What is your 2022 business strategy?
Much like 2020, this year has been a wild ride. We have seen Covid variants, a blazing-hot labor market, huge consumer demand, and supply chain delays and shortages. The end of the year signals budget time and the season to reassess upcoming trends, develop new goals, and find the best forecasting tools to tackle the new year’s challenges successfully.
Organizations are experiencing swift changes across all sectors; this will continue in 2022. Climate change, inflation, and continued logistic delays force businesses to adapt and be more flexible to meet the rapidly evolving conditions. Here are seven significant trends winning organizations are preparing for in the upcoming year.
Hybrid—Offices, Marketing Events, and Customer Experience
The pandemic’s “work from home” experiment proved that employees could work productively and profitably without sacrificing quality. Now hybrid offices are ‘business as usual’, with no signs of reversal. Some employees prefer to go in, others wish to stay home, and many want a hybrid.
Younger employees expect this model since they appreciate the convenience and know no other work situation. While remote offices may reduce property and asset expenses, technology planning and facility coordination still require effort. Organizations that offer a hybrid with accelerated technology for remote work and modern, inclusive offices will attract the most desirable candidates and retain them for longer.
Industry and marketing events also have moved to virtual or hybrid models. Many tradeshows and associations had moved events online, out of necessity. Event organizers struggled to discover the perfect virtual event platform beyond the typical video conferencing. Yet, they tried to understand what would be most beneficial for their members and customers.
Attendees’ expectations grew regarding these experiences, anticipating a more robust virtual environment. There were mixed sentiments for all involved because while events and tradeshow costs were reduced dramatically, many missed the in-person interface. Hosting virtual and limited in-person attendance will help associations and businesses maximize revenue, reduce travel costs, and increase overall attendance.
Customer experience is shifting with the times too. Online ordering and service contact centers now play a massive role in how customers perceive a brand. Hybrid in this space means any combination of brick-and-mortar stores, e-commerce, and customer service with human or artificial intelligence (AI) interactions.
For example, if customers are on hold for long periods or service agents cannot solve the issues, those customers likely will not be as loyal. AI technology was supposed to fix these problems, but unfortunately, it has its issues. People sometimes have trouble navigating AI menus that do not include all options, or voice recognition fails, causing frustration. Therefore, a balance between humans and automation may be what’s needed.
Artificial Intelligence—to Replace Humans
AI chatbots are being employed more and more. While the initial response may have been less than favorable, AI uses natural language processing (NPL), which allows bots to learn and understand human output and predict the desired responses. One application that may grow in 2022 is tone analysis, which can determine if customers are satisfied or frustrated, and if agents are polite and sympathetic. An application like this can help companies respond to customers appropriately at scale.
Additionally, service call centers process large call volumes related to simple support queries. Processing these simple requests hinders employees from focusing on more complex tickets. AI frees up human service center staff to focus on more complicated matters that AI cannot confront. These newer technologies are projected to add to the global economy and recover a large amount of human worker productivity. This amounts to substantial cost savings.
Other sectors ripe for AI disruption include food & beverage and transportation & logistics. Robots are starting to automate many processes in restaurants. This trend is likely to quickly evolve as labor shortages continue. For transportation & logistics, AI is not a new conversation to be having. Analytics insights having been propelling this sector forward for some time. However, a new trend on the horizon is “truck-as-a-service” (TaaS), defined by Frost & Sullivan. It’s estimated that the TaaS market will climb exponentially through 2025, adding approximately $20 billion to the market size.
Employees’ Evolving Needs
This has been a tough year to attract new employees. We’ve had one of the hottest labor markets, and U.S. jobless claims have fallen to the lowest level in 52 years. It is not only the market and consumers who have changed their courses in the past year, but employees also have undergone tremendous changes. Quality of Life (QoL) has taken enormous precedence over large salaries or fancy office digs. Trying to push employees to re-transition into the way things were before Covid may be the worst idea ever. Employees don’t want to be forced into giving up remote work or flexibility. In fact, according to Harvard Business Review, “more than 40% of U.S. employees would start looking for another job or quit if ordered to return to the office full-time.”
