What are the emerging business trends for 2021?
2020 was the year that everything changed. Covid-19 upended almost every facet of our personal lives, businesses were thrown into one of the most volatile economic climates on record, and for those companies who were lucky enough to survive, quick and innovative responses had to be taken to keep their wheels turning.
While it's clear that 2020 has taught us that we can't predict the future, it's also revealed how important it is for small to medium-sized enterprises (SMEs) to plan ahead and to prepare for the impossible. So, as 2021 ticks on, we believe now is an optimal time for business owners to look forward and try to understand what else this year might have in store for their business.
From remote and hybrid styles of working, to increased tech use and social media marketing, the pandemic has accelerated many trends that existed long before the first COVID-19 outbreak occurred. But with the unpredictable nature of the virus, it's also likely that 2021 will bring with it some unexpected market changes.
In this article, we're going to take a look at these business trends, before helping you understand how your business can take advantage of them. So, without further ado - let's have a look at our top nine business predictions for 2021.
One of the most significant changes that took place last year was the widespread shift from working in physical office spaces to working remotely, from home. To be specific, since April 2020, 46.6% of the UK workforce has carried out at least some work from home (WFH). Due to the persistence of the Covid-19, it doesn't look like we're going to be returning to offices full time anytime soon.
Even after the virus eventually subsides, remote working is likely to continue in one form or another. By giving workers greater flexibility and control over their schedules, and in turn, lowering company costs and, in many cases, not to mention improving productivity levels, the WFH model has been proving very popular with employers and employees alike. So, due to the perks that remote working offers, it seems that this will continue to be a massive trend as we head further into 2021.
Additionally, as companies are increasingly harnessing technology that enables them to run a range of services online, physical workspaces are becoming less of a core component to the way that many businesses' carry out their operations. However, offices aren't likely to become obsolete anytime soon. According to a survey of tech professionals by the anonymous professional network Blind, 80% of respondents believe the future of work is likely to be hybrid.
What is hybrid work, you ask? Before the pandemic, many of us had never come across this expression before. Defined simply as a mixture of office-based work and working from home, hybrid work helps employers to straddle the bridge between the present and the future. It enables companies to comply with Covid-19 guidelines by encouraging large sections of the workforce to WFH. It also benefits employees because it facilitates group collaboration while giving them the autonomy to choose to work where they believe they are the most productive.
Due to the unpredictable nature of Covid-19, and a widespread shift in employee attitudes, it looks like remote or hybrid forms of work will last throughout 2021 and beyond. So, while figuring out what will work best for your enterprise, it may be worth considering giving long-term hybrid working models a go.
As I'm sure most of you will agree, the only constant throughout 2020 was unpredictability. From new strains of Covid-19 emerging, to government restrictions changing with the wind, if UK businesses have learnt anything, it's the importance of being innovative and responding to change well. Businesses who were flexible to change were the ones who prospered most throughout the coronavirus. With the heavy emphasis that's been placed on business' resilience and adaptability of late, it's very likely to continue being a valuable asset into 2021 and beyond.
This sentiment is echoed by Pamala Phillips, co-founder of the accountancy firm de Jong Phillips, who stated that flexible businesses run by open-minded owners were likely better suited to adapt than those who relied more on no-longer-applicable practices of the past. This isn’t to say that all flexible businesses could change successfully, but many of those who did had exciting and innovative ideas behind them, placing them in a strong position for the future.
While there are many ways to prepare for the unexpected in 2021, one useful way to improve your company's ability to adapt is to form a business continuity plan (BCP). A BCP is a document that outlines how a business will continue operating during an unplaced disruption in service. It's a useful way to help you power through obstacles that you weren't expecting. With Google searches for 'business continuity plan' increasing by a whopping 600% throughout 2020, this trend will likely continue to rise throughout 2021. So, with this coming year likely to bring businesses a whole new set of challenges, continuity planning is a positive way to give business owners back their sense of control.
The coronavirus pandemic has acutely changed the way we shop. With national restrictions heavily limiting our in-person shopping experience, many consumers have started to conduct their practices wholly online. According to a study by Forrester, throughout the first lockdown, 58% of consumers chose to spend online, which was up 12% compared to pre-pandemic levels. Searches for e-commerce tools like Stripe, Shopify, and WooCommerce also skyrocketed throughout this time. According to a Xero report, more than a quarter of businesses said that online marketing was their primary strategy for getting through the economic downturn.
But is this trend here to stay? Well, according to recent data, 2021 e-commerce sales are already on a 6.3% decrease from 2020 levels. As shops eventually do begin reopening throughout the year, it's estimated that brick-and-mortar sales will steadily increase once more, and the stark imbalance that the pandemic has caused will start evening out.
