The landscape surrounding small businesses is a tapestry of challenges and opportunities. As the global economy continues to navigate the complexities of recovery, inflation, and technology disruption, small businesses are at a crossroads. The May 2024 Amex for Business Small Business Trendex report reveals how small businesses are adapting and thriving in this evolving environment.
Embrace the growth of e-commerce
The shift to digital sales channels is one of the most important transformations in the SME sector. According to his November 2023 report for Amex, 53% of small retail businesses reported that most of their sales growth over the past six months came from online or e-commerce platforms.
This change is likely not just a temporary adjustment, but a permanent evolution of the retail industry. The rise in e-commerce clearly shows that the Internet is no longer an ancillary sales channel, but a major source of revenue for many small and medium-sized businesses.
Harness the power of social media
The role of social media in business growth is becoming increasingly prominent, with platforms such as Instagram and Pinterest driving significant sales increases. According to a report by Trendex, 80% of small retailers will use Instagram for sales in 2023, up from 51% a year ago. Business use of Pinterest also increased from 11% to 32%.
These platforms are more than just a marketing tool, they are an important part of a sales strategy and demonstrate how social media is integrated into the customer buying process.
From my own experience, Instagram has become my go-to platform for discovering and learning about small businesses, especially food and dining. Check Instagram for new information, store hours, and if we're offering specials or promotions.
Managing price pressure
Inflation and rising production costs pose major obstacles. Trendex's report highlights that 68% of small business owners consider these their biggest challenges, up from 49% in 2022. This economic pressure forces companies to carefully reevaluate their pricing strategies to maintain profitability without alienating customers. This is a delicate balance and requires innovative solutions, such as leveraging AI and GenAI tools to optimize pricing strategies and manage inventory more efficiently.
Addressing labor issues with technology
Finding and retaining the right employees remains a major challenge, as reported by 40% of small business owners. In response, many businesses are turning to technology solutions such as advanced cash flow management tools and automated payroll systems. These tools help small businesses manage their operations more efficiently and fill labor shortages by increasing productivity through technology.
Increase customer engagement with loyalty programs
Customer loyalty programs are becoming increasingly important, with repeat customers expected to account for 59% of revenue by 2023. Small and medium-sized businesses plan to use technology to track customer preferences and behaviors and implement or enhance loyalty programs by providing more personalized and engaging customer experiences. .
build a prosperous future
The May 2024 Amex for Business Small Business Trendex report shows how small businesses are leveraging technology to address their most pressing challenges. From embracing e-commerce to leveraging social media to integrating advanced technologies like AI, small businesses are doing more than just surviving. They are setting the stage for a new era of growth and innovation.