Small Business News: 28 April 2023

This week’s SBN round-up includes news of a new IT tool specifically for small businesses, the launch of Apple’s buy now, pay later feature, and some interesting insights into how people shop for beauty products.

Online fashion company Zalando is set to launch a fashion assistant tool powered by ChatGPT, across its digital platforms¹. The technology will enable customers to ask questions and will then answer with relevant fashion suggestions. Initially, the tool will be available to selected customers in Germany, Ireland, the UK and Austria.

To give an idea of its capabilities, Zalando used the example of a customer asking, “What should I wear for a wedding in Santorini in July?”. The fashion assistant will understand the formal nature of the event and what the weather is likely to be in Santorini at the time, and will offer recommendations accordingly.

In the future, this could be combined with customer preferences, such as their favorite brands and whether items are available in their sizes, making recommendations more personalized.

Zalando’s VP of personalization and recommendations, Tian Su, commented:

“This is just the beginning; we are committed to understanding our customers’ needs and preferences even better, and we are eager to explore the potential that ChatGPT can bring to their shopping journey.”

If your company has fewer than 200 employees, the chances are you don’t have an IT manager. Most firms of this size either outsource IT or more tech-savvy staff members try to fix minor problems in a disorganized, ad hoc way. And it’s usually up to HR to ensure new starters are set up with everything they need, and deal with all the admin involved. Sound familiar?

If so, you may be happy to hear that French startup Primo has built a software product that handles the needs of small and medium companies².

Primo has four modules designed to speed up and rationalize IT tasks. Firstly, it simplifies how you manage laptops and other devices: rather than ordering from different websites and updating a spreadsheet, users order from the Primo dashboard. Secondly, it helps you manage devices remotely, for example, locking the laptop display after five minutes and enabling automatic updates. Thirdly, it has a security module with Next-Generation Anti-virus solutions (NGAV) and end-point detection and response (EDR). And finally, it offers support services, such as handling all repairs and loaning replacement devices in the event of a theft, with some insurance included.

Primo also aims to handle software IT, although this isn’t live yet. Its whole focus is to make IT easy and simple for small companies – which can only be great news! 

American Gen Zers with a taste for high-end fashion aren’t letting the cost-of-living crisis hold them back. Instead, many are living at home with their parents while turning to second-hand shops and resale platforms for luxury items at affordable prices³.

A recent report by ThredUp, an online thrift store and retail platform, found that about 30% of American Gen Zers are buying luxury brand apparel second-hand. Value for money is the number one driver, while sustainability is also a significant factor.

The report also revealed that two in five items in a US Gen Z wardrobe are pre-owned and that 64% of Gen Zers look for an item second hand before buying it new. 80% considered the resale value of a fashion item before buying it.

More significant still, the second-hand trend in the USA stretches well beyond Gen Z. Americans bought 1.4 billion pieces of apparel second-hand rather than new in 2022, an increase of 40% on the previous year.

The economic slowdown is clearly having a major impact on people’s preferences and their fashion-buying behavior. Younger shoppers especially appear to be increasingly looking for investment pieces – the opposite of the previous ‘fast fashion’ buying mentality.

Apple has launched a Buy Now, Pay Later (BNPL) feature: Apple Pay Later⁴. The feature, which is only available on iPhones and iPads, puts Apple in competition with specialist BNPL companies such as Klarna and Affirm.

Apple is beginning the rollout of Pay Later in the US. It will provide applicants with loans from $50 to $1,000 for online purchases made using Apple Pay. Users can pay in four instalments spread across six weeks, with no interest or fees. They can track and manage loans within Apple Wallet, and payment reminders are sent through notifications.

The Pay Later program will be handled by a new Apple subsidiary, Apple Financing LLC, which is responsible for credit assessment and lending. With over 85% of US businesses accepting Apple Pay and an estimated 45 million Americans using the service, Apple has instantly made BNPL even more accessible to people who weren’t previously using it.

While the launch comes against a backdrop of record levels of household debt and regulators flagging the lack of BNPL oversight, it remains to be seen whether Apple will introduce extra safeguards to help customers avoid getting into bad debt.

In a survey of over 1,000 online beauty shoppers, Digital Commerce 360 and Bizrate Insights uncovered some interesting differences in behavior according to gender and age⁵. For the purposes of the survey, beauty products included cosmetics, skincare and haircare.

Possibly the most surprising take-out is that men buy beauty products online more frequently than women. Less surprising is that younger shoppers do so more often, with 21% of respondents aged between 18 and 29 buying daily.

There are also distinct differences in the reasons shoppers go online. Younger shoppers go online to learn about different products but, once they have decided what to purchase, they are almost as likely to buy it from a brick-and-mortar store. Older shoppers, on the other hand, usually go online simply to replenish their tried and trusted products.

When shopping online, younger shoppers focus more on product detail. They want information on the ingredients, on whether a product is vegan or cruelty-free, and plenty of product imagery. They also favor web tools, such as the ability to profile their beauty needs, and color-matching tools. Older shoppers are more interested in product availability.

Men and younger shoppers are more likely to connect with a retailer, to ask a question for example, and are more likely to use augmented reality or virtual reality. And younger shoppers are also more influenced by social media – and men more than women.

Women prefer to visit brick-and-mortar stores to test products and take advantage of in-store promotions or, at the very least, save on shipping costs, while younger shoppers put more trust in the product when buying it in person.

One final finding that some might find surprising: men are more interested than women in a brand’s stance on social and political issues, including fair trade, charitable giving, diversity and sustainability, as well as the brand story.