In the ever-evolving landscape of small businesses, staying ahead of emerging trends is crucial for growth and success. As we step into 2023, several key trends are shaping the business environment, from sustainability to digital transformation. Let's look into these trends and discover how small businesses can leverage them to their advantage.
Trend 1: Affordable Sustainability
Sustainability has shifted from being a mere buzzword to a core business strategy for small and medium-sized businesses (SMEs). More than half of SMEs have already invested in sustainability, driven by changing consumer behaviour. Deloitte reports that consumers are adopting sustainable lifestyles, prompted by concerns about the climate crisis and the cost of living. Brands that align with ethical and environmental values are gaining favour, particularly in frequently purchased categories like food, clothing, and beauty products. Circularity, durability, and waste reduction are central themes within sustainability. Consumers are gravitating toward products that can be repaired and reused, rather than just recycled. While affordability remains a challenge, small businesses have a unique opportunity to offer sustainable options, such as locally sourced goods and trusted information. Tip for 2023: Dive deeper into sustainability trends like affordability, durability, and circularity to uncover new growth opportunities while emphasizing ethical and environmental factors.
Trend 2: Environmental, Social, Governance (ESG)
Small businesses are being called upon to demonstrate their ethical credentials, going beyond words and proving their commitment through actions. Ethical consumer spending is on the rise, prompting brands to build trust by showcasing genuine environmental and social responsibility. An ESG strategy can differentiate small businesses in 2023, highlighting their transparency and responsibility. Research indicates that businesses focused on ESG have experienced around a 9% increase in profits over the past three years. ESG isn't mandatory for small businesses, but it offers substantial benefits. Investors and consumers alike seek out brands that align with their values. By embracing ESG principles, small businesses can showcase their commitment to sustainable practices, ultimately maximising their reputation. Tip for 2023: Explore government-supported initiatives that can assist in areas such as reducing carbon footprints and promoting ethical leadership.
Trend 3: Green Supply Chains
With the global shift toward net zero emissions, brands are increasingly looking to green their supply chains. A growing number of large companies are setting ambitious sustainability goals, and this presents an opportunity for small businesses to become preferred green suppliers or partners. By greening their supply chains, businesses can also foster innovation and secure future growth. Tip for 2023: Consider local suppliers to enhance your supply chain's sustainability and reduce your carbon footprint. Don't hesitate to bring certain business processes in-house to further green your operations.
Trend 4: Deeper Digital Transformation
The pandemic has accelerated digital adoption among small businesses. Digital tools are no longer optional but essential for survival and growth. Small businesses can leverage technology to improve customer experiences, enhance operational efficiency, and utilize data for sustainability initiatives. Staying attuned to digital trends can provide a competitive edge and help identify new market opportunities. Tip for 2023: Explore government programs like Help to Grow: Digital to access advice and discounts on productivity-enhancing software.
Trend 5: Immersive Customer Experience
Creating captivating customer experiences gains paramount importance in 2023, as consumers become more discerning due to the cost-of-living crisis. Leveraging augmented reality and digital tools, small businesses can transform online interactions. Virtual walkthroughs and product simulations enable customers to engage more deeply, building stronger connections. Tip for 2023: Embrace immersive customer experiences that go beyond products and services, showcasing why customers should choose your brand.
Trend 6: Founder-Led Brands
Small business founders possess a wealth of expertise, passion, and long-term vision. As a founder, you can embody your brand and act as an influencer, sharing your story and mission. Founder-led marketing, through platforms like social media and podcasts, can establish your brand's uniqueness and purpose, resonating with consumers. In navigating these trends, small businesses have a unique opportunity to drive growth, foster sustainability, and create lasting customer connections. Embracing these trends can enhance small businesses into a successful and innovative future.
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Source: Experian. (2023). Small Business Trends for 2023. Experian Latest Thinking - Small Business. URL: https://www.experian.co.uk/blogs/latest-thinking/small-business/small-business-trends/