Updated on 01/10/2020
If you were to google search for articles predicting the main trends for businesses in 2020, you would probably find that most of them didn’t quite hit the mark. After all, who could have predicted how this year has played out so far?
In fact, the trends brought about by coronavirus this year are much more complex than anyone could have imagined and have affected people’s perceptions and habits in a potentially more semi-permanent way. Rather than this year’s main trend being ‘how AI revolutionised the SME landscape’ or ‘how eco-initiatives transformed businesses’, we have instead seen the whole world stop for a moment to figure out how to continue their business-as-usual activity, all while being socially distanced.
Moving forwards, analysing these trends could help to inform our 2021 strategy and position us for success, so here are our five top picks for what we believe the most impactful business trends of 2021 may be.
Most businesses, if they are set up to be able to operate effectively away from the office, have spent the year working from home as much as possible in the hopes of reducing the spread of the virus. This has changed the way businesses operate fundamentally, with more technology being brought on board to facilitate remote meetings and day-to-day operations.
Some argue that this digital shift businesses have experienced was always going to happen, and that coronavirus has simply caused the rate at which this change is happening to increase. This is why our first prediction for the 2020 trends that will continue to be relevant in 2021, is that the increased use of technology in business operations will continue to be commonplace.
We can expect more Zoom calls, Teams meetings, Skype conferences and emails over face-to-face communication into 2021. Even if offices are to reopen to some extent, the likelihood is that many businesses might have found themselves adjusting quite well to the new technology or balancing a mixture of ‘in office’ and ‘at home’ staff throughout the working week and therefore may not be looking to let go of it any time soon.
Commuting hasn’t been as straightforward as it used to be in the pre-coronavirus era, with most people either commuting less, or not at all. Geographically speaking, this means that people are spending more time in their local area - which can have a huge impact on small businesses.
How so? Well, local businesses have a fantastic opportunity to connect with new audiences and acquire more customers by offering the products and services people need. Not only are these businesses likely to profit from higher footfall in towns and cities, but they could also look to pivot their offerings to help fill gaps in people’s lifestyles that have opened up as a direct result of lockdown. There’s real-world evidence of this, too, with corner shops and independent grocery stores seeing a 63% rise in trade during lockdown.
For example, perhaps your average person enjoys a morning coffee on the way to work, which they would typically pick up from a high street coffee shop near their workplace. With working from home options becoming more widely available, workers may now choose to fulfil that desire for ‘good’ coffee in a different way; visiting a local coffee shop by their house with the extra time that they’ve gained by not commuting. Alternatively, convenience stores could start making and selling quality coffee to capitalise on this increased local demand.
It’s not just about coffee, though. The government have promised an extra £2bn of investment into cycling and walking in the UK, so with people choosing to spending more time in their local area, the likelihood is that businesses in 2021 could do well by capitalising on a whole range of local opportunities and engaging local audiences.
When we talk about ‘cash’ here, we’re referring to the pieces of fancy paper people used to exchange for goods and services back in 2020. That’s what some businesses may be saying in coming years, as research by YouGov has revealed that Brits are making less cash payments in the coronavirus era.
This trend is indicative of a decline in cash transactions which may require that brick and mortar stores (who have not already done so) implement contactless payment options and upgrade their commerce technology. If the reality is that consumers are now viewing cash as ‘unclean’, it could take a while to undo that perception.
Is this a temporary coronavirus trend, though? We suspect not. Similarly to how working from home technologies have required some adjusting to but have quickly become accepted and appreciated, there’s a good chance that as customers become more comfortable with making contactless payments, they’ll also become less inclined to use cash.
For small business owners, you could consider upgrading your technology to support newer payment methods, whether that’s through embracing Google Pay or contactless card functionality for customer transactions or through adopting newer banking apps, such as Mettle, to keep track of your business’ finances with a free app – although there are many other providers out there to choose from and an eligibility criteria applies – this is covered at the end of this article.
Financial uncertainty amongst consumers throughout the UK is perhaps one of the more obvious trends on the list. 2020 saw the UK take the sharpest plunge into recession in its history, with GDP dropping by 20.5% in Q2.
During a recession, the economy shrinks slightly which can leave consumers with slightly less cash in their pockets as the cost of goods and services increases. Consequently, consumers may be less willing to spend on non-essentials, which poses a challenge to a wide range of businesses; how do we inspire customers to buy from us?
In 2021, the UK could either still be in, or recovering from a recession, so this should be accounted for in a business plan. What actions, then, can business owners take to adapt to the financial circumstances? Primarily, think more about your customers and their needs.
Consumer buying decisions stem from the underlying attitudes they hold, such as how they feel about your products and how safe they feel in your store. The more you can do to identify what these underlying attitudes are and how they’re changing based on recent trends, the better positioned you may be to connect with and reassure your customers. This could empower you to run more impactful and cost-effective marketing activity to edge out over your competition, which could ultimately result in you making more sales and moving your business forward in 2021.
According to James Maslen, Esme’s Channel Manager, “successful business owners reacted to the coronavirus crisis by taking stock of their ‘new normal’, speaking to their key contacts, and planning how to reshape and relaunch their business.”
The ‘key contacts’ element of that equation is all about investing time into the relationships a business has with its key customers, suppliers and stakeholders. After all, 2021 holds the potential for local lockdowns to occur and for further sudden/unexpected changes, so the businesses that are likely to perform the best are those who can communicate effectively to navigate these challenges.
Specifically, having the ability to make strong contingency plans and develop short-term actions reactively in times of crisis may predict success. This is particularly relevant in an SME landscape “which is always shifting – and great business owners will be those who can adapt their plans accordingly”, James comments.
When you look at your key business contacts, they probably include suppliers, customers, and perhaps some essential staff, right? Well, what about your accountant and your bank? These individuals tend to work for fairly large organisations and are “very tuned into the market so it can mean that they may have some rather useful market insights and hints and tips, not to mention products and services, that could be of use to you at a time like this” James says.
James also highlights the importance of “keeping lines of communication open with these key partners, while of course maintaining your supplier and customer relationships as your first point of call. Essentially, keeping yourself informed and getting as much information as you can from these people could prove to be vital to your business and its survival.”
“The better informed you are, the better prepared you can be and that is a key to continued success moving forward into 2021.”
For businesses that are able to take these trends into account and capitalise upon them before competitors, 2021 could be full of opportunity. Even 2020 has yielded opportunities, for example many fitness companies jumped on the home exercise trend by selling equipment and supplying content to locked-down gym-goers, while other businesses pivoted to sell essential products such as sanitisers and foodstuffs.
Every time the economy shifts and consumer needs change, for better or for worse, new opportunities will emerge for business owners. Going into 2021, business owners may do well to follow industry changes closely, connect with customers to understand how their attitudes and needs are evolving, and strive to upskill and reskill to give them the chance to survive and even thrive as the pandemic continues.