Small and medium-sized businesses (SMB) have become prominent buyers of technology, more so in the last 5 years.
But what could have possibly led to SMBs’ increased love for technology? Well, many things… out of which the 3Ps i.e. People, Protection, and Performance take the center stage—IT-enabled better collaboration to support remote working models, greater need for safer storage as more transactions move online, and the requirement for scaling up customer experiences, now further fuelled by Artificial Intelligence (AI). Apart from these, availability of solutions with better pricing and better user experiences have definitely played a major role.
All such factors combined, SMBs have become a segment with golden potential for SMB-based software solution providers. And the best part is, SMBs will keep on plowing into technology, and by 2024, their IT spend is expected to reach a gigantic USD1565 billion! (Analysys Mason)
We reviewed some of the most prospering and desirable SMB tech verticals that are currently leading the market.
1 Cyber Security Supporting New-age Infrastructure
An urgent necessity for smartly built cyber security solutions that catered to small and medium businesses emerged a few years back and has been seeing a steady growth since. In fact, SMBs are preferring security solutions with features, like AI, blockchain security, IoT security that will aid in computer forensics. Interestingly, a notable rise in demand for cyber security professionals with ethical hacking and problem-solving skills can be observed since COVID-19, promising a bright future!
The journey from data to more accessible and quality data for higher business efficiency and revenue generation are exposing medium as well as small businesses to data breach threats. And not just threats, as organizations are becoming more and more dependent on cloud services, new methods of cyber crimes, including identity theft, data exploitations, ransomware attacks are causing immeasurable turbulence.
Going by Analysys Mason predictions, cyber security will have a “double-digit growth” this year while other sources project a USD266 billion market size as per revenue by the end of 2027!
2 Digital Marketing: Better Prospecting with AdTech & MarTech Technologies
…the martech space has received outsize attention and grown prolifically to over 8,000 tools in recent years. —Regalix
It’s been long that the competition has spread online, and today almost 70% of American buyers prefer to shop online. To be more specific, 268 million digital buyers existed in the U.S. back in 2022, and the digits are expected to hit 285 million by 2025. (Tidio)
So, what are the top benefits that digital marketing is showering on SMBs?
Customer retention and re-engagement have always been major challenges to SMBs. Moreover, the recent spike in entrepreneurship in the United States is making small to medium-sized businesses even more prone to losing customers, increasing dependence on digital marketing tools to support their revenue acquisition efforts.
Lead conversion has been simplified by digitized methods that allow businesses to track customer behaviors and come up with solid research without moving mountains. Tools like Google Analytics, SEMRush, and Zappi have changed the face of marketing within the SMB space.
A multichannel approach—while 86% marketers have already been using video as a powerful marketing tool, 91% of customers are keen on seeing more online video content from brands (Wyzowl). Coming to social media, Facebook, Instagram, Twitter, Reddit are now widely preferred for building small business foundations.
Cost effectiveness and measurable ROI have surely empowered mass adoption of marketing tech as businesses compete to stay ahead in the game.
Summing up, the key digital marketing trends for SMBs in 2023 will be:
- A prevailing era of AdTech and MarTech for accurate customer targeting, optimal resource allocation, and to attain enterprise-level efficiency.
- Shorter video content or micro ads to achieve higher viewer engagement
- In-game advertising market is growing; by 2027 it will grow by USD5,182 million (Technavio)
3 E-commerce: A Soaring SMB Trend
A Statista survey on U.S. small and medium businesses declares that 66% of their respondents are focusing on e-commerce.
The shifting buying trend from in-store to online and the sales grew 7.7% in 2022 year-over-year in the U.S, reaching USD1.03 trillion in 2022. And by 2027, this online shopping revenue is predicted to exceed USD1.5 trillion.
As per experts, millennials and Gen Z buyers, who are more comfortable with online shopping, have been significant in fuelling this growth. Plus, popular e-commerce platforms, including Shopify, Wix, WooCommerce, Squarespace have made online selling for SMBs a piece of cake!
E-commerce tools have and are largely equipping small businesses and midsize organizations to build their online presence, manage the inventory, operate their payment gateway, web hosting, site designing, and more against reasonable monthly charges.
A collection of marketing notions indicate that the future of e-commerce would flourish in the following ways:
Omnichannel SMB advertising and sales that allows the usage of all digital as well as traditional channels simultaneously, offering similar shopping experiences while expanding customer base and increasing revenue.
Sales through social media platforms are forecast to see a rise. Social commerce deals can generate USD2.9 trillion by 2026.
Voice assistants are going to be more useful. Voice-enabled shopping experiences on e-commerce platforms would deliver better customer experience by skipping page-scrolling effort and time.
More dynamic presentations for product content would add to customer satisfaction. SMBs will be looking for e-commerce platforms with frameworks for in-depth, video, and interactive content.
4 Collaborative Tools: Simplifying Distant Coordinations with Cloud Solutions
Successful deliveries and top-notch coherence at day-to-day operations call for collaboration. As remote working trends gained more popularity, collaborative tools eventually have become essential for SMBs to bring and maintain consistent communication.
Pocket-friendly cloud solutions have made collaboration easy to put into practice for small and midsize organizations. From real-time workflow sharing to storage, video conferencing to notifications—collaborative tools are meeting all such project as well as team management requirements in a hybrid working model.
Data shared by Fortune Business Insights shows, the global team collaboration software market is projected to reach USD41 billion in 2028 at a CAGR of 13.2% in forecast period.
