2020 was one of the most challenging years for small businesses in recent history. While we’d like to leave last year squarely in the rearview mirror, there’s no doubt that its impact has stretched into the new year. And more than likely we’ll continue combating its effects throughout the coming year.

Now, there are steps that small business owners can do to prepare for this year. And that all starts by knowing what trends business, marketing, and other professional experts expect to take precedent in 2021. Let’s dive in.

What can small businesses expect in 2021?

These are the top six that we expect to make the greatest impact on small businesses and how your business can leverage them.

1. eCommerce adoption will be a priority

Online shopping and eCommerce sales have been gradually growing every single year. But, according to updated data from IBM’s U.S. Retail Index, the pandemic has accelerated the transition away from physical retail by almost five years. Another report produced by eMarketer estimates that retail eCommerce sales grew by roughly 27.6% in 2020 and that growth will continue in 2021, falling to an expected increase of 14.3% due to the massive acceleration in 2020.

The revolving lockdowns also expanded the number of product categories that consumers are willing to purchase online while readjusting perceptions of necessities. Clothing, for example, saw a gradual decline throughout 2020, while groceries, alcohol, and home improvement products grew by 12%, 16%, and 14% respectively.

Larger businesses, such as Target, were the first to effectively adapt to providing omnichannel fulfillment for their customers. They leveraged physical storefronts as distribution centers, offered no contact pick-up, as well as more refined in-store experiences. It was a simultaneous advancement in both online capabilities and updating the in-person retail experience.

In our recent small business case study, we found that only 22% of small businesses made the transition to selling online. But the big takeaway is that 100% of those that did, are planning to continue doing so long-term. And we expect the number of businesses exploring online fulfillment to dramatically increase in 2021.

What does this mean for small businesses?

It can be difficult to adapt to selling online. It’s a totally different business model that requires you to build new customer relationships, explore unique supply chain processes, and potentially find a different value proposition for your products or services. And while you’ll have a difficult time competing with the scale of the Amazon’s of the world, other elements of eCommerce are trending in your favor.

More and more consumers are considering who they’re purchasing from, opting for the online version of buying local or supporting brick and mortar small businesses. Focus on niche markets and building a community around your eCommerce brand. Try to engage more through your social channels, and provide multiple avenues of consistent communication for your customers.

Lastly, try to be as transparent as possible. Explain your mission, where your products come from, who your team is, and most importantly, give them as much visibility into shipping as possible. Opting for online sales likely won’t be an easy transition, so start small, learn how to run this new sales channel, and gradually expand your capabilities as you find your footing.

2. Adapting to remote work and digital collaboration

Remote work and non-traditional working hours have gradually been expanding, thanks in part to growth in the gig economy, oversaturation in geographic areas surrounding large technology companies, and the need to find top-tier talent. In 2020, the transition to remote work accelerated primarily due to health and safety concerns, as well as cost-saving initiatives. And for those that adapted to working remotely, it looks like it’s here to stay.

According to our survey findings, 53% of small to medium-sized businesses plan to offer remote work options long-term. And a similar study by Intermedia found that 57% of SMB’s plan to offer remote work options for employees, fueled by benefits such as employee availability, an increase in job and life satisfaction, and a decrease in overhead costs.

What does this mean for small businesses?

As things start reopening, and you consider bringing employees back to the office or storefront, you’ll need to weigh the benefits and drawbacks of maintaining remote work. Minimized costs and employee work-life balance are positives that we already addressed, but the lack of in-person collaboration can be a major issue for some employees and owners. This is where a hybrid working model may be beneficial moving forward.

Rather than exclusively requiring employees to be remote or in-office, it may be best to give them the option to choose. This hands more control to your employees and encourages your teams to keep collaborating no matter where they happen to be. Your role will be to maintain that balance and work through all the processional kinks that may be hampering both remote and in-office employees.

For the industries out there that simply can’t support remote work, you’ll need to focus on applying the core benefits to in-office work. Greater autonomy and promoting a healthy work-life balance are a great place to start and can be directed by establishing clear company goals and key metrics to follow.

3. Leveraging data for better management practices

In our recent small business study, we found that 40% of those with business plans were regularly updating them to check the viability of emerging revenue streams. 61% of those that did this analysis stated that they were confident in the health of their business.

So while making decisions in 2020 was filled with uncertainty, those that leveraged their financial data to make quick, educated decisions found themselves successfully navigating the crisis. But it won’t stop there, as more and more businesses look to leverage combinations of internal and big data to make smarter decisions.

What does this mean for small businesses?

To take advantage of more and more data solutions becoming available, you need to identify metrics within your business that you want to track. If you already use accounting software, you’ll likely be able to use it to track most of your core business vitals, although some elements, like lifetime value, for instance, may take some external development to get right.

Outside of your financial data, you’ll also want to evaluate other avenues, most likely digital, that you can measure. These may include things like email open rates, social media engagement, web analytics, or paid ad conversions, just to name a few. If you’re already leveraging any of these channels, run through the same process of identifying key metrics that are important to your success. And if you can, find ways to tie them back the core vitals you’ve already established.

Lastly, make sure you have a growth plan that you can easily adapt. Just having access to useful data is a great first step, but if you cannot quickly analyze and execute on the insights you pull in, then they’re just a bunch of numbers on a sheet. Find ways to integrate your data with your strategy, and keep a lean working version of your plan available so you can actively make adjustments whenever necessary.

