In a highly ambitious business landscape where competition can come in the form of the local business next door, or the multinational on the other side of the world, preparing for the future can be a matter of survival for an entrepreneur.
This year saw a range of changes and transitions that impacted nearly every small business on the planet, and 2020 is expected to be even more tumultuous. Here are seven major trends that are likely to shake up business as usual for entrepreneurs in the coming year.
1. Customer service gets even more personal
Personalization was a key trend of the last decade, and the move towards even more personal experiences is going to continue accelerating as we enter the ‘20s, largely a result of artificial intelligence. As machine learning algorithms and AI technologies get better at predicting consumer behaviour, they are expected to continue offering more personalized recommendations to consumers. According to a report by Gartner, smart personalization engines will recognize consumer intent and enable businesses to increase profits by up to 15% in the coming year.
2. E-commerce continues to dominate
Online stores and digital services are no longer a “nice to have” for small business owners; in most industries, they’re a competitive necessity. This year, worldwide e-commerce sales amounted to 3.53 trillion US dollars, according to Statisa. It’s also predicted that e-retail revenues will reach 6.54 trillion US dollars by the year 2022. Any small business owner that is yet to market their products to online consumers is at risk of being left behind as e-commerce moves even further from an extra feature to a base level necessity.
3. Gig and freelance work become the norm
“Work” is gradually decoupling from the concept of a single employer, and moving in the direction of self-employment; in the coming year, a larger percentage of workers will take their first step into entrepreneurship than in any previous year. According to Gallup, 36% of American workers are already in the gig economy in some capacity, and 35% have freelanced in the last year, according to Upwork’s Freelancing in America report. As more digital marketplaces provide individuals opportunities to sell their skills, and as more providers offer freelance-specific services and tools, self-employment is only expected to become more common and easier to achieve.
4. Enter Gen Z
The millennial generation entering the workforce and the consumer market in 2010 was a hot topic, and you can expect that conversation to shift to Generation Z – those born between 1996 and 2010 – in the coming months. While the youngest members of Gen Z are only in elementary school, the older cohort is reaching their early 20s, making career decisions and defining consumer market trends. Though close in age, the two generations have some dramatically different perspective, preferences and priorities. For example, Gen Z members are less keen to pay a premium for strong customer service, have higher expectations for tech innovation, are less trusting of brands and are far more pragmatic than the idealistic millennials, according to research conducted by Salesforce. Shifts in consumer behaviors such as these will continually affect business communication strategies, and priorities, over the next decade.
5. Don’t count out the possibility of a major recession
While many are still feeling some of the impact from the financial crisis of 2008, economists are suggesting we’re actually overdue for our next major market correction. Though the odds keep changing, experts have suggested that the likelihood of a recession in 2020 in the United States is somewhere between 20% and 30%. A dip in the economy is less than likely to happen, but there is still a distinct possibility of 2020 being a groundhog year And just like last time, the effects aren’t likely to remain within the United States either.
6. AI assistants emerge as the next major mobile platform
In recent years, consumer behaviours and habits have forced small business owners to create an online presence. With the flexibility of new mobile devices also came the desire, and the ability, to explore the internet from anywhere; social media eventually became a source for news and for community, pushing small business owners to adopt these platforms as well. In 2020, another platform is likely to emerge: voice commanded AI like Siri, Alexa and Google. Nearly a third of web browsing will be voice-activated in the coming year, and small businesses will once again be expected to offer a seamless customer experience across yet another technology platform.
7. 5G comes online
After years of anticipation, 2020 is expected to be the year that 5G wireless networks come online with the potential to forever change how businesses operate. The jump to 5G represents a significant leap forward in digital capabilities, especially when compared to the incremental improvements we’ve seen in the last decade. Small businesses will be challenged to keep up with the range of previously inaccessible products and services that result from faster mobile internet speeds, such as virtual reality and immersive retail experiences, an explosion in connected devices, and a whole new galaxy of potential threats and privacy concerns.
What does this mean for your business?
While it may seem like things are moving pretty quickly, many of these trends have been in motion for some time. Major industry disruptions, like a recession or the launch of 5G networks, have been gradually building in the background over several years, and it will be very interesting to see just how the small business community will be impacted in the coming year. 2020 will most likely be a continuation, and perhaps an acceleration, of some of the trends we talked about, which means there’s a lot of opportunity for you to experiment and grow your business.
The information and tips shared on this blog are meant to be used as learning and personal development tools as you launch, run and grow your business. While a good place to start, these articles should not take the place of personalized advice from professionals. As our lawyers would say: “All content on Wave’s blog is intended for informational purposes only. It should not be considered legal or financial advice.” Additionally, Wave is the legal copyright holder of all materials on the blog, and others cannot re-use or publish it without our written consent.