With 2020—the year of COVID 19— behind us, it’s time to focus on the positives. Business owners are looking forward to 2021 with hope and optimism: they plan to make it a year of recovery and improvement.
But… what will the business trends be in 2021?
How can company owners capitalize on these trends?
Which strategies will work this year?
What steps would help business owners boost revenues and increase profits in the changing environment?
In this post, we’ll examine 10 key business trends. Six of them relate to the changes that small business owners need to adapt to. The other four pertain to a shift in consumer trends in 2021.
Understanding these shifts in the business environment and consumer preferences is crucial. It will help you strategize and lay the groundwork for a more profitable future.
|Table of contents|
|1. Will COVID Continue to be a Factor in 2021?|
|2. 2021: Business trends|
|3. 2021: Consumer trends|
|4. Key learnings|
|5. Are you ready for a profitable 2021?|
Will COVID Continue to be a Factor in 2021?
José Antonio Montenegro, economist and CNN contributor, revealed that the pandemic will continue to affect the recovery of the world economy for at least the first half of the year.
Although there are already different vaccines, the distribution has not been as efficient as expected, so the inoculation of the population will take longer than planned.
Fortunately, according to McKinsey, unless new, more infectious strains hinder the process, herd immunity is expected to be achieved by the second half of the year.
What is herd immunity?
It is when a population is protected from a virus or infection because they developed immunity, either naturally or thanks to a vaccine.
In addition to the vaccine, in the US, the change of president can help the pandemic begin to be managed more efficiently and intelligently, which will allow for a quicker recovery of the economy. And the new proposed fiscal stimuli can help us see a recovery during the second half of 2021.
And when the economy does start to grow, it could be at a record speed. The International Monetary Fund predicts that the global economy could bounce to a growth of 5.2% during 2021 and PWC Global forecast a 5% growth.
Despite this record speed and the fact that 2021 will be a big change from the ailing economy of 2021, the effects will not be immediate, but gradual. It is expected that the global economy will begin to return to its pre-COVID levels until late 2021 or early 2022.
2021: Business trends
Here are the business trends that are most likely to play out this year.
1. Smart Tech
Technology is becoming a decisive factor in all industries. Every year, new innovations are created to make jobs easier, improve profits and make the market more competitive.
That is why it is crucial that entrepreneurs learn to adapt to these new technologies to stay current and relevant in their market.
- Smart cities will be a trend that will affect the construction industry. This type of technology seeks to improve the quality of life, the economy and the ecology. The construction industry will see a change in the complexity of the projects since they will have to implement this tech. Therefore, business owners in the sector will have to keep up to date through education.
- The rise of autonomous vehicles could start to affect the trucking industry. This does not mean that driverless trucks will begin to appear in the streets, but rather that vehicles with AI and automatic navigation systems will facilitate the driver’s work.
2. Import and circulation of raw materials and products
Despite the fact that the coronavirus pandemic began in China, its economy has not slowed down, but has strengthened. Despite this, the Asian country could focus on the domestic demand for its products instead of imports. This could make it difficult for construction companies to source raw materials at low prices, for example.
But, on the other hand, the reactivation of the US economy could cause the internal circulation of products to increase as the purchasing power of the population recovers. This could mean an increase in profits for several sectors that saw losses last year.
This, too, could mean a greater boost for the trucking industry, which is in charge of distributing products and raw materials throughout the country.
3. Flexibility will be a key success driver
It’s essential for business owners to keep an open mind and be ready to make the pivot to a new product or service if that’s what’s required.
Many businesses did that during the pandemic and managed to turn adversity into opportunity. For example:
- Kenny Flowers, an upscale tropical clothing brand, switched over to making non-medical lifestyle masks.
- Art Classes for Kids, an education center providing in-person fine art lessons to children, started offering YouTube classes.
- Buzzballz, a distillery and winery, began manufacturing hand sanitizers.
A June 2020 survey by the Society for Human Resource Management found that:
- 43% of small businesses have started rethinking their business plans since COVID-19 began
- 32% started providing existing services in a new way
- 22% have asked employees to reskill
2021 may be the year in which you need to make a pivot.
4. A shift towards alternative payment options
This is one of the business trends likely to extend even beyond 2021.
People are reluctant to handle cash. A research conducted at the Australian Centre for Disease Preparedness found that the novel coronavirus could survive on currency notes for 28 days. So, there’s a certain degree of risk involved with cash usage.
Dan Schulman, the CEO of PayPal, says that digital payments have gone from “being a nice-to-have capability to a must-have essential service.”
If your business regularly accepts cash, consider offering customers other options, too. PayPal is one choice. For some business owners, Venmo could also be a good idea. Of course, you should also offer your clients the option to pay by credit card, and try to have a contactless terminal.
5. Start selling online
Last year, several types of businesses survived the downturn and even flourished. E-commerce was one industry that saw remarkable growth.
People prefers to order everything from electronics to household goods from the comfort of their homes.
