The small business landscape is constantly evolving due to technological developments, economic shifts, and changing consumer buying patterns.
With 2023 in the rear view, the businesses that will remain ahead of the curve are those that stay abreast of the latest trends shaping the industry in 2024.
To help set you up for success, here are eight key trends to remain aware of.
The pandemic had a far-reaching impact on global supply chains, leading to many disruptions. SMBs were particularly badly hit, with 11% facing supply chain issues.
In response, they have already taken steps to build more resilient supply chains. In 2024, we will see an increasing number of SMBs doing this by implementing various strategies.
They will continue to reduce their reliance on a single source by partnering with different suppliers from different regions, gain better visibility into their supply chains by investing more money in technologies like AI and IoT, and maintain optimal inventory levels to meet demand by adopting inventory management software and demand forecasting tools.
We also saw how the pandemic accelerated the adoption of flexible work arrangements, with many companies embracing remote or hybrid work models. In 2024, we predict not only that these flexible arrangements will become a more permanent fixture at many companies but also that many more companies will start experimenting with them to find what works for them.
Will they become a permanent fixture in every company? Probably not. Will there be challenges? Of course. One of the biggest issues is that we as humans crave connection, and having a meeting via video call, for instance, doesn’t fulfill that need. You can’t have these serendipitous encounters where you bump into colleagues and talk about things that allow you to bond with them.
So, while we predict a continued proliferation of flexible work arrangements, the hybrid model, where people can work from home and connect in person, will gain increased traction.
Many digital tools are already available for communication, project management, file sharing, and even brainstorming. Examples include Slack, Trello, Dropbox, and MindMeister.
The continued shift towards businesses embracing distributed work and a desire for greater efficiency in 2024 will lead to an even greater focus on using digital technologies to promote communication, collaboration, teamwork, and digital transformation.
Digital transformation will be more prevalent in some industries than others. For instance, in the construction industry, one of the least digitized industries in the world, 75 percent of construction companies plan to increase their investment in digital transformation in the hopes of streamlining operations.
While different construction companies will prioritize their own combination of technologies, a few technologies we expect to be thrown in the mix include inventory management software (IMS) for real-time visibility into materials and equipment, mobile technology for communication on the go, and building information modeling for better project visualization and more accurate project designs.
The launch of ChatGPT toward the end of 2022 sparked a huge interest in AI applications and generative AI (AI that creates new data and content like videos and images). While there were—and continue to be—fears of job displacement, many businesses recognize how AI can benefit them.
Rather than being a threat, AI can complement their work, not compete with it. It can be used to save time to focus on high-value tasks and money, especially if businesses don’t have the budget to hire help.
Expect AI adoption to accelerate in 2024, with more and more businesses experimenting with it to find use cases across various business functions like marketing, sales, customer service, accounting, and even logistics. This may involve using AI for everything from data entry and analysis in accounting to demand forecasting and warehouse automation in logistics.
AI and automation may be the future, but the human touch will always remain important. In fact, according to Redpoint Global, 77% of consumers feel the human element is still crucial for maintaining positive customer experiences.
The SMBs that will stand head and shoulders above the rest in 2024 will be those who can deliver better, more personalized customer experiences. They will get to know their customers personally, be friendlier and more human, offer personalized communication, provide a seamless and consistent omnichannel experience, encourage customer feedback so customers feel their input matters, and use predictive analytics to anticipate their needs.
According to NielsenIQ’s latest sustainability study, 69% of global shoppers feel sustainability is more important to them than it was two years ago, and 47% of consumers are very likely to choose a specific brand that’s healthy for them and the planet.
While becoming more sustainable is, first and foremost, a moral imperative as our impact on the environment becomes increasingly severe, smart businesses recognize it’s also a strategic one as it boosts brand reputation and opens up new markets.
With customers increasingly voting with their wallets by supporting businesses that embody these sustainable practices, in 2024, we’ll see companies already invested in sustainability double down to become even more sustainable. Many more newcomers will join the party, too.
Expect more businesses to invest in eco-friendly packaging strategies, implement comprehensive recycling programs, become more energy efficient by investing in renewable energy, engage in community outreach programs, and work with suppliers who share the same values.
There is already a strong business case for building a diverse and inclusive workforce, with research showing that it contributes to revenue growth and fuels innovation.
But in 2024, this trend will be more important than ever, especially as AI adoption increases and businesses realize that the constantly changing demographics of the workforce require them to embrace diversity to appeal to a border market and attract top talent.
We expect businesses to invest more in training and education programs like sensitivity training and cultural competency workshops to encourage diversity and inclusion. We also anticipate a greater focus on building a more diverse supply chain, with companies partnering with various suppliers to support economic empowerment.
Finally, many companies will rethink recruitment practices to appeal to a broader labor market. This may involve tweaking job descriptions for increased inclusivity, implementing blind recruitment strategies to minimize unconscious bias, and using diverse hiring panels.
According to a Taradel, 94% of small businesses plan to increase their marketing spend in 2024. But where exactly is all this money going? Here are a few channels we anticipate SMBs to use:
- Social media. Social media advertising remains one of the most popular advertising channels, with 70% of small businesses investing in it and more than a quarter spending 10-30% of their total advertising budget on it. This shouldn’t be a surprise as it is one of the most cost-effective channels and has a global reach.
- Search engine optimization (SEO). While the SEO landscape remains very competitive, SMBs will continue investing in search engine marketing because creating campaigns is easy without ever leaving the office. All that’s needed is some keyword research, design tools, and analytics.
- Direct mail. Many businesses may rely on social media. However, old-school marketing tactics like direct mail will remain popular in 2024 because they’re highly targeted and have emotional value. What says you care more than, for example, taking the time to write a personal card in a day and age where it’s so easy to send a quick email?
- Email marketing. Email marketing may not have strong emotional value like direct mail, but it’s relatively inexpensive and has one of the highest ROIs: $36 for every dollar spent. For that reason, we expect email marketing to remain a marketing method that many small businesses continue to turn to.
The small business landscape may be constantly changing. Still, you can set yourself up for success by remaining aware of the latest industry trends and planning ahead. Tapping into these eight key small business trends will help you do precisely that.