Of course, digital shopping isn't going away anytime soon. Habits that UK consumers have formed over lockdown still look set to endure long after the crisis is over, even among senior members of the population. As Gemma Spence, CEO of OMG Trascact, the e-commerce art of Omnicom Media Group points out: 'there's often resistance, certainly in the over 65s, to adopt new technology and to make changes in behavioural or consumption patterns, (however) during the past three months of lockdown there has been enough time".
The notion that e-commerce rates will still remain high, even after physical shops open up again, is also supported by a September 2020 report from ChannelAdvisor. Data from the study reveals that in May, when the UK was in its first national lockdown, 42% of digital buyers said they would continue to shop digitally in the future. This number then jumped to 55% when consumers were asked again in August, months after nonessential shops in the UK began reopening. The results of this study suggest that a lot of consumers will still shop digitally after the crisis is over, so if you haven't already adapted your business to tap into this growing online market, it's becoming increasingly vital that you do so soon.
Aside from creating a surge of interest in e-commerce, the coronavirus has also exponentially increased the amount of energy and time we spend on social media. With Ofcom's annual Online Nation report revealing that during the first lockdown adults were spending an extra hour of their days online, that 12.9 million of us were watching TikTok videos, and that 38% of us using Snapchat, it's no surprise that these apps and sites have been a growing target for digital marketers, too.
Far from social media marketing only blowing up because of the pandemic, with traditional brick-and-mortar marketing being scaled back by many businesses, it looks like social media marketing is a trend that will continue to grow into the future. The insurance firm Finaria backs this up by estimating that, in the US, social media ad spend will increase by 15% in 2021 year-on-year, which nearly doubles the $54.4 billion (£39.1 billion) that was spent on social media advertising in 2017.
Among the more traditional forms of social media marketing, there has also been a recent growth in influencer marketing, and it's expected this trend will continue to rise throughout 2021 and beyond. Similar to celebrity endorsements, influencer marketing requires individuals with large social media platforms to bring awareness to specific brands or products. Since so many high profile industry leaders in the fields of sport, wellness, and fashion have large social media followings, influencer marketing is an incredibly effective way to tap into potential consumers.
Influencers don't even need to have a massive reach for the approach to prove successful. Working with micro-influencers, who are individuals with anywhere from 1,000-100,000 followers, can also significantly improve your brand's visibility. Since these types of influencers typically have very active channels and higher levels of engagement compared to users with larger followings, the influencer's message is more likely to resonate with their followers.
Since social media marketing is a trend that is only set to increase in the next few years, it makes sense to try and harness these new marketing methods before your competitors get there first. So, if you're considering engaging in a social media marketing strategy to expand the reach of your business, here's a list of social media monitoring tools to help get your company with its first steps.
Due to the highly infectious nature of the COVID-19 virus, most delivery services in the UK have gone contactless since March of last year. From leaving parcels or take-aways on our doorstep, to even in some cases sending robots out to fulfil the deliveries, no-contact deliveries have become the standard practice of many major companies such as UberEats, Deliveroo, and Amazon. However, as we look to the post-Covid future, many are wondering if this style of delivery will remain. So, let's see what the professionals have to say.
According to Carlos Castelan, Managing Director of The Navio Group, due to the high levels of convenience it offers, contactless delivery is set to continue long after restrictions are lifted. This view is echoed by Vipin Chahal, Founder of the Return Policy Guide, who believes that contactless delivery will prove a useful method for small and local businesses who are looking to turn their operations digital. According to Chahal, since contactless delivery encourages you to pay through digital payment modes, it eliminates the misuse of money, and lowers the cost of converting physical cash into digital currencies.
So, what kind of forms will the future of contactless delivery take? Due to growing consumer expectations and evolving technology, it's likely that 2021 will see a marked increase in the use of automatic delivery services like drones and autonomous vehicles. While it's true that automatic delivery services aren't anything new, with autonomous vehicles being used to fulfil grocery orders through Chinese apps like Meituan, and by UK supermarkets like Co-op, the fact that independent delivery startups like Nuro have recently raised $500 million (£360 million) to accelerate their technology suggests that this trend will only become more prevalent in 2021.
Due to more and more of our time being spent online, data volumes have grown exponentially in recent years. So, it's unsurprising that as consumer data continues to rise, an increasing amount of businesses are harnessing this data by using technology like artificial intelligence (AI) and data analytics. By using these two technologies together to analyse data, companies are able to target their marketing campaigns more effectively, and figure out better ways to execute their internal processes. Utilising data also appears to improve a company's bottom line, with a BARC research report revealing that businesses who used big data saw a profit increase of 8%, as well as a cost reduction of 10%.
