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10 Leading Business Trends to Watch in 2021

By Roy Rasmussen Reviewed By Mike Lucas
By Roy Rasmussen
By Roy Rasmussen Reviewed By Mike Lucas

What are the major business trends shaping the economy in 2021? 

Here’s a look at ten top trends and how they affect small businesses.

1. The Economy Begins to Bounce Back From COVID-19

The stage for upcoming business trends has been set by COVID-19. The pandemic ravaged the economy in 2020, but economists are cautiously optimistic that 2021 will begin to see a rebound. Certain sectors such as tourism and restaurants were especially hard-hit, but the impact on the overall economy was blunted by a shift to ecommerce, government stimulus COVID-19 relief programs and low interest rates designed to promote business loans.

The economy already began to show signs of recovery by the end of 2020, with real gross domestic product increasing at an annual rate of 33.4% in the third quarter of the year and 4.1% in the final quarter, according to the Commerce Department’s Bureau of Economic Analysis. Now that vaccine rollouts have begun, economists expect continued recovery. The World Bank projects effective rollout of widespread vaccinations will spur a 4% expansion in the global economy in 2021, helping offset a 4.3% contraction in 2020. 

This could be hindered by a resurgence of the pandemic, which could limit expansion to as low as 1.6%, or it could be accelerated by a faster vaccination rollout, which could increase expansion to as much as 5%.

2. Ecommerce Will Continue to Climb

The coming year will see the continued growth of ecommerce trends. Digital sales were already on the rise before the pandemic, which further accelerated ecommerce growth. While overall retail sales fell 3% globally in 2020, retail ecommerce sales grew 27.6% as consumers went online to get what they needed, according to market research company eMarketer.

The rebound of brick-and-mortar retail will slow the growth of ecommerce from its 2020 pace, but digital shopping trends will continue to increase. 

“We forecast that worldwide ecommerce growth will downshift to 14.3% in 2021, partially because of a brick-and-mortar rebound and partially because so much growth was pulled forward to 2020,” eMarketer projects. “We also forecast that overall worldwide retail will rebound to 5.1% growth in 2021.

A laptop screen displays an online shopping cart.

3. Demand for Virtual Services Will Rise

The pandemic increased demand for virtual services, including services previously delivered by brick-and-mortar businesses. While some types of services will revert to a brick-and-mortar model as lockdowns are lifted, others will continue to see increased online demand, the U.S. Chamber of Commerce projects. 

Digital service industries expected to thrive even after the pandemic subsides include:

  • Telehealth
  • Home fitness coaching
  • Grocery delivery
  • Fast-food delivery and pick-up
  • Video gaming
  • Virtual event conferencing
  • Remote work software services
  • Cybersecurity

Rising demand for these types of services will create new market niches for entrepreneurs to fill, making this one of the most important new business trends in the U.S.A. 

4. Alternate Payment Methods Will Increase in Usage

The digital shift prompted by the pandemic accelerated the trend toward payment digitalization by 2 or 3 years, according to business news provider Business Insider. Online sales in the U.S. increased to $794.5 billion in 2020, accounting for a record 14.4% of total retail sales. Increased spending on smartphones helped contribute to this.

Other forms of alternate payments also saw an increase last year. Mobile peer-to-peer payments (payments from one mobile user to another through a smartphone linked to a bank account), digital remittances (cross-border digital money transfers), digital business payments and mobile proximity payments (contactless payments from a smartphone with a digital wallet app) all increased. 

Concerns about the coronavirus increased contactless payments from mobile phones and credit cards, with the number of retailers accepting no-contact payments increasing from 40% to 67% between 2019 and 2020, according to data provided by market research firm Forrester to the National Retail Federation trade association.

5. Infrastructure Will Continue Migrating to the Cloud

Another trend the pandemic has promoted is the migration of business infrastructure to the cloud. In 2017, a survey of 500 global information technology decision-makers by cloud-based infrastructure monitoring provider LogicMonitor found “13% did not think the shift would ever happen, and 62% of respondents thought it would take five years or more for 95% of workloads to run in the cloud.”

When the survey was reconducted in May and June of 2020, 87% now thought that organizations would make this transition, with 74% expecting 95% of workloads to be in the cloud within five years, and 35% of U.S. respondents expecting to see it happen by 2022.

