Despite our best intentions, it’s almost the end of the year and most of us haven’t run a marathon or fixed that weird noise our car makes. 2017 is on its way out, and while much remains the same a lot has changed for the better.
The markets are up, unemployment is down, and consumer confidence hit a 17 year high in October. This all means that Americans have more cash in their hands, and are more willing to spend that cash than they have been in years.
As we move into 2018, some of this momentum will continue, some will get lost, and—hopefully—we’ll pick up some new steam as well. Below, we look at 10 trends small businesses should keep an eye out for in 2018 and some ways to prepare for them.
1. A BUBBLE, SOMEWHERE, WILL POP
There’s a bubble out there, but no one is really sure exactly what this means or where it is. Stocks have risen to crazy heights, with price-to-earnings ratios well above their “normal” ranges. The housing market has rebounded in such a way that talking heads are calling home ownership “an escalator to wealth.”
2018 seems to be pushing hard for a burst bubble. According to The Economist, “The hunger for assets that is driving up prices is also leading investors to take more risks—risks which may not be fully priced into their investments and which they may not fully understand.”
If we’re, en masse, investing in things we don’t really understand, chances are we’re about to have the rug pulled out from under us. Higher prices also mean less room for error.
A bubble floating in midair via Wikimedia Commons
We’re all just waiting for it to pop… (via Wikimedia Commons)
When prices for houses and investments are at a reasonable level, people make purchases without overextending themselves. When earning a higher return requires paying a higher premium, people have to dip into their financial buffer to receive an adequate return.
What does all this mean? People have less in the tank to draw from if things go south and could be forced into selling at a loss to cover their daily expenses. Then the cycle repeats.
The good news is that we’re already hesitant about our current bubble. People aren’t celebrating their newfound wealth like they did in 2007 and 2002 just before past bubbles popped.
WHAT YOU CAN DO
Diversification is the key to surviving almost any dramatic shift. If you have investments, make sure they’re properly balanced to match your demands for risk. It’s easy to forget about your growing nest eggs and end up with a ton of money in stocks at the exact time you want more in something stable, like CDs.
Consider diversifying your business’s revenue streams, too. Having all of your customers come from one social demographic, profession, or geographic area increases your risk of catastrophic failure. Try branching out to smooth any potential bumps before they rock the boat.
2. MILLENNIALS WILL GET THEIR SAY
One of the reasons people might be reserving their monetary leaps for joy could be that a lot of the people getting richer are millennials, a notoriously anxious and cautious group.
Millennials currently spend on the order of $600 billion every year. As that number grows to an estimated $1.4 trillion in 2020, more and more businesses are catering to millennials. In practice, this means more experiential sales and marketing, less emphasis on glitz and glamour, and a push for consumers to “connect” with brands.
Values-based selling is already on the rise, with campaigns such as State Street’s Fearless Girl and Apple’s “Shot on iPhone” seeking to make deeper connections with millennial consumers.
If all this isn’t your cup of tea, I’ve got bad news: millennials are here to spend money and everyone is courting them. As a generation, they’ve seen their parents’ savings wiped out, they’ve exited college only to enter one of the worst job markets in decades, and they’ve lived through some of the worst attacks to ever take place on American soil.
As a result—they’re not overly excitable.
WHAT YOU CAN DO
To sell to millennials, small businesses must find ways to be honest and transparent. The last thing you want is for your marketing or business to come off as gimmicky or a blatant sales presentation.
Compare Netflix to Uber. Netflix has made a real commitment to transparency and collaboration, pushing to give employees power and accountability in a flexible environment. Uber has been dogged by internal complaints and external failures that throw its operating model in stark relief against its publicity.
Netflix is walking the walk, while Uber seems to just be talking.
3. IOT, AI, AND ML WILL BE THE ONGOING BUZZWORDS OF 2018
The internet of things (Iot), artificial intelligence (AI), and machine learning (ML)—or Iotaiml—were the buzzwords that Big Tech couldn’t stop talking about in 2017. Expect more of the same in 2018.
While the terms themselves have reached an almost parodistic level, the ideas behind them are having greater effects every year. Small businesses now have access to many of the benefits of these technologies at low or no cost.
The IoT is fueling hyper local advertising and search (more on this below) while allowing businesses to track shipments and customers like never before. AI lets you turn a bunch of seemingly random data into actual insight about the way customers are interacting with your business.
All the while, ML is pushing your products and services to the best customers on Amazon and Facebook. Iotaiml represents a suite of tools and tech that can help small businesses increase revenue while avoiding rising costs.
