For small businesses across America, 2020 was one of the most challenging years in history. Despite the coronavirus pandemic, small business owners have been resilient, pivoting and adapting their business models to navigate continually changing conditions. According to the U.S. Small Business Administration (SBA), four business trends are likely to dominate in 2021.
1. Businesses will Continue to Prioritize E-Commerce
While e-commerce was already growing before the pandemic, a report by IBM shows the shift away from physical stores to digital shopping has sped up by roughly five years. According to the report, e-commerce is projected to grow by 20% in total in 2020. To prepare for this shift in consumer spending, small businesses should fine-tune their e-commerce presence in 2021 to create a seamless experience for customers and make their sites mobile-friendly.
2. Alternative Payment Options will Proliferate
Another trend that is likely to last into 2021 and beyond is the dominance of alternative payment options. In its annual State of Retail Payments study, the National Retail Federation found that no-touch payments (e.g., contactless credit and debit cards or mobile pay) for retailers have increased 69% since January. Among retailers that have implemented contactless payments, 94% expect the increase to continue over the next 18 months. To ensure they are meeting these new demands, small businesses should explore touchless payment options, including online payments with curbside pickup.
3. Remote Work will Persist
During the pandemic, many small businesses shifted to part- or full-time remote work schedules in response to local ordinances. According to a survey by Intermedia, 57% of small- to medium-sized business owners said they will continue to offer remote work options in the long term. Depending on the type of business, it could be beneficial to consider offering remote work options to compete for talented workers in 2021 and beyond.
This also means that businesses may need to invest in additional technology and software solutions going forward to ensure that employees can telework. For example, another survey from GGV Capital shows that 54% of small business owners spent more on software solutions in 2020 than in 2019, and 75% expect that spending to increase this year.
4. Virtual Services will Continue to be in High Demand
According to the U.S. Chamber of Commerce, the pandemic has led to increased demand for certain business types, particularly those related to technology and virtual health and fitness. These include cybersecurity, at-home fitness, food delivery, gaming, home improvement, and telemedicine businesses. These business categories can provide inspiration for those who are considering starting a business or are looking for ways to pivot or expand their existing business.
For additional insights, SBA recommends contacting a local resource partner. Visit www.sba.gov/local-assistance to learn more.