Series sponsored by Microsoft
What better time than the beginning of a new year to embrace new concepts, ideas, and markets in order to propel your small business forward, or get the push you need to launch a new company? Here are the small business trends you should pay attention to in the coming year.
The first thing you should know is that demographics matter when it comes to marketing—and it’s not as cut and dry as it used to be. Today, people of the same age and gender have less in common than they used to, and people of different ages and genders share more in common than they previously did. So think about the similarities among the generations when marketing your products. Can you sell the same goods to women that you currently market to teens?
Don’t forget the kids either. Gen Z (Americans born between 2001 and the present day) spend more than $44 billion of their own money, and they influence another $500 billion in sales. They are the most ethnically diverse generation ever in America, and prefer shopping online at sites that also have physical locations. According to Advertising Age, they’re “true digital natives—the first generation born in a digital world. Businesses should act digitally native too, creating a seamless and strong overarching brand experience in-store, digital, and mobile.” In fact Ad Age says it’s “shocking” how few retailers reach Gen Z, leaving lots of opportunity for entrepreneurs to be their marketers of choice.
But there’s no group with more market influence today than Millennials, also known as Gen Y. The largest demographic group ever born in this county, America’s 83.1 million Millennials (born between 1982 and 2000) are having a huge impact on many industries. Look for an increase in the number of weddings as the bulk of Gen Y starts approaching the average age for getting married (27 for women, 29 for men). The $79 billion wedding industry touches so many businesses, such as restaurants, florists, caterers, bakeries, tourism, hair and makeup stylists, retailers selling wedding attire, gifts, stationery, jewelry, and many more. It is vital entrepreneurs targeting brides and grooms be tech-savvy, since 93 percent of those planning weddings use online resources to do so and 61 percent use their mobile phones to access those businesses, so make sure your website is mobile-friendly.
Millennials are also impacting home décor in a different way than older generations. They want smaller, functional homes—in fact, 77% want a home with technological innovations. And after the weddings and homes come babies. In 2014 there were 3,985,824 babies born in America, very close to 4 million, which marks an official baby boom year.
If you want to reach Millennials, the best way is to email them. Over 40 percent say they prefer being contacted via email, rather than social media (5 percent) and text messages (2 percent).
But Millennials are important in another way to small business owners—as potential employees. This trend has years to go, so there are some things you should know about Millennial staffers.
As Cindy Bates, Vice President of Microsoft U.S. SMB group, wrote on her blog, there are “four secrets to success” in helping Millennials thrive in the workplace:
- Create a culture of collaboration
- Offer the latest technology
- Keep data safe
- Have a strong purpose
Bates also notes three best practices to help your business appeal to this important generation:
1. Foster a culture of collaboration. This is the No. 1 attribute for Millennials in the workplace. In fact, 65 percent prefer having face-to-face meetings.
2. Invest in a modern workplace. Since many are digital natives, Millennials in the workforce “demand adequate technology to do their jobs.” Almost all respondents (93 percent) in a survey taken by Microsoft say the latest technology was important in choosing an employer.
3. Live by a strong mission and value systems. “Today’s younger workforce has an independent mindset and is looking to align their professional careers with a higher purpose. [And] they’re picking companies to work for that have clearly defined values and a strong mission, with 88 percent of respondents saying these traits are something that draws them to a company.”
For more on attracting and keeping Millennial workers, you can read Cindy’s full blog post here.
Retail Reigns Supreme
As the United States has put the recession behind us, retail sales are on the upswing. And a big part of that is ecommerce. The primary factor in convincing consumers to buy something online is free shipping—and 48 percent of consumers say they’ll spend more to reach free shipping minimums.
Most Americans (69 percent) shop online at least once a month and 33 percent do so weekly. The biggest online shoppers are parents, and the more kids they have under age 18, the more they buy online. Every week, 40 percent of online shoppers with one child buy something online, 56 percent of parents with two kids and 66 percent with three children buy online. This all compares to only 23 percent of consumers without kids who make weekly online purchases.
What are consumers spending on? The 80 million U.S. households that own pets spent about $61 billion this year on their animals. Other hot businesses include men’s grooming products and services, which will hit $5.5 billion sales in 2015, up $2.5 billion in only three years, and the athletic clothing market which Barclays estimates will grow nearly 50 percent—to over $100 billion by 2020
There’s always a “hot” food trend or two, and next year will be no exception. Look for artisanal foods (the “reinvention” of existing food products, such as bacon, mayo, ice cream, oils, salad dressings, syrups, sparkling waters, ketchup, and juices) to continue to be in demand. Gourmet-style ice cream sandwiches are suddenly booming (think of ice cream sandwiched between big, chunky cookies or large macaroons, donuts, waffles, cinnamon rolls, and pop-tarts). Definitely not healthy to eat, but businesses in this field are building a healthy bottom line.
Technology plays a big part in all that’s hot, and one aspect that’s sure to get hotter is mobile commerce (m-commerce). By the end of this year, 30 percent of all ecommerce sales are expected to come from m-commerce, totaling $104.1 billion, which is up 39 percent from 2014. And you can’t ignore mobile here either—59 percent of consumers use smartphone to research products before making a purchase and 65 percent use tablets. Most (80 percent) want retailers to offer more mobile deals and coupons.
We hope we’ve given you the knowledge, insight, and inspiration you need to make this year a banner year for your small business. Good luck!
Read the other articles in the series:
Turbocharge Your Business Productivity
How Going Mobile Is Crucial to Your Business Success
How Cloud Technology Can Help Your Business Grow
4 Reasons You Must Update Your Business Software
About the Author
Rieva Lesonsky is CEO of GrowBiz Media, a media and custom content company focusing on small business and entrepreneurship. Email Rieva at email@example.com, follow her on Google+ and Twitter.com/Rieva, and visit her website, SmallBizDaily.com, to get the scoop on business trends and sign up for Rieva’s free TrendCast reports.