WHAT YOU CAN DO
It’s likely that your small business will never directly implement any part of Iotaiml, but it will certainly employ software or services that tap into the tech. My bet is that in 2018, you will touch this tech more than ever before and—if properly implemented—see associated returns.
Be on the lookout for proven Iotaimal software and services. There will be some hype to avoid, but there will also be some winners making the lives of small business owners much better.
4. “MADE IN AMERICA” WILL MAKE ITS RETURN
Okay, “Made in America” hasn’t really gone anywhere, but it has been a smaller movement in recent years. Back in the ’80s, Walmart launched a “Buy American” ad campaign and pushed for products made in the U.S. in its stores.
This year, American products and jobs have often been a focus of the Trump Administration, leading to a reevaluation of U.S. trade agreements and tariffs. While it’s simmering as a social issue right now, in 2018 American made will be a big deal.
Photo of a worker in an American Giant factory in North Carolina
An American Giant factory in North Carolina. (via American Giant)
Manufacturing in America has been on the rise since 2010, after falling steadily from the mid-1980s. Adidas and Under Armour are building manufacturing plants in the U.S., and companies that make difficult to ship items—cars, heavy machinery, and the like—are also onshoring jobs.
The real push in 2018 will have to come from consumers. Large enterprises are becoming increasingly consumer-led, as revenue growth once again takes precedence over cost cutting. By increasing their top line more quickly, businesses can make up for squeezing their costs to the limit during the recession.
WHAT YOU CAN DO
Small businesses are obvious winners in this environment as they offer local alternatives to national chains or services. The key to selling your local service is to make it clear that you understand the needs of your community, and are interested in being a part of something bigger.
That can mean taking on interns, hiring out of regional universities, or giving back to local charities. Whatever it is, make sure you’re not selling while you’re doing it. People—millennials specifically—hate to be sold to, especially when the sale comes in the guise of charity.
5. YOU’LL GET HACKED
This one isn’t so fun. In 2018, you’re going to get hacked. Maybe it’ll be personal, maybe it’ll be your business. One way or another, you’re going to have to put up with someone getting their hands on something you’d rather they didn’t.
The Equifax hack was just the most recent and galling version of what’s in store for us. As more and more of our data is put online, it increases the incentive for hackers to find ways to gain access to it. The U.S.’ relatively lax punishments for businesses that lose information to hackers compound the problem.
Equifax lost the personal information of 145 million Americans. As a result, the company’s stock is down about 15% year over year. Yes, you read that right: only 15% for affecting 145 million Americans. Under Armour’s stock value lost more than that in a single day, just for saying it was going to sell fewer shoes.
With nothing to lose for inactivity, large corporations will continue letting standards slide, which means you and your customers are going to have to deal with the repercussions.
Payment processor Stripe, for example, “[provides] detailed information about disputes and fraud so you can be as informed as possible as users are ultimately responsible for them.” That means, if you accept a fake card, you’ll be paying the price for it.
WHAT YOU CAN DO
I recently spoke to Darren Guccione, the co-founder of Keeper Security, about all this. The short story—it’s the kind of thing everyone should be worried about, and also the kind of thing no one thinks seriously about until it happens to them.
Get yourself a security plan, a password system or manager, and think about freezing your credit. And buckle up, because 2018 is bringing more hacking and theft with it.
6. SCHEDULING LAWS ARE GOING TO CHANGE THE LOCAL LANDSCAPE
In a few weeks, New York City’s new scheduling laws will take effect for fast food and retail employees. These laws have lots of implications, with the largest surrounding changing employee working patterns.
If you don’t give employees 14 days’ notice about a shift change, you’re going to have to pay them a fee. It gives some certainty to employees, but also makes scheduling an even more complex minefield.
Similar laws are in place in San Francisco and Seattle already, with 13 additional states considering similar regulations.
These rules change how you hire your employees, and they mean you have to be smarter about the way you draw up the schedules for those employees. You can’t just rush out a schedule the week before and hope everyone can make it.
WHAT YOU CAN DO
Scheduling laws are part of a larger workers’ rights movement that includes everything from minimum wage increases to paid parental leave. Scheduling is a small part of the overall movement, but it’ll have the biggest effect on your day to day operations.
If you’ve got more than a few people on staff, I’d suggest getting some employee scheduling software—many of the options make use of Iotaiml tech.
7. HYPER LOCAL ADVERTISING WILL HIT THE UNCANNY VALLEY
Your phone now knows where you are at all times, which means that every app you’ve absentmindedly installed and allowed location access knows where you are too.
