Each year, businesses encounter various challenges and opportunities. The year 2019 was not an exception.
The global growth of the economy, specifically in manufacturing became sluggish as the high streets of the UK continuously struggled because of the increase in operational costs and online competition. Because of the tough conditions in trading, there have been retailers who ended up getting forced into administration or reducing the portfolios of their stores.
Yet, there may still be a lot of reasons for people to become optimistic. That is because wages have increased to their highest levels in more than a decade, there is an increase in consumer confidence, companies of every size continuously expand and innovate into new markets, and unemployment stays at a record-low.
Many companies had their services diversified, and new products launched. A lot of these businesses are on their way to transforming digitally as they follow investment in IoT (Internet of Things), robotics and AI (artificial intelligence), and applications which are cloud-based.
Aside from these, there is new legislation that they need to comply with which includes the Making Tax Digital of HMRC, preparation of the report in executive pay gap this 2020, and increases to the Living and National Wage.
This upcoming year is a significant chance for people to look ahead into the industry, economic, and societal trends that can affect every sector of the business.
It is not surprising that it is vital to include technology for a company to become successful. SMEs or Small and Medium Enterprises that have their operations managed through the use of inherent business apps and major corporations that use deep analytics to provide information for decision making consider technology as something central to the company’s success. Business strategies may also get shaped by ethics and sustainability for the creation of new opportunities for growth that goes in line with the purchasing behaviour and shifts in the attitudes of the customers.
It may be difficult to make sense of this landscape that rapidly transforms. However, there are a lot of reasons people should become confident. Here are the top trends in business for the year 2020.
Improvement in Economic Trends
Even if the past year became characterised with a growth all over the world that is lower compared to what they expected, the clouds now appear to lift. According to the prediction of the economists, the average growth of +3.2% in the GDP or Gross Domestic Product this 2020 is because of the emerging markets’ growth. However, there have been warnings that imposing more tariffs may make it slow down.
In January, the Bank of England had interest rates held at 0.75% because of their confidence in the UK economy. Despite the interest rate being at a record low, it spells significant news to companies who want to borrow this year including the reality that unemployment is now at a 44-year low.
As per the head of Experian’s Macro Forecasting in the UK, Mohammed Chaudhri, the decision of the Bank of England to have interest rates held at 0.75% shows that they are confident the UK economy is bouncing back. The maintenance of interest rates near the record low is an indicator that the Bank is ready to have the rates cut down whenever the economy needs it.
According to an index, the economy got further bolstered as confidence in the consumer has increased by 3 points by the end of the past year. Once you possess the right service or product, continuously move forward, the renewed optimism would allow the way to get paved for growth that can excite any business.
Despite that, no one should afford to become complacent as the outlook of the economy may still be far from what is certain. Your business may immediately get derailed by adverse changes. Whenever customers do not provide payments or pay late, your cash flow may get seriously damaged and allow you to be in debt. This can be bad for business. Aside from that, the suppliers could have their prices increased so they can cover the rise in the costs. Because of this, we recommended that you check your customers and suppliers’ credit scores. This can help you spot which ones would pay late and who can put you at the risk of getting into defaults.
Since the outlook of the economy may still be far from what is certain, it would be better to avoid being complacent as your business may immediately get derailed by any adverse changes. Whenever customers don’t pay or pay late, your cash flow may seriously get damaged and result in being in bad business debt. Suppliers may eventually have their prices increased so they can cover the rise in the costs. Like always, it would be better to always review the credit scores of your suppliers and customers so you can check who is at risk of getting into defaults and who pays late. You may also check out various tools that can provide help with this so you can decide on who you should work for and the credit limits that you need to set.
According to the Head of UK’s Macro Forecasting Mohammed Chaudhri, “The Bank of England’s decision to hold interest rates at 0.75% points toward a sense of confidence returning to the UK economy. Whilst maintaining interest rates at a near-record low, the Bank made it clear that it stands ready to cut rates should the economy need it.”
Trends in Small Business: The levelling of the SMEs playing field
The UK economy’s backbone is the SMEs as they account for an excess of 99% of the businesses in the private sector. There are many great awards once you become your own boss but many people don’t have enough understanding of the risks involved, long days of working, and investment needed to become successful.
Aside from that, SMEs traditionally undergo many struggles when competing with the big players because they rarely have the same amount of resources that will allow them to invest in staffing, IT infrastructure, marketing campaigns, including the other functions of the business.
In recent years, things began changing since technology continues to have the traditional barriers broken down. Many SMEs are now beginning to combine relatively minimal costs and easy-to-use tools in web development, email marketing, human resources, and accounting so they can save both time and money. This also allows them to present an image that appears professional to the world. This has continued in the year 2020 but some of them will go even a step further through the use of the information that these applications capture to react to changes immediately, make better decisions for the business, and have a potential to take the market share of companies that are several times bigger than their size.
Last, at the end of the past year, the Queen had a speech that provides an added boost for the SMEs. Included here is the support in doubling the Small Business Rate Relief threshold and assistance in dealing with any late payments.