Online food delivery also saw rapid expansion as people stayed away from restaurants.
Will these business trends continue?
It’s hard to tell, but you should prepare your business to take advantage of these changes. If you own a company that sells any type of product, creating a store on Shopify or selling on Amazon may be a good idea.
6. Consider setting up a subscription-based service
The subscription economy is expanding several times faster than overall retail sales. According to data published by the Subscription Trade Association, the subscription industry grew at a compound annual growth rate of 17.33% in the 2014-19 period.
It’s one of the best business trends to capitalize on. The advantages include:
- Lowering marketing costs (once a customer signs on, you’re assured of repeat business)
- Billing and collections are simplified
- Higher profits
It’s simple to set up recurring payments in your small business.
If you plan to take advantage of any of these business trends, it could involve a capital outlay.
At Camino Financial, we’ll be happy to provide the funds you need. Our motto, “No business left behind,” is our guiding principle.
Camino Financial’s loan specialists will do their best to ensure that you get the funds you need at the least possible interest rate. We encourage you to request a quote for a business loan. It takes only a few minutes to complete our online form, and you’ll get an instant response from us.
2021: Consumer trends
Here are four consumer trends that will predominate in 2021.
1. Health and hygiene
Over the last year, people have started paying much more attention to their well-being. Health and hygiene are top of mind now.
Celine Pannuti of financial services giant J.P. Morgan says, “Clearly, hygiene and health are two factors that customers will continue to be focused on. All household cleaners and hand sanitizers, soaps, cleaning gels are at the top of consumer’s shopping lists.”
Think about how you could align your company’s operations to this new reality. If your business involves selling retail or have a restaurant, you’ll need to keep the premises spotlessly clean.
Taking care of your store or restaurant isn’t enough.
You also need to ensure that your restroom is cleaned and disinfected regularly. According to Spectrio, a customer engagement marketing company, 45% of people would avoid a retail location if they encountered a dirty bathroom. Even worse, 50% would discuss it with their friends and family.
2. Low-touch activities will predominate
Digital shopping received a big boost in 2020. This year, the trend will continue and probably even pick up momentum
New data from IBM’s U.S. Retail Index shows that the shift away from physical stores has accelerated by approximately five years because of the coronavirus pandemic.
Additionally, a recent McKinsey & Company paper reveals that there has been a sharp rise in low-touch activities since COVID-19 started.
What can you do to benefit from this trend?
Remember that 60% of customers do research online before making a purchase. So, a well-designed website is an essential requirement.
You needn’t worry too much about the expense this involves because it’s possible to build your business website with less than $1,000.
3. Demand for virtual services
The SBA says businesses that provide virtual services will continue to see high demand. These include:
- Food delivery
- Home improvement
Consider getting into one of these lines or activities related to them to take advantage of this business trend. Or you can just simply adapt your business so that you can offer virtual services.
4. A preference for socially conscious businesses
This trend started many years ago but has picked up recently. Given a choice, a consumer would prefer to deal with a company that has a strong social conscience.
How can you make your business socially responsible? Here are some tips:
- Set goals for yourself. Reducing your carbon footprint or making donations to a local charity could be a good idea.
- Measure the impact that your initiatives have had. Remember to highlight your achievements and share them with your customers.
- Involve your employees in the company’s activities. Socially conscious businesses have higher employee morale and productivity.
Your efforts will likely help you build stronger relationships with your customers.
Here’s a quick summary of the business trends that we’ve described and how you can capitalize on them.
|Trend||Key learning: how you can capitalize on the trend|
|New Tech||Business owners will have to keep up-to-date with the latest technology to improve their businesses and stay competitive.|
|Import and circulation||It’s crucial to pay attention to other countries (for imports) and to the purchasing power of clients.|
|Flexibility||Explore new lines of business. Be prepared to make changes to the way you work.|
|Alternative payment options||Provide your customers with several ways to pay. People are reluctant to use cash.|
|Online sales||Reach out to your customers over the internet.|
|Subscription-based services||Establish a system for accepting recurring payments from your customers.|
|Health and hygiene||Think of ways to promote cleanliness in your store.|
|Low-touch||Provide contactless service.|
|Virtual services||Provide online services.|
|Socially conscious businesses||Choose a cause in which you can make an impact.|
Are you ready for a profitable 2021?
It’s important to remember that in the post-COVID world, things will not revert to what they were in 2019. Many of the changes that have taken place last year will continue to play out in 2021 and beyond.
A business that makes the necessary adjustments to accommodate these changes will have a much greater chance of success than one that continues with “business as usual”.
And we’re here to help.
At Camino Financial, we specialize in providing small business loans that are tailored to your specific requirements. We invite you to request a quote for a business loan —you’ll get an instant response, and there’s zero impact to your credit.
Remember that our motto, “No business left behind,” guarantees that we’ll do our best to get you the funding you need to help your company succeed in 2021.