So, since the collection and analysis of consumer data is clearly beneficial to businesses, it doesn't look like this trend is going anywhere anytime soon. However, in order for your SME to glean the most valuable results from consumer data in 2021, it's essential that you have the tools available first. While cloud solutions allow companies to access data from anywhere, in order to protect the data from hackers or dangerous malware, it's crucial that businesses do everything they can to keep it safe. What's more, once the privacy of the data is ensured, companies require systems that can effectively store, organise, and process the information in order for useful insights to be generated.
However, leveraging consumer data doesn't have to cost a bomb. Depending on what your business is looking to accomplish, data analytic programmes can actually be affordable and reasonably simple to navigate. Businesses can obtain data from social media platforms like Twitter and Instagram, or even by collecting information from RFID chip readings and GPS results. If you're interested in using data to upgrade your company's consumer insights, and want to learn more about the process, visit this Trustpilot page for further information.
2020 witnessed a surge of support for small and local businesses. With the events of the coronavirus severely threatening the survival of SMEs across the country and abroad, large sections of the public opted to direct their money from multinational corporations to smaller enterprises in their area. Although there were a variety of incentives to do so, according to this Mastercard study, 49% of consumers made this switch to help their communities bounce back, compared to 27% of individuals who are shopping locally to reestablish or form new relationships with shopkeepers.
This growth in shopping locally has also been expressed by Janne Karppinen, head of retail at Mastercard, who comments that "the way we shop has changed" and that "small businesses are the backbone of the economy... many are rediscovering the huge number of great, varied, and unique shops in their local communities and neighbourhoods".
Far from just being a lockdown fad, shopping locally is not likely to be a trend that will peter out in 2021. As the 2030 Britain study by ThoughtWorks has revealed, just 32% of under-25-year-olds believe the future of food will take place in traditional supermarkets, compared to 58% in 2018. Additionally, according to research by the KPMG/Ipsos Retail Think Tank, independent and convenience retailers are well-positioned to take advantage of town regional centres throughout the working week, as lockdown restrictions do eventually start to lift again.
In addition to a surge in support for local retailers, there's also likely to be hope for other small businesses throughout 2021. According to Google's Year in Search, over the course of 2020, worldwide searches for 'support small business' doubled in comparison to 2019. Indeed, the same search term increased 350% on Pinterest between February and March of the same year. So, with the pandemic appearing to only accelerate pre-existing trends, 2021 is looking to be a much more positive year for small and independent businesses.
Shopping locally isn't the only ethically conscious trend that is likely to persist throughout 2021. Long before Covid-19 disrupted our global society, the public was growing increasingly conscious about their environmental footprint, and the pandemic is only appearing to speed up this long-standing trend. According to a survey conducted by Accenture as of April 2020, 60% of consumers reported their own concentrated effort when it comes to making more environmentally friendly, ethical, or sustainable purchases since the beginning of the lockdown. Indeed, out of these consumers, 90% said they were likely to continue doing so in the future. These findings are also corroborated by The Co-op's Ethical Consumerism report, which revealed that the ethical food market is now worth £12.5 billion in the UK, which is an exponential increase from the £1 billion it was worth in 1999. So, with conscious forms of consumption clearly gaining traction in 2021, you might be wondering how your businesses might tap into this expanding market?
While there's no one-size-fits-all approach to incorporating ethical practices into your SME, it's wise for companies to focus on providing their customers with sustainable products and services. Also, by working with ethical banks, volunteering with (and donating to) charities, using power from green energy sources, and creating products that don't negatively impact the environment, steps can be taken to improve your brand's reputation.
Once positive changes have been made, visual logos are an excellent way to get your message out to your consumer base. For instance, Cruelty-Free International's leaping bunny informs consumers your product wasn't tested on animals, the Fairtrade Foundation's logo certifies that products are sourced and traded sustainably. The Soil Association represents products that carry the organic label. By receiving confirmation in the form of these logos, it indicates your company's moral values, which in turn helps to attract customers whose principles align with your brand.
Since the global business landscape is expected to be disrupted by Covid-19 for the foreseeable future, tapping into emerging trends is a useful way to help your SME stay ahead of the curve. From keeping an eye out for new public demands, to streamlining your businesses practices with emerging technology, there's no shortage of ways to give your enterprise a competitive edge throughout 2021. However, while some emerging business trends are relatively cost-effective, some may require more capital initially to get the ball rolling for the future. So, if your SME is looking for a cash injection to help implement some positive changes, MarketFinance might be able to help.
MarketFinance helps companies take charge of their cash flows by offering business loans through the government's Coronavirus Business Interruption Loan Scheme (CBILS). Because we're an accredited government-backed lender, we're able to offer extremely low rates of VAT. Also, to help make the process as fuss-free as possible, our helpful customer service team is on hand to help at all times.
So, if you're intrigued to find out more about our CBILS funding, as well as how it may help your business throughout 2021, visit our page here.