More agile strategies, which include a more flexible workweek, fewer cubicles, increased remote work, and even contract work possibilities—considering the gig economy, will make your business more in line with current expectations. Finding ways to make your structure less hierarchical and flatter may also promote a more positive, flexible business model.
Work is changing. Now, a more prominent, more effective, more educated freelance worker is available. Everything is perspective. So, it may be prudent to consider contract or freelance workers because it will simplify any pivots, reduce overall costs, and increase fresh perspectives.
Increased transparency, sustainability, diversity & inclusion, and acting locally are all part and parcel of corporate responsibility as is defined in 2022. Understanding what is “under the hood” has become commonplace for consumers and employees. Online, instantaneous information has made this the norm. Businesses need to seek ways to eradicate or decrease the environmental costs of running the business and make it well-known to customers.
Electronic vehicles and other ways to decarbonize the supply chain are excellent ways to start. The most forward-looking businesses go beyond the supply chain to be even more resilient in the long run. Ignoring sustainability in this age of conscious consumption will not play well.
According to VentureBeat, “Organizations across industries are making diversity, equity, and inclusion (DE&I) a priority – with 79% planning to allocate more budget and resources in 2022.” As McKinsey reports, DE&I is a no-brainer business proposition. It makes companies more robust and profitable.
Lastly, ‘local’ ties into sustainability as businesses look for more supply options closer to operations. Local sourcing can reduce pricing, decrease carbon emissions, create more control, and benefit the community. All of this will be well-appreciated by customers and employees and give reason to be loyal to the organization.
Companies need to consider at least a 3.9% pay increase based on current trends for employees. Compensation growth has increased significantly since this is the tightest labor market in recent history. Pricing for employees’ larger ticket items such as housing, rent, and food has increased significantly. Organizations must balance the tight labor market and health uncertainty from the Covid variants to attract and retain needed workers.
According to JPMorgan Chase, “Strong inflationary pressures could persist through the first part of 2022, only to ease as the economy moves back into equilibrium.” Other sources report encouraging news that shipping bottlenecks have eased already. This should help a bit with the cost of goods.
Yet, demand may continue to outweigh supply as the ratio of disposable income to household net worth is nearing a record high. While supply chain disruption is slowly easing, labor shortages persist. If Covid complexities decrease, the labor market should rebound and supply chain concerns should naturally resolve.
Inflation and pricing will be top-of-mind heading into the new year.
Think Global, Stay Local
The world is continuously flattening, but not in the literal sense. Due to technological advances, it is much easier to communicate and do business across borders. In 2022, do not ditch your local operations for business horizons abroad, but set your sights on international expansion to see where you can gain share.
Moving your business global allows you to diversify your markets, making your revenue sources more stable. Even when domestic business slows, which can happen, you will not take as large of a hit.
Global thinking also makes you consider adjacent markets and white space that you may fill quickly. While it may be challenging to design a global work culture, multinational companies have a more diverse and informed employee pool. All the while, remember to keep your local communities in mind. Donating and participating locally goes a long way to creating loyal, dedicated customers and employees.
Forecast Frequently, Revise When Necessary
Putting aside budget dollars for market research and consulting is vital when preparing for an unprecedented year. Post-Covid, or what we suspect will be post-Covid, which is tough to predict, is bound to be better than last. Let’s face it; we don’t have enough recent data to help us foresee the fallout. Many experts who projected the economic outlook last year were wrong, or at least, certainly not on target.
Future trajectory is all about watching vigilantly and consistently asking your stakeholders what they expect in the next few months. This means that over time, deep and constant qualitative and quantitative market research equals better intelligence overall. The ability to pivot and adapt as a business means using ongoing industry intelligence as much as possible.
With a fast-moving target, continuous updates and feedback are required for developing strategic plans. Far too many organizations were too slow with the uptake when it came to Covid. Waiting for trends to appear may put your organization way behind the competition.
One thing CEOs across sectors can agree on at this point is more volatility. Companies looking to go back to the way things were will lose ground. To grow in 2022, your organization should focus on:
- Building an innovative and empathetic customer experience
- Fully understanding your market position
For assistance with informing your business strategy, contact us.