6. The Remote Workforce Will Continue Growing

One of the factors driving businesses to the cloud is the growth of the remote labor force, which increased during the pandemic. The number of workers who spend at least part of their time working remotely has risen gradually from 9% in 1995, according to polling by Gallup. By 2015, it had risen to 37%. Between 2019 and 2020, it rose sharply from 42% to 49%.

By the height of lockdown measures in April of 2021, the number of American workers who were exclusively working remotely had surged to 51%, while the number working remotely sometimes stood at 18%. By October, the number of workers always working remotely had leveled off at 33%, but the number working from home sometimes had climbed to 25%.

The poll found that workers who have experienced remote work would prefer to continue after the pandemic subsides. Nearly two-thirds of workers said they would like to continue working remotely after the pandemic, with 35% saying they want to do so out of preference rather than fear of the coronavirus. These numbers indicate that the trends toward remote work will continue.

Two houses are next to each other. Windows reveal that each home occupant is working remotely.

7. More Workers Will Become Independent Contractors

Another effect the pandemic has had on the labor force is accelerating trends in entrepreneurship promoting the gig economy. The number of workers employed as independent contractors has been increasing steadily since 2002, according to long-term research by the nonprofit Aspen Institute. Between 2010 and 2014, independent contractors accounted for 29.2% of all jobs added to the economy.

The pandemic provided increased impetus to the trend toward independent work. Following the declaration of a national emergency in March 2020, demand for gig work had risen nearly 25% by June, according to surveys by gig job app provider GigSmart. Over the course of 2020, the gig economy grew 33%, according to gig payment provider daVinci Payments. Growth was particularly strong in the retail, restaurant, cleaning, customer service and delivery driver industries.

8. Artificial Intelligence Will Become More Integral to Customer Service

By promoting increased ecommerce, the pandemic has also encouraged adoption of artificial intelligence (AI), which was already on the rise. Following the coronavirus outbreak, 24% of organizations reported increasing their use of AI, according to a survey conducted in September 2020 by market research firm Gartner.

The survey found 75% of respondents planned to continue or start AI initiatives within the next six to nine months. The top applications of AI organizations are pursuing are improving customer experience and retention, revenue growth and cost optimization.

9. 5G Will Accelerate Delivery of Online Services

One of the most important technology trends in business in 2021 will be the advent of 5G networks, which promise download speeds eventually reaching multiple times that of 4G. 

The U.S. rollout of 5G was slowed slightly by the pandemic last year but continued to move forward. By the beginning of 2021, U.S. customers of Verizon, T-Mobile and AT&T were experiencing download speeds in the range of 47 to 58 megabits per second (Mbps), according to research group Opensignal. In some areas, 5G speeds are already 10 times faster than 4G, although this isn’t yet the norm, according to technology review site Tom’s Guide.

At the end of 2020, 5G coverage reached more than a billion people, equivalent to 15% of the world’s population, according to telecommunications provider Ericsson. By 2026, this will increase to 3.5 billion, or 60% of the world’s people. As more consumers and businesses adopt 5G, delivery speeds for online services will accelerate, giving an advantage to companies which are operating at 5G speeds.

10. Virtual Reality Will Impact Business

One byproduct of 5G will be increased business adoption of virtual reality (VR), which consumes significant bandwidth and depends on fast download speeds for practical online use. The delay of 5G rollouts because of the pandemic slowed down anticipated VR growth in 2020, but that will change in 2021, said Patrick Costello, senior director of technology company Qualcomm, during this year’s Consumer Electronics Show.

Verizon executive Erin McPherson expects to see wearable products such as VR glasses and handheld devices making VR mainstream by 2022. One practical business application of VR will be hosting virtual meetings, which have grown in demand since the pandemic began.

Stay on Top of Business Trends for Successful Financial Planning

Keeping up with the latest small business trends can provide you with valuable business intelligence, positioning you to capitalize on emerging opportunities. Ecommerce growth, a shift to virtual business models and infrastructure and the rise of AI and 5G represent some of the most important new business trends in 2021.

Making the most of these emerging trends depends on smart financial planning. Fast Capital 360 helps small businesses with financial planning by facilitating SBA loans and other small business financing options. If you require additional funding to achieve your business goals, take a few minutes to fill out our no-obligation application and find out what types of financing you may pre-qualify for.

Roy Rasmussen Contributing Writer for Fast Capital 360
Roy is a respected, published author on topics including business coaching, small business management and business automation as well as an expert business plan writer and strategist.
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