Shifting Demographics Have Brands Going Big To Serve Small Business

Four years after the global pandemic set off the Great Resignation and a chain reaction of expanding opportunities in the gig and creator economies, interest in entrepreneurialism continues to swell, with the U.S. Census Bureau reporting a record-breaking 5.5 million new business applications filed in 2023. This trend will continue up and to the right!

As a developer of entrepreneurial-innovation and technology, I am fascinated by what the next decade holds for this critical growth sector of our economy as it undergoes dramatic shifts in demographics, business models and capabilities.

While Generation X and Baby Boomers tend to own most small-medium size businesses (SMB’s) today, data indicates younger and more diverse cohorts are flocking to entrepreneurialism, where the average age to start a business is 35 years old and Black women make up the fastest growing group of entrepreneurs.

Unlike FedEx’s (FDX) company owned location strategy, UPS (UPS) went heavy on the franchise route with their stores, so they are very in tune with the SMB entrepreneurial movement—as that audience is both their customers and franchisee partners.

I caught up with Sarah Casalan Bittle, president of The UPS Store, Inc., who had some on point insights into how they are seizing these entrepreneurial trends. “Today’s SMB owner looks dramatically different from 10 years ago. We see this in our customers and franchise network, and we are constantly working to show up in new, unexpected and relevant ways for our franchisees and the fellow entrepreneurs they serve.”

A recent surveys suggest 65% of currently working Gen Z members hope to start a business one day. And franchising could be one path to get there. According to the International Franchise Association, 31% of franchise businesses are minority owned, compared with 19% of nonfranchise businesses, a trend reflected in models like The UPS Store. The entrepreneurial franchisee movement is growing across sectors, from shipping, restoration, and pest control to lifestyle, health, wellness, and food.

I talked with John Peyton, CEO, Dine Brands Global (DIN), the $8B 3500 location restaurant franchise group, that owns Applebee’s, IHOP and Fuzzy’s, who is bullish on the sector’s growth prospects. “We’ve made the unique decision at Dine Brands to keep nearly 100% of our restaurants franchisee owned and operated, providing a platform for aspiring entrepreneurs to achieve the American dream.” He added, “Franchising is not only an entrepreneurial engine for growth and jobs but offers a compelling opportunity to combine innovation with proven business practices, giving guests new ways to connect with brands they know and love.”

Activating Next-Gen Customers And Partners

With GenZ as both customers and potential future partners, UPS is reaching out to them in big and creative ways. One way to go big is to activate the world’s largest LED screen—yep the iconic Las Vegas Sphere—is the latest way the 40-year-old brand has turned to unexpected and big places to reach small business.[SS1]

The UPS Store created a larger-than-life storytelling experience for consumers inspired by the company’s Be Unstoppable campaign. Eye-popping animations took viewers on a journey celebrating how its network of over 5,300 stores help small businesses achieve their dreams and reach customers everywhere, with the ability to carefully package any object and ship it all over the world. among other tactics.

On Mother’s Day, UPS and The UPS Store rolled out an LED-rigged UPS package car in Austin as a mobile billboard for “mom-owned” businesses, and last fall, the two brands implemented an award-winning, interactive 3D billboard in Times Square, showcasing small business owners and the largest virtual package delivery in Times Square history.

They have amplified these epic campaigns across social media by leveraging social influencers—and it seems to be working. And, as digital out-of-home marketing platforms become more apparent, such transformative activations could point the way for reaching Generation Z in today’s competitive short attention span economy.

Back To The Future With Local Ecommerce

Similar to footprints of Walgreens (WBA) and CVS (CVS), UPS has stores within 10 miles of more than 85% of the U.S. population. That SMB and consumer footprint is proving to be a powerful platform, as instant shipping (and returns) continues to fuel America’s Amazon era shopping addictions. Approximately 350 billion packages shipped last year—projected to hit 500 billion worldwide by 2028. And in this brave new tech. enabled shopping revolution, SMB’s and consumers have moved beyond asking ‘what day’ will my package arrive to expecting real-time tracking with exact arrival times and proof of delivery.

“E-commerce, technology and the gig economy has expanded opportunities for entrepreneurial innovation,” said Bittle. “That’s why The UPS Store is continuing to show up in fresh and supportive ways, whether that’s through breakthrough brand content like with Sphere, the expansion of nontraditional locations inside universities and military bases, or initiatives like our Diversity