2018 is right around the corner, and thinking about the year ahead can help any business strategically to gain competitive advantage in the new year. There is no doubt that 2018 will be a difficult year. The successful companies will be those that change to adapt to the market.
There are three key aspect to consider:
- High living costs (inflation) will result in less expendable income.
- Consumers’ confidence and political flux will remain in the spotlight
- Well qualified citizens will continue to emigrate and South Africa’s demographics will continue to change and develop.
To mitigate these and other risks we advise the following:
The franchisor must:
- Increase their support levels to their franchisees.
- Increase promotional marketing to increase customer count.
- Negotiate with suppliers to secure better deals and pass all the benefits on to the franchisees.
- Be prepared to financially support good, conforming franchisees during these difficult times.
- Analyse the franchisee’s financial performance and benchmark them against best practice.
The franchisees must:
- Carefully analyse financial performance and optimise the business.
- Conduct local marketing to attract customer count.
- Keep up customer service – train and motivate staff.
- Promote quiet times with promotional activity.
Meanwhile, key global trends will continue to influence our market. Keeping up with trends will prepare a business on what to expect and how to adapt and improve accordingly.
Below, we look at 18 trends entrepreneurs should keep an eye out for
1. Artificial intelligence drives customer experience
- There are tools and techniques to help businesses understand their consumers, market and competitors, businesses need to adapt and incorporate these elements to ensure a competitive advantage
- Businesses are embracing artificial intelligence to enrich customer interaction that are repetitive and redundant as well as processing big data. E.g. using real-time customer data from cellphones such as location and online search history
2. Live interaction and streaming over social media platforms
- Businesses are realising that building online communities through continuous live and personal interactions/engagement with consumers are the key to brand loyalty. E.g Facebook live videos encourage real time interaction with an audience.
- Video has become a very important part of successful businesses, consumers have a need for real connections with real people.
3. Understand the new generation
- The workforce structure is slowly but surely changing, baby boomers are reaching retirement levels, millennials are moving into higher positions of power, and they will have decision making abilities, whereas generation Z is at the verge of entering the workforce. Companies will need to understand the next generation and how to manage them accordingly as well as their consumers.
4. Staffing is on the rise
- Evidently high demand sectors such as health care related services will see an increase in employee wage structures. With the high unemployment rate companies will feel pressurised to adjust structures to attract and retain quality workers.
- In tough economic times companies will need to be innovate and seek opportunities to benefit employees apart from compensation structures this can be achieved by additional benefits, flexibility and autonomy.
- Collaborative work environments are becoming more popular, therefore flexible work will become a big trend – i.e. staff will work their hours to fit around their personal lives
5. Social learning
- More professionals are working remotely and require social learning opportunities to ensure everyone stays connected and developed outside the office. Social learning takes place in an informal one-on-one peer interaction and promotes autonomy, self-direction and learner engagement, thus removing isolated experiences and departments.
6. Consumer purchase behaviour
- Today’s consumers are very informed, knowledgeable and source information on products, options and prices through trusted online social networks; consumers conduct more research and due diligence before purchasing items in a store
- Consumers will demand customisation to suit their exact needs.
- Consumers reward transparency – consumers are seeking businesses with knowledge, they want to know where your products come from and the reasoning for actions. This needs to filter down to staff members as well, they need to be able to answer consumer questions relating to products, services and processes.
7. All things marketing
- Drive marketing initiatives to focus on solving consumer problems – Business need to focus marketing initiatives and messages to problem solving instead of feature offering – consumers might not know they have a need for your service until you point out the problems it can solve in other words, educate, guide and advise.
- Local advertising will now be more intense due to real-time data and location sharing on devices – businesses can now make marketing campaigns very specific, targeted and relevant.
- It is all about getting content to where your consumers are – businesses need to use social media platforms as an effective way to do so
8. Blockchain technology enables new digital transactions that disrupts traditional business practices.
- This provides businesses with opportunities to build new efficiencies into their models and reach the market in compelling new ways. Blockchain offers transparent and open access to a distributed chain of data that are listed sequentially in block. Thus, preventing data tampering and increasing trustworthiness. This platform is not only limited to information, it can exchange and store anything of value securely.
9. Focusing of data quality
- Due to the recent explosion of big data , businesses have a vast amount of data available which can be seen as a challenge and opportunity. The key issue is the know which data is irrelevant to your business so that it won’t be considered or used. Businesses need to have a clear mindset on their goals and target audience to ensure accuracy and value of research and algorithms
10. Increasing levels of cybersecurity
- We are living in a technological online driven era where all the innovations and advancements allow businesses to build connections with consumers based on trust. Cybersecurity will continue to be a threat;
- Businesses have the responsibility to secure data and information from any breaches; security should be a top concern for all businesses who have an online presence this can include having a security plan, a password system or manager, freezing credit, etc.
11. Perfecting order deliveries
- Businesses will need to adopt techniques and processes to increase process efficiency to shorten the delivery time to ensure ultimate customer satisfaction
- Businesses are exploring delivery options to reduce costs – therefore leveraging deliver-to-store option would reduce costs e.g. free delivery for customers, you attract them to the physical store, and there are no return costs involved if they aren’t satisfied.
- Improve logistics by outsourcing deliveries to a business whose core function is specialising in that activity e.g. restaurant outsourcing to Mr D owned by Take-a lot, who has a huge distribution network that can assist. In this way, the restaurant adds value to the consumer without compromising on quality and strengths.
12. “Smart” devices are taking over
- The internet of things (or IoT) connects devices to the internet to open up new possibilities for using various devices. Online connectivity has started to turn our appliances and electronics into smart devices and products e.g. Google home, applications that turn your phone into a remote device for televisions, air conditioning, watches that sync to smartphones, etc
13. Mobility is key for all business models
- Consumers are always on the move and you want to be considered for the transaction even if they aren’t in your store physically, therefore websites should be compatible for various devices and operating software e.g smartphones, tablets, etc
- Mobile pay options are very popular at this moment and allows consumers to purchase items in a simple and convenient way e.g. Tap and Go, Zapper, Visa, Master Card and PayPal facilities
14. Clicks vs Bricks = Omnichannel
- We continuously reiterate the importance of online interaction and presence, but a physical store presence is just as important. If businesses want to keep consumers frequenting their store they need to provide an experience that they won’t receive online. Consumers still need a personal face-to-face interaction/relationship with businesses
- We have noticed a trend that consumers peruse items in the store but purchase it online elsewhere, businesses need to inform customers that there is a mobile experience where they can purchase online from your store.
15. Stealth stores
- It is important to determine if consumers prefer independent local businesses to larger chains. Some consumers may feel that big isn’t beautiful and they would rather support local, independent and unique businesses. Therefore, some bigger chains are developing creative ways to capture this market segment. E.g Starbucks Coffee shop has “stealth”/unbranded stores disguised as local coffee shops.
- In franchising, franchisors will find a local person in the community to have an independent store to ensure support from the community
16. Corporate social responsibilities
- In the tough economic times we are facing and will continue to face in 2018, businesses are realising the importance of giving back to their immediate community and building social capital.
- Businesses are gaining financing through alternative platforms such as crowdfunding, in which individuals invest a small amount towards an overall goal, campaign or business opportunity.
18. Emerging and growing markets
- Specialised on-demand B2B like Uber, Airbnb
- Manufacturing businesses are expanding to control their entire distribution and supply chain
- Medical and Home-care
- Lifestyle, Wellness and Health
- DIY and repair
- Educational, especially Early Childhood Development