The year 2024 will bring many uncertainties and challenges for small businesses. Will the pressures they face get better or worse?
Businesses also wonder how consumer behaviour will change – will people be cautious with their money or spend less? In 2023, there was a lot of focus on Artificial Intelligence. What new and exciting innovations will come in 2024? SMEs have a tough time finding their place and competing against bigger, more established companies. One big question is whether businesses should focus on getting new customers or keeping the ones they already have. Policy also plays a big role in the challenges small businesses face.
Our experts are here to provide insights and a roadmap for navigating the ever-changing business world.
Andrew Fraser, Managing Director APAC, Lightspeed
“When it comes to the economic landscape – and its impact on consumer spending and small business – the only certainty has been uncertainty. After 12 interest rate hikes in 13 months, four successive ‘holds’ from July to October had many economists feeling optimistic about an easing of pressure. However, a further rate hike in November has created more uncertainty for Australia’s small businesses. For all the economic instability, our small business community is resilient, innovative and diverse. As they have done so often in recent years, they’ll treat 2024 as an opportunity rather than a challenge. Indeed, that is the sentiment we’re hearing from numerous Lightspeed customers across the country.
“Opportunities must be pursued, not waited for though. Businesses must be able to answer questions like: Do I understand complex and evolving customer behaviours? What am I selling, and how should I sell it? How can I attract customers? What differentiates my business from a competitor? How can I elevate my customer experience? They sound like straightforward, even obvious, questions. However, their answers enable businesses to develop sound fundamentals, create short- and long-term strategies and build relationships with Australians who – while still cautious – remain fiercely strong supporters of ‘local’.”
Paul Hadida, General Manager APAC, SevenRooms
“In a competitive market with high interest and inflation, low consumer confidence, and much uncertainty, it’s easy for businesses to think that reinventing the wheel will drive success in 2024. Instead, we expect businesses that go back to basics – and do them brilliantly – to achieve strong and sustainable success. Doing the basics well doesn’t mean providing a basic service, but instead using fantastic fundamentals as the foundation to provide the services that consumers are drawn to. The ability to do so rests in data. Businesses possess a wealth of approved customer data, that holds the key to understanding both their customers’ habits and preference and their own internal operations.
“Many are still failing to utilise this data, but those that do can use it to tailor their experiences to identify what their customers want, like targeting them with personalised marketing and promoting their most popular dishes at a restaurant. Secondly, to drive more internal efficiencies, like automated marketing and creating strategic rosters based on the volume of reservations or orders on any given day. Customers don’t necessarily want the metaverse or robot employees, they want businesses who understand them, that provide consistently excellent experiences and are convenient, consistent, and memorable to deal with. Doing the basics well will be the hallmark of success in 2024.”
Rob Hango-Zada, Co-Founder and Co-CEO, Shippit
“For decades retention vs acquisition has been a debate that divides business analysts, companies and entire industries. Today, it’s not as simple as one or the other, though. No single company can take its eye off either – it must encourage and invest in both retention and acquisition to navigate uncertain times. However, there should be disproportionate focus on retention. Data suggests that it’s 70% cheaper to grow through retention than it is via acquisition. Retention also helps to drive acquisition because happy customers don’t just reward businesses with their loyalty, they reward businesses with their advocacy amongst friends, family and colleagues. Speed and reliability are the most impactful CAC (Customer Acquisition Cost) drivers today. Irrespective of their industry, the businesses that deliver faster and more reliable experiences – which, ultimately, is what consumers demand today – will be able to command a strong share of the full market growth potential in 2024 and beyond.”
Vijay Sundaram, Chief Strategy Officer, Zoho
“In 2024, businesses must give data privacy the attention and investment it deserves, both to build trust with their customers and to adhere to growing regulatory requirements. Generating money from user data is easy and high margin, and many companies justify the sale or sharing of it to ‘improve customer experience’. However, for so long there has been little obligation to protect user privacy. Following a period of high-profile privacy breaches in Australia, though, policymakers are consulting on extending the jurisdiction of The Privacy Act, which could see millions of small businesses liable for fines and penalties for non-compliance.
“As a result, small businesses are beginning to increase their awareness of and investment in their privacy protections. According to Zoho research, a quarter of Australia’s two-and-a-half million small and medium businesses (SMBs) would not survive the financial and reputational damage of a privacy breach. However, in the wake of high-profile breaches and extension of The Privacy Act, almost half ranked data privacy as their top business priority, while one in three ranked it as important. While by no means the only challenge businesses will face in 2024, data privacy is set to be one of the biggest focuses; not only for businesses, but their customers.”
Anna Lee-Renwick, Co-Founder and Chief Product Officer, Anni
“Increasingly, we’re seeing consumer choices reflecting an interaction of values, self-perception, and practicality. While consumers are open to investing in their purchases, they are increasingly selective of where they spend their money resulting in an elongated consideration or pre-purchase journeys. Given the current cost of living pressure, its understandable consumers want to be sure any product or service they’re going to spend their hard earned money on aligns with their ideals and addresses their fundamental needs. However, there are competing priorities that have been growing in priority. For example, recent research by Anni found Aussies turn to social media for advice because they believe it would be expensive (29%), they have difficulty finding experts (27%) and due to embarrassment at face-to-face appointments (17%). While customers may be more considerate with their purchases heading into 2024, it’s important to understand your consumer pain points, and the USP of your product or service to ensure you’re targeting your audience with the messages that will resonate with their values, perception and needs.”
Jamie Hoey, Australian General Manager, Wunderkind
“As economic pressures persist, consumers are looking to prioritise where their hard earned cash is spent. And as consumer spending drops, business spending tends to reflect the drop in activity. No matter what industry you’re in, it’s no secret customer retention is going to be far more cost effective and straightforward than acquiring new customers. But this doesn’t mean businesses should rest on their laurels. Instead, brands and retailers must employ a disciplined, data-driven resolve to truly understand their customers, make more informed decisions and ultimately, maximise the most important outcomes.
“Consider whether your current strategies and channels are effective for, and sensitive to, the current environment. This means ensuring all content is reflective of what your customers are experiencing and positioning your brand appropriately. This is why it’s crucial to build owned channels, leverage first-party data and allow customer identity solutions to help fuel personalisation strategies by empowering your marketing teams to recognise customers and understand their wants and needs at every touchpoint.Focusing on doing more with what you have is going to capitalise on your market share, build loyalty, and prime your customers to be ready to re-engage in the inevitable market upturn.”
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