Taking into account several market updates, some of the most favorite collaborative tools of 2023 would be the following in the respective categories:
|Wrike, Trello, monday.com & ClickUp||Project Management|
|Google Meet, Zoom & GoTo||Video Conferencing|
|Dropbox||Secure Cloud Storage|
5 Fintech: An Evolving Superpower Disrupting Financial Institutions
A 2019 EY poll showed, 23% of the SMBs in the U.S. used fintech, and at present, the fintech industry is worth approximately USD179 billion and can touch USD188 billion by the next year.
The last two decades have witnessed a sporadic adoption of digital tools for financial services in businesses to manage and gain insights into finance-related administration. Financial software applications, such as QuickBooks, Intuit, Stripe, Klarna, among others have equipped small to midsize businesses to anticipate incoming and outgoing cash flows, eliminate messy paperwork for expense management, exchange funds with international stakeholders while protecting user data, etc.
The modern fintech firms are giving the traditional financial systems a hard competition in order to provide better and faster services to their users. Processing payments, invoices, managing cash flow within and outside organizations have been made simpler by financial technology.
Looking at the market movements, we have encapsulated the following fintech trends:
Fintechs possess the potential to break the monopoly of fiat banks in sanctioning loans and have enabled small enterprises to obtain quick credit and capital.
Specialist lenders are using peer-to-peer systems, crowdfunding, and many such fintech models to reduce risk and facilitate all credit-related activities.
Blockchain technology has been revolutionary in creating new financial solutions and has removed barriers in different financial transfers.
Fintechs have made biometric authentication one of the most highly sought-after security features. Since the sector is a frequent target to cyber criminals, fintech businesses are ceaselessly working on increasing security measures that are more user-friendly.
Rising trend in ecommerce has particularly given a massive boost to payments based fintech.
6 HRMS: A Rewarding Ball Game on the SMB Tech Horizon
According to experts, the post-pandemic era is attracting a rising demand for easy-to-install HRMS with enhanced channels for uninterrupted, open communication given the hybrid and remote working models.
Employee engagement and management practices are gaining traction with small businesses amidst growing socio-regulatory requirements toward human resource management, requiring businesses of all sizes to streamline their HR processes. The success of HRMS lies in bringing various HR responsibilities under one umbrella. And that, too, supplemented by rich, visual analytics coupled with innate and individualized user experience.
Leading tech companies, including Oracle, Workday Inc., SAP SE, UKG Inc. have already started developing and delivering improved software products that are in line with the trends and would not require constant system upgrades.
Currently, Keka, BambooHR, Workday HCM, Rippling, Zoho Corporation top the HRMS chart, and the global human resource management market size is expected to grow at 12.8% CAGR from 2022 to 2030. Important to note, the SMB segment has been estimated to register the highest CAGR over the forecast period.
Final takeaway for SMB tech providers—seize the moment!
Artificial Intelligence and Machine Learning: The Future Commanders
Expanding customer expectations and constant development in productivity—these two aspects have possibly been the inspiration to achieve advancements in technology. Today, Artificial Intelligence (AI) is building the blocks of TechBiz verticals while shaping up the future. With an anticipated market value of $733.7 billion by 2027, AI is set to become the next game changer in SMB tech. As AI-enabled tools have become readily available, affordable, and the initial choice for simplifying businesses, SMBs are adopting AR, imaging, and video as mainstream business tools, creating seamless customer experience.
In fact, AI has been streamlining small to midsize businesses with its:
- unparalleled data-driven marketing strategies, driving superior results
- in-depth analysis of buyer behavior, trends, and patterns, giving small businesses a competitive advantage in niche markets
- better personalization in customer relationships to address buyers’ needs more specifically
- market intelligence that allows to unify various data sources, boosting upselling opportunities and help SMBs reduce risks by making smarter business decisions
- Machine Learning (ML), which is a subset of AI, can improve internal collaborations and operations by training software to learn from every interaction
And it’s not just all speculation… countless reports so far have backed the estimations above. A freshly executed survey by Forbes Advisor, published in April 2023, exhibits SMBs’ thriving chemistry with AI.
46% business owners from the survey are using AI for customer relationship management, 40% for inventory management, 35% for content production, 33% for product recommendations, 30% for accounting, 30% for supply chain operations, 24% for audience segmentation, among others.
ChatGPT, a natural language processor, has already taken the internet by storm for its versatility at offering solutions via back-and-forth interactions.
Shortly after ChatGPT’s release in 2022, Sam, OpenAI’s CEO, tweeted, “language interfaces are going to be a big deal, i think. talk to the computer (voice or text) and get what you want, for increasingly complex definitions of “want”! this is an early demo of what’s possible (still a lot of limitations — it’s very much a research release).”
Indeed… conversations have always been the natural way for the human race to exchange thoughts and ideas, and ChatGPT’s ability to understand natural language and its versatility at offering solutions via back-and-forth interactions have made it a popular choice among web-available language models.
97% of the business owners believe ChatGPT will help their business.
Looking at the digits from the Forbes survey, it seems, Sam’s future prophecies are all coming true, in fact, it has opened a window of infinite opportunities.
At present, the SMB tech space is that golden goose that will keep on laying golden eggs, i.e. the recurring revenue for scaling businesses. All it takes is learning the market curves right, implementing them at core business levels, embracing data-driven innovation and automation, and the future will be yours!