Riding the Wave: Trends SMEs Must be Aware of to Succeed in the Next Normal

Riding the Wave: Trends SMEs Must be Aware of to Succeed in the Next Normal

6 key trends to look out for in the next normal

The daily protocols put in place to contain the spread of COVID-19 have now become part of our “new normal”. Businesses too have adapted, though many are still struggling. If there is one key lesson this year has taught us – it is that there is no such thing as being too prepared for what is to come.

This article will detail 8 key trends that have emerged from the COVID-19 storm and are now carrying us towards the “next normal”. Each is worth carefully studying as they can significantly shape the future business landscape – creating both risks and opportunities.

Trend #1 – A distributed workforce with shifting employee values

Work from home (WFH) rapidly shifted from being a privilege available to a small working population, to the default option for most. While there are notable drawbacks to remote working, it is not going away anytime soon. As McKinsey notes, employers must reconfigure their organisations to cater for a distributed workforce. This includes moving towards agile and decentralised structures which enable quicker decision-making – a key advantage in an uncertain environment.

It is not just the nature of work that is changing – employees themselves are as well. Research by Accenture espoused the notion of “liquid expectations” – where employees are increasingly judging employers from a more holistic perspective, with a focus on the “employee experience” just as much as the hard numbers. While it is true that current market conditions are slanted toward employers, the best talent will always have their pick of employers. Retaining them is key for a successful business.

Trend #2 – A focus not just on profit, but on profit with purpose

While an unprofitable business cannot survive for long, COVID-19 has made consumers far more conscious about the kind of impact companies make, both positive and negative. Of course, in current times where many businesses are struggling just to remain afloat, it can be difficult to look beyond the balance sheet and towards “greater good” objectives.

In the long term, consumers will gravitate towards companies that can balance profit with purpose. This trend might not be the highest priority now, but businesses would do well to take notice as the economy recovers.

Trend #3 – The rise of the “contact free” economy

With social distancing now firmly entrenched as part of the “new normal”, the “next normal” will see a continued expansion of what has been dubbed the “Contact Free” Economy. The most obvious application of this is in the growing e-commerce market and the decline of physical cash in lieu of cashless payment methods.

The lesson for businesses is that they must figure out ways to serve their customers in a contact-free manner as much as possible. E-commerce is obvious, but not all products and services can be delivered digitally. For those where face-to-face interaction is still required, businesses should give customers the option of contact-free payments. In the near future, this will likely become a necessity.

Trend #4 – Changing consumer behaviours (in every aspect)

One important facet of this shift is digitalisation. Consumers are – by both necessity and choice – increasingly using digital channels for receiving information, purchasing products, and experiencing the customer journey. This includes both retail and B2B consumers.

However, while digitalisation is a common factor, SMEs would need to prioritize significant variations by both age, demographic, and geography. SMEs must be agile to pick up on the trends exhibited by their own customers and adapt. 

Trend #5 – Accelerated digitalisation widening the gap between winners and losers

ASEAN McKinsey described the COVID-19 crisis as sparking a “great acceleration” – the intensification of existing trends. Prior to the pandemic, we were already seeing a gap between the top performing companies and the bottom. McKinsey believes that the speed at which this gap is expanding is only going to grow.

A key factor separating the two groups is digital-enabled business models which are resilient and future ready versus outdated legacy business models. Digitalisation was already important before the pandemic. 

Trend #6 – Continued assistance from government initiatives

The scale of the pandemic means that governments have had to step up and take more direct control of the economy. Whether in Asia, Europe, or America, governments worldwide have enacted massive stimulus programmes, often involving direct cash infusions to affected businesses and citizens.