While that can make games such as Pokemon Go awesome, it can also make advertising incredibly targeted. Hyper local advertising uses your location to serve ads relevant to where you are.
Instead of getting an ad based on that weird Facebook link from Cousin Dave, you’ll get ads based on the fact that you’re near a McDonald’s and it’s lunchtime. I think it’s a pretty cool idea, and it means I’ll see less of the nonsense that usually floods my phone—such as ads for one of the software companies I’ve been researching.
The uncanny valley is just around the corner, though. Soon, you’ll open your phone and get an ad from the store you’re in offering an alternative to something you searched for on your laptop. That’ll give even the most enthusiastic tech adopters among us a moment of pause.
Millennials aren’t interested in being sold to, even if they’re interested in buying. Pushing their personal information right back into their faces is going to backfire, but I suspect the temptation is too much for some brands to resist.
WHAT YOU CAN DO
Small businesses are in a great position to build rapport with customers and market to them in traditional, but personal, ways. Instead of trying to figure out who’s walking by so you can throw a targeted ad at them, opt for a catchy, clever sign that will pull people in and maybe even nab you a social share.
You can get foot traffic the old fashioned way. It stands out from the digital noise, is easy to understand, and doesn’t make anyone feel like their privacy has been violated. Push against the tide and make your brand stand out.
8. REMOTE WORKERS ARE ON THE RISE
According to a Gallup poll, more than 40% of Americans now do some part of their job from home. While the future won’t be office-free, that’s a number that’s only going to rise in 2018.
Employees and employers both get something out of remote work, though the overall benefit hasn’t been proven. Remote workers get to work from the comfort of their own home, while employers need to buy fewer desks.
Former President George W. Bush speaks during a meeting at a restaurant
The remote Oval Office. [Source: White House]
Productivity is the number one challenge here, but there are plenty of ways to keep your remote teams productive. The best route to go is to give employees the flexibility they require and the tools they need to stay connected.
WHAT YOU CAN DO
While it can be tempting to micromanage teleworkers by clocking them in and out or pinging them every thirty minutes, you’ll get more out of your employees by treating them like responsible adults instead of school students. Give people the space to succeed, but make it clear that their remote work option is dependent on results.
Freeing yourself from the office can help you keep everyone happy while expanding the geographic area you can hire from. This opens you up to new talent pools, allowing you to find the best candidates for your business.
9. CUSTOMERS WILL FIGHT TO CONTROL THEIR PERSONAL DATA
We all know that trusting random online businesses is a bad decision. Even so, we keep doing it. We tweet, post, and share without regard for who sees the final product. In 2018, that will start changing.
In part, it’s going to be a function of privacy concerns. Equifax, Target, and every other business that’s been hacked has increased consumer awareness of the risks they’re exposing themselves to on a daily basis.
A larger part will be driven by a handful of companies that see the dual value in selling a product that doesn’t rely on personal information and but does rely on edge computing power.
In short: edge computing moves the heavy data lifting from the cloud into the world of devices. Data storage and some work is still done centrally, but by moving a lot of the logic to your phone, apps can reduce the latency that normally comes with transmission.
WHAT YOU CAN DO
This technology in still in its infancy, but early adopters can make something special here and now.
Savvy app designers can also reverse the data structure, allowing you to keep all of your identifiable info on your phone and only manipulating it on your device. This means you hold onto your data, even while it’s powering the same processes and decisions it always has.
10. CHAOS. SO MUCH CHAOS.
“May you live in interesting times.”
While these are six words no one wants to hear, we do live in interesting times. The U.S. is politically divided in ways it hasn’t seen for generations, the EU is struggling to hold onto its states, and—despite living in the world’s most advanced global society—almost every continent is engaged in some sort of war.
It’s nice to think that 2018 is going to be the year we sort all this out, but that’s just not going to happen. If anything, more chaos is going to descend. Aliens are going to buzz the tower (NSFW: language) and cause us to slop our collective coffee all over the place.
WHAT YOU CAN DO
All you can do is be flexible and positive. Roll with the inevitable punches and make sure everyone who works for or with you is safe. It’s crazy out there—bring a friend.
YOUR PREDICTIONS FOR 2018
In 2018, we’ll see a little more of the same, some new directions here and there, and consumers realizing the power they wield.
What do you think we’ll see? Is Amazon going to start selling software? Will the NASDAQ crash? Is bitcoin ever going to collapse? Share your predictions for the coming year in the comments below, or shoot me an email and let me know where you stand on 2018’s trends.
Article by Andrew Marder in Knocking Down Doors