Article written by Colin Timmis (General Country Manager and professional accountant – Xero South Africa)
The impact of COVID-19 on the South African economy still loomed large in 2021. While the outlook is still somewhat bleak, the country’s small business sector is showing a modicum of optimism, according to our latest State of Small Business report. A likely trigger for this slight, yet encouraging buoyancy is the use of technology. According to the report, one in four businesses has improved their operations with tech in the past year.
I recently sat down with two business experts – Mike Anderson, National Small Business Chamber (NSBC) CEO and Fred Roed, Heavy Chef CEO – to discuss three tech trends small businesses should be considering this year.
Creating a standout e-commerce experience
With the ability to create an online retail presence within minutes, and a fully functional store within a day or two, entrepreneurs from all sectors are ensuring they have online stores. The pandemic has only accelerated this trend, and consumers now expect to find brands online.
According to Fred Roed, Heavy Chef CEO, niche-commerce is the most profound preference. “The demand for e-commerce lessons on our learning platform is unprecedented. Platforms such as WooCommerce, Shopify, Squarespace, and third-party platforms such as Takealot, make it super easy for vendors to scale their business beyond their physical presence.”
“The most significant trend will be that small, ultra-niche players will capture segments of the market and use their greater domain expertise to compete head-on against bigger retailers.”
Fred highlights the migration towards emotion as a sub-trend to niche-commerce. “In a world where the lines between online and offline are becoming increasingly blurred, the customer is in control more than ever. A user journey will crisscross from an online search for a product to visiting a store to snapping a photo, uploading it to an online repository, and then paying via the latest contactless payment method.”
“Buoyed by this power, the way the buyer feels will be increasingly important in retaining loyalty. This means spending more time on customer experience, aesthetics, tactile details, brand values and after-sales service”, says Fred.
Digital marketing tools to be game changers in 2022
Mike Anderson, NSBC CEO, believes small business owners should accept that digital marketing is here to stay. “While digital marketing may not continue to largely replace in-person profile building, as it has during the pandemic, its cost and time-efficiency can no longer be ignored. Seize those opportunities to reach a broad audience consistently,” is his advice.
Making the most of digital marketing tools will be a game changer for many businesses in 2022. This includes Google My Business, local services, ads, and search engine optimisation. Mike advises that small business owners must get on board with knowing, using, and understanding digital marketing tools for lead generation.
Cloud tech that gives greater control over cash flow
Businesses must analyse margins to ascertain which products and services generate actual profits. Having a clear view of cash flow and what money is coming in and out is the only way to make informed decisions. Small businesses simply can’t afford to make mistakes in this regard.
Recent research from Xero found that the three most expensive mistakes businesses made over the last 12 months were:
- Being irresponsible with cash flow (41%)
- Not investing in financial tech fast enough (36%)
- Being too slow to adapt their business (29%)
With cash flow issues topping the list, cloud-based cash flow management tools like Xero will continue to help drive recovery and help businesses to avoid costly mistakes in 2022. These tools can also help small businesses to better plan for the future, by forecasting future cash flow projections based on previous performance.
The road ahead
The pandemic has accelerated digital transformation, and businesses that don’t tap into these trends risk being left behind. Investing in new technology might seem like a burden, but in the long term it will free businesses up to focus on growth and give them the insights they need to win new customers – which creates employment and a healthier economy for all.