We’re closing out the summer months. With heatwave after heatwave beating down every corner of the country, we’re all ready for some crisp fall weather. While the US is showing signs of a rapidly recovering economy, we’re outlining six trends we’re seeing, and the data that supports them, as businesses close out summer and prepare for a crazy end to another crazy year.
Consumer spending is up, but still rocky
A consumer survey released at the beginning of summer predicted that 48% of consumers would spend more this summer than they did last summer, while 37% reported they would be spending on big-ticket items like cars and vacations. They did not disappoint. Consumer spending outpaced expectations, but this wasn’t always for the good of every company. Customer retention is going to be a major push for companies as we head into the holiday season. Many companies are reporting that, though they saw spending increase, their customer retention decreased as people switched from brand to brand.
Supply chains have not yet recovered
COVID-19 taught us a lot about our supply chains, and the blockage of the Suez Canal and various port delays and closures in China have taught us even more. From appliance shortages to microchip scarcities, the whole world was halted with a slight delay. Though we all dealt with the great toilet paper shortage of April 2020, we didn’t expect our supply chain to break down just as much as it did nearly a year later. According to RetailNext, 28% of businesses experienced shortages and out-of-stock issues. Lumber prices went to an all-time high in May of 2021 as inventory decreased while construction increased after a brief respite. The inflated lumber costs broke in July as on-hand supply began to creep back up. Home appliances have been running at an average four-month delay. While some industries are beginning to show signs of recovery in the supply chain, others are still facing issues. It’s going to take some time to calculate the full effect these breakdowns and shortages have had on the global economy. One thing is for certain: our supply chains are fragile and can be heavily impacted by just about anything these days.
The “from home” mentality is alive and well
Yes, things are opening up all around the country. While we’re not here to focus on the politics behind decisions to open up, most consumers are still hesitant to go back to pre-pandemic normals. With that in mind, the “from home” lifestyle is thriving. Businesses are working hard to adjust to this new permanent aspect of daily life. Where some companies used to invest in gym memberships, they’re now opting to shift to digital memberships for at-home workout systems like Peloton. Additionally, more companies are reporting they plan to adapt to hybrid work situations and are putting in place new technologies that allow them to manage their workforce remotely on a more permanent basis. Project management software like Asana and Teamwork have reported extreme growth year of year, with the latter reporting a 61% increase in their first quarter of 2021. This trend is accelerating as we close out the summer months and the Delta variant is keeping people working from home. Co-working spaces are seeing a sharp decline, though traditional commercial real estate is holding steady, with some markets even posting moderate growth.
Businesses are bracing for impact
As we mentioned before, the Delta variant has a crippling hold on the US and doesn’t seem to be letting up anytime soon. With more people moving indoors as cooler weather begins to roll in (or maybe not, according to the Almanac), COVID is sure to have an effect on businesses, and they’re bracing for impact on what this means for holiday sales. With around 50% of consumers shopping online from their mobile devices, businesses are making an effort to enhance user experiences on mobile devices. There are already over 1.96 million apps available on the Apple App Store, according to BuildFire. This number is expected to increase as more businesses move to apps and electronic community-building to keep their customers engaged and increasing spending with their brand.
Automation is here to stay
Businesses are starting to realize that automation is here to stay and adoption of automation technology is at an all-time high. According to PwC, 54% of executives report that automation and AI have increased their team’s productivity. Businesses are learning that automation of routine tasks is clearing up the workday and increasing job satisfaction. With associates able to focus more on strategy and implementation, routine tasks are automated and cut down on the brain-drain of monotonous projects. Businesses are expected to spend over $1.6 billion on automation projects in the next 5 years, and it’s going to impact all areas of the business. Automation doesn’t just apply to operations. It will continue to be applied to human resources, sales, marketing, customer service, and finance.
Digital Transformation is at the top of everyone’s list
Businesses are making a big focus on alignment as they close out the summer of 2021. If the last 18 months have taught us anything, it’s that companies lose a lot of money if their teams aren’t aligned toward common goals. The largest (and some would argue the most important) of these is Revenue Operations (RevOps), or the alignment of all departments toward revenue-increasing opportunities. Businesses that utilized RevOps saw a 10 to 20% increase in sales, according to a study by Boston Consulting Group. Additionally, companies are investing in additional reporting and analytics tools to help reduce redundancy costs. In fact, recent research shows that bad data is costing businesses a collective $600 billion a year.
2021 has been a wild ride thus far and Q4 promises to be an interesting end to an interesting year. We’re tracking major business trends and the data behind them as they develop. While we all begin to look forward to finishing strong, now’s the perfect time to invest in a digital transformation of your own.