The Trend of Conscious Shopping for Consumers
There has been a significant change in society's attitude in meat consumption, fast-fashion, and plastic waste. This may undoubtedly intensify further in the year 2020. The powerful market of the Millennials among other consumers know how their purchasing decisions impact the environment which is why they turn to brands that have the same values as theirs.
Because of the shift, businesses in need to have the practices and products in every sector reviewed. This includes airlines that are looking for ways to minimize the consumption of fuel, retailers in clothing that want to run recycling schemes for their garments, and supermarkets that are vowing to have plastic packaging removed.
Referring to 2020 as a year of sustainability is not surprising as it aims to go beyond fair trade and environmentalism. Firm in the spotlight is business ethics including those that cannot use data responsibly and uphold the rights of workers can surely get backlashes from the consumers.
Even if this year’s brands consider sustainability as among the key differentiators, it is vital to consider any new initiative’s reputational, financial, and operational impact. Once the business allows sustainability to get built into the values of their brand and notices any consequences that are unintended like increased prices of the products, there is a possibility for them to have their services and products opened up to any new audience.
Trends in Marketing: Starting a Conversation
In the past decade, marketing that data led became a game-changer as it allowed the small firms run online ads that are cost effective and targeted. Teams in marketing that have a bigger budget could have the data analytics’ boundaries pushed in a bid that will help them in understanding their customers better so they can get to the path that would push them to buy.
Once the technology becomes highly accessible, people are expecting the marketing activities of brands could have AI and machine learning in feature. Brands may further experiment with automated creation of content using tools powered by AI so they can generate emails and blogs so much faster than human beings.
In the upcoming year, conversational marketing is a key trend that people need to check out. This partly got driven because of the adoption of smart speakers like Google Home and Alexa and innovations involving voice search. The other is the use of chatbots that can deliver personalized messages in marketing using a medium that people frequently interact with.
Conversational marketing is a great way for any brand to become effective in interacting with the audience that they desire. They can do these using messenger apps that they also use daily. This can provide organic and valuable feedback from every customer and allow marketers to improve their decision making and have the trends properly tracked.
Retail Trends in store for the Brands
In the past year, the high street of the UK became dogged because of store closures, poor performance reports, and CVAs or Company Voluntary Arrangements. By the end of the past year, online sales could account for over 20% of the retail sales which is an upward trend that may surely continue beyond 2020.
Because of the increase of the competition online and the costly wage bills and business rates, many stores made of bricks-and-mortar suffered. Since a lot of the shoppers and Millennials valued experience over things, their fortunes ended up dwindling.
Yet, there is now splendid news as experts believe that the retail sector would improve by +1% in the following year because of the consumer confidence’s recent increase. Brands that could adapt their model during these challenging years may benefit because of this new optimism but the market will stay tough for the brands that fell behind.
As business work on leveraging information from various sources, omnichannel retail will stay to influence the purchaser’s behaviour and personalise every shopping experience. Despite predicting the rate of change becoming hard, people can surely expect social commerce to grow and business to focus on sustainability and engaging experiences in their stores. Every eye will be on major food retailers that are now experimenting on making the store automated which includes checkouts without cashiers.
Trends in Data: Digital Transformation and the Next Steps
Whatever sector businesses may operate in, they are now on their way to transforming digitally due to the power and cost-effectiveness of cloud-based services. Like what we are seeing, technology is levelling the SMEs playing field as they can undergo campaigns in email marketing and attract customers at a pay-per-click with a minimal cost. In case the benefits in saving time and possible costs may not become sufficient for an incentive, allowing the tax to get submitted digitally can surely motivate smaller companies to go for business software that has a basis on the cloud.
There are even major firms that are highly likely to make an investment in resources involving data automation, IoT or Internet of Things, predictive and real-time analytics. Logistics, banking, retail, and manufacturing already underwent a transformation because of the big data which is why people should expect it to get widely used in everything from clamping down on any fraud to predicting any natural disaster and tackling the issue of climate change.
Since personal data is now a commodity that gets increasingly prized, businesses now undergo pressure to have their privacy and security policies reviewed. Due to the fact that the ICO or Information Commissioner’s Office issued a lot of penalties for breaches in data in the past 2019, this indicates that there are individuals and companies that are not seriously considering their legal obligations.
Because of the reputational damage and fines, it is vital to allow 2020 as a year that will force businesses to make sure that all of their practices, including their suppliers, are complying with relevant regulations such as the GDPR or General Data Protection Regulation.
What will happen next?
Because of the continuous rate of change when it comes to regulation, consumer attitudes, the economy, and technology, people may continuously undergo challenges so they can stay ahead of the curve. It can be possible to drive for success because of innovation and agility. However, it may become costly to jump on any of the latest trends on consumers as there is proof that they happen momentarily.
In order for a business to avoid this, they will need leveraged data so they can engage with any customer, widen their list of prospects, get the most out of every opportunity for sales, and have their experience improved. With your budget, objectives, business, sales, and marketing strategies, these may continuously get underpinned with high-quality data.
Once you have a loyal base of customers, this year will become a golden opportunity for you to have your company sustainably scaled up without getting exposed to financial risks that are unnecessary. Uncovering new opportunities for your business is just as vital as ensuring that your current customers will pay you in full on time while providing protection to your credit score and cash flow.
The Dab Hand Difference
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