With new challenges and opportunities arising each year, companies must adapt and pivot correspondingly to stay ahead of the curve. To bridge the knowledge gap for entrepreneurs to strengthen resilience and robustness, Hive Life shares more on the essential small business trends to watch in 2022.
The Covid-19 pandemic caused massive disruptions to the global business ecosystem, bringing the world of trade, finance, health, and many other key sectors to a near halt. It triggered prolonged economic recession and dislocation amongst many businesses, spurring a growing urgency for proactive measures and transformative change.
While most large corporations were well within their profit margins to manoeuvre a recovery, many small and medium-scale businesses suffered profusely. During the Covid-19 pandemic, small retailers on average were twice as likely to close down and remain out-of-operations long-term, compared to larger companies.
Small business owners encountered numerous struggles along the way, from maintaining their consumer base, to growing operational costs and regulatory impositions, to even facing complete shutdown. However harsh the climate has been, it brought a dynamic shift in consumerism, forever changing the way businesses operate and approach new market phenomena.
These hardships provoked significant change in developing small businesses’ essential skills, in order for them to survive the competitive environment, with many showcasing great adaptability, resilience, and resourcefulness in recent years. 74% of small and medium-sized enterprises (SMEs) in the Southeast Asian region expected their business’ financial position to improve, with 84% of these SME owners looking to expand and scale their companies in 2022. Taking a leap forward, small businesses have shown great potential to resolve and recover over time.
For small to medium companies looking to stay ahead of the curve and gain important insights, and read on to capitalise on the rising trends shaping the future of commerce.
1. Prioritise Digital Commerce
Influenced by shifting trends or necessity, many traditional brick-and-mortars have pivoted towards digital marketplaces, adding an additional sales channel and diversifying customer reach. In 2020, around 25% of small businesses in APAC started or increased their online presence and sales initiatives.
Present-day businesses acknowledge that the digital commerce landscape is truly transformational, and plays a vital role in driving consumption trends of the future. Learning from the past, many small businesses are well-aware of the impromptu shutdowns endured during Covid-times, and have since grasped the importance of incorporating diverse revenue streams.
As the process of integrating e-commerce platforms may be complicated for some, tech-enabled companies such as Singapore’s Zaapi provide integrative e-commerce solutions for businesses looking to shift online or add a social media sales presence.
2. Digital Payments
Over the years, the world underwent an accelerated adoption of digital technologies, and to aid the swift transition over to the online space, the integration of e-commerce and digital wallets, as well as other electronic payment methods has surged. While the use of hard cash is limited, especially to local vendors and smaller businesses, upon observing this shift in consumer behaviour, small-scale brand owners are now offering digital payment alternatives, making traditional wallets an almost obsolete fashion accessory.
Mobile-payment wallets are essential to the consumer landscape, offering convenient, speedy, and contactless transactions, while offering users more control and security over their assets. APAC’s adoption of digital wallets demonstrated a much higher penetration rate than other parts of the world, with 44% of in-person transactions being conducted through point-of-sale (POS) being made using mobile phones, in addition to 69% of online-shop payments carried out via a mobile device.
PromptPay is a digital payment solution in Thailand developed in collaboration with Thai banks, to provide customers with diverse payment options using their preferred app from participating financial institutions. Launched as an initiative to modernise Thailand’s digital payment infrastructure system for the small to medium businesses, the FinTech startup is making virtual transactions easily accessible and highly integrative through its QR code scanning interface.
In addition to introducing a digital payment solution, businesses may also consider offering buy now, pay later (BNPL) options. This payment methods’ growing popularity is attributed to the need for flexible and secure payment methods as online sales rise rapidly, offering customers seamless and interest-free shopping experiences.
3. Personalised Customer Experience
The unprecedented market transformation brought by the Covid-19 pandemic has set an examplotory lesson for all businesses, making it essential for companies to pivot and better equip themselves to stay informed, relevant, and improve the customer experience.
Having a definite target customer group is important for businesses to study and understand their audience better, in order to market their products and services accordingly. More businesses now are investing their time and capital in conducting thorough market research, while others prefer a more subtle approach to engaging with their consumers online as a means to appeal directly to them.
Consumers are becoming more selective, expecting personalised solutions rather than simply mimicking the purchasing habits of the popular crowd, which is why developing a strategy that appeals to niche markets is more important than ever. Fully-engaged customers are 23% more likely to spend on a brand’s offerings, and develop a better long-term relationship with your business.
In order for businesses to step in the right direction, they need to start gathering important customer data, and making valuable changes to their consumer interfaces. Offering personalised customer experiences allows brands to strengthen and reinforce their current audience engagement while attracting new high-value consumers.
4. Data Transparency
In the digital age, consumers have become increasingly conscious of their data privacy and security, and are more inclined to shop at businesses that implement transparent policies and handling of customer information. Offering data transparency goes beyond just fulfilling the legal requirements and abiding by consumer privacy regulations- it requires businesses to take the initiative to deliver honest and reliable services. With greater transparency and accountability towards their customers, companies are less likely to wrongfully use their data.
5. Build Eco-Friendly and Socially Responsible Business Models
Building socially responsible and self-sustaining companies is the key to offering greater transparency both internally and externally, from your operational methods, to corporate governance, to environmental impact. Modern-day consumers, especially the younger generations, are more aware and critical of how a company addresses different social and environmental issues. Up to 70% of consumers want to know how a business supports and tackles social and environmental concerns, while 46% base their purchasing decisions on these key areas.
For small businesses, having closer proximity to their customers puts them under the spotlight to perform in accordance with their social and environmental deliverables. Businesses are taking active measures to support those causes, impacting change and transforming their traditional ways. Many are working to introduce transparency within their organisations and towards their customers, integrating ethical and sustainable approaches to their workplaces, alongside advocating for social causes and charities outside of their company.
Purpose-driven businesses perform relatively well, in regards to being more ambitious and innovative, while appealing to larger consumer bases, attracting the best talent, and simply taking greater initiative to impact change.
While there is no certain future for small businesses, the market is in recovery. The best way to move forward is to fill any knowledge gaps, and grasp a better understanding of emerging marketing trends to preserve and scale your business.