
Researchers found that 72% of consumers expect companies to have their purchase history, regardless of which channel they use. They want a unique personalized relationship rather than a traditional anonymous sales transaction. Failure to do this may lead to higher customer churn. Remember, 79% of customers will stop doing business with brands after just one bad experience. But omnichannel shoppers are seen to be loyal.
Consumers also use different channels to shop, ranging from mobile to brick-and-mortar appearance. They are becoming more and more omnichannel shoppers. And, in one study, omnichannel shoppers logged in 23% more shopping trips and are more likely to recommend brands to family and friends than single-channel shoppers. So, catering to them consistently is a gift that keeps on giving.
Thus, with these customer demands, a movement to provide real-time personalized experiences across all available channels is becoming a very strong business trend. Compound this with the development of 5G and AI, expect improved personalized omnichannel brand experiences in the future. And, maybe, some creepy ones.
The Need for Personalized Omnichannel Experiences
(customer preferences for retail experiences)
Source: Harvard Business ReviewCreated by CompareCamp.com
11. The 5G Network and AI
Businesses are now preparing for the 5G network rollout, and AI is a big part of the plan. The 5G network is seen to be a bigger and better version of our 4G LTE. Operating in three instead of one spectrum band, the newer network offers higher bandwidth and lower latency. Thus, it opens more possibilities for new AI deployments across industries. And, this combination opens new avenues when it comes to the IoT.
Many believe that computational power and improved machine learning is part of this future. It’s because AI will not only be available on the cloud but will become more distributed in IoT devices. AI sensors will be put into everything from security systems, battery life, cameras, smart offices, and gaming devices. Thus, industries will have more chances of gathering data and generating insights through this neural network processing.
Many also believe in the potential for the artificial intelligence of things (AIoT) where devices are smart enough to recognize, categorize, and recommend solutions to situations they sense. This can reduce instances of false-positives and false-negatives, among many.
AIoT possibilities range from creating “digital humans” for remote counseling to faster communication alerts, to public services like firefighting to address life-threatening situations.
Of course, the possibilities of this trend are endless. They don’t only offer broad beneficial capabilities but also grave concerns. This is especially true in data privacy and security. However, there is no escaping the move to better, faster, and smarter technology. This business trend just entails more moral and pragmatic issues to ponder and act on.
Experts predict that 5G networks will have a global penetration of 40% in 2024, handling 25% of all mobile data. In the US, an investment of around $130 to $150 billion is needed to provide the connectivity required.
5G Rollout and Adoption: 2024 Forecast
Source: EricssonCreated by CompareCamp.com
The Future of Business
The future of business revolves around the shedding and adoption of technology that fits requirements for survival and growth. Legacy systems and thinking are to be shed. Newer technologies and concepts will be welcomed. And, this does not only pertain to the operational needs but also involves human capital.
On the customer-facing side of things, businesses are likely to adopt highly-personalized approaches to building better relationships with their customers. And, this will be enabled by technology with omnichannel capabilities. On the employee-facing side, businesses tend to focus on empowerment, giving employees more flexibility and focus on their happiness. It seems that we are moving to a person-centric phase of capitalism, where the “I” is at the forefront.
This seems to be the biggest factor in our current value system that drives businesses and industries to focus on unique experiences, less formal interactions, and customization. One can boldly predict that more and more specialized products and services will arise, addressing individual needs. And, with this, generic mass-produced products will lose favor among the masses. This is certainly one possibility and may be happening to some degree as we speak.
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