4. Business model adjustments

According to our recent small business study, 75% of businesses made adjustments to their products or services. 31% defined them as major changes and 27% of those that did were exploring new streams of revenue with these adjustments. And these changes aren’t finished, with 33% of respondents stating that they plan to add additional revenue streams in 2021.

According to a recent study by McKinsey & Company, most of these adjustments are digital in nature and is fully dependent on the industry you operate in. Auto and assembly, for example, saw little increase in digital product adoption. But industries like healthcare, financial services, and professional services reported a jump nearly 2 times that of consumer packaged good businesses.

McKinsey also asked about expectations for long-term change. They found that the largest changes, which include switching to remote work, rapidly changing consumer needs, and the desire for remote products and services, are expected to stick through recovery. Businesses that have already made these adjustments are found to be doing so with long-term transitions in mind, which may also be causing these changes to become more permanent.

What does this mean for small businesses?

Pivoting your business model is a large investment, but has become more and more necessary throughout this crisis. Not just for traditional brick-and-mortar businesses, but for industries experiencing growth, such as eCommerce, as well. Adjustments to your business model are now not just necessary to survive but to stay competitive and carve out a more valuable product or service position.

Actually going through the process of assessing your business model and pivoting when necessary can be complicated. But according to the Harvard Business Review, it can be condensed down to four dimensions — customer demand, value propositions, value demonstrations, and your capabilities. Work through each of these dimensions and then look for ways that they are connected, and what will need to be addressed if you make adjustments in a specific area.

Before you decide to execute any changes, work through different scenarios to understand your best and worst-case position. This can save you from making rash decisions without a safety net, as well as provide stretch goals or alternative milestones if you find greater success.

5. Investment in automation tools

As of August 2020, IDC (the International Data Corporation) estimated that the AI market would grow 12.3% by the end of the year. This increase was fueled by the push for digital services and data insights, as well as the need to cut costs. On a larger scale, this includes elements like deep learning, big data, and user experience, but it also means an increased investment in HR, payroll, and customer service tools.

While the IDC does expect growth to be lesser than initially expected in 2021, due to the slow handling of COVID-19, it will still maintain a double-digit growth trajectory.

What does this mean for small businesses?

The actual growth of the AI market is somewhat negligent for small businesses not operating within that industry. But what is important about this growth, is how it will continue to augment employee productivity and connectivity. Businesses are expected to keep investing in tools to help stabilize their business and make management and planning more effective.

With remote work, online selling, and data analysis continuing to trend upward, AI solutions will grow along with them. So, if you aren’t already investing in tools that can improve productivity, customer service, or increase your access to useful data, just know that your competitors likely have already. That doesn’t mean you should subscribe to every single tool out there, but identify solutions that your business can benefit from having.

6. The need for online engagement

It should come as no surprise that internet and mobile usage was up in 2020. According to a joint study headed by Next Web, the number of people using the internet has grown by 7.3%, mobile usage by 1.3%, and social media users by 13%. With the number of social media users now surpassing half of the world’s total population.

Based on data from Hootsuite, they estimate that users will spend a total of 3.7 trillion hours on social media in 2021. And App Annie’s State of Mobile Report, now shows that mobile usage has surpassed traditional TV, turning it into most people’s first screen. But, according to GWI, at least two-thirds of mobile users say that they also use a laptop or desktop computer to also go online.

The use of multiple platforms also extends to social media. Thanks to Kepios’ analysis of GWI’s data, at least 98% of users use two social media platforms. Meaning you can expect to see audience overlap such as 85% of age 16 to 64 TikTok users also having Facebook or 95% of Instagram users in the same age range also using YouTube.

What does this mean for small businesses?

More and more people are spending time online, which means there are more eyes on your online presence as well as more competition for their attention. But that does leave an opportunity for small businesses to leverage online engagement in a specific way, building an authentic community.

In a roundup of insights from social media marketing experts conducted by Search Engine Journal, Senior Social Media Manager for Jellyfish, Michael Williams explains that “brands need to counteract the social media noise, think ‘less is more,’ and create messaging that actually resonates with their key audience(s).”

This is further echoed by Mary Davies, President of Beanstalk Internet Marketing, who explains that “people are looking for connections on a personal level with businesses and brands that feel like part of their community. Businesses will need to put more effort than ever into being more of a helpful, understanding ‘friend’ in a community than simply a service/product provider.”

So what does this mean for your business? First, you can focus on one or two platforms to engage with and still reach a majority of global social media users. Second, you need to earn your user’s attention by producing authentic, customer-focused content that reflects the mission of your business.

Lastly, you need to reflect your efforts on social in every digital touchpoint you have online. This includes your website, forum interactions, digital ads, and anywhere else your customers may interact with you. You need to provide a streamlined, authentic experience that can be accessed from any and all devices that your customer may decide to use.

Prepare your business for the new normal

There may have been a point in time where we could have expected things to go back to exactly the way they were before the pandemic. As it has stretched on, and consumers and businesses alike have adapted, that is becoming almost 100% unlikely. We may eventually see a shift back to in-person interactions and service, but that will likely be a luxury tacked onto digital offerings.

Out of every trend we explored today, we highly recommend that you start leveraging #3 and explore more opportunities to integrate data analysis in your operations. By leveraging tools, and your own financial documents alongside an active plan, you can identify opportunities in your business to leverage current shifts in technology and consumer interest. If you start planning now, take a good long look at your operations and begin making long-term adjustments, you’ll be far more likely to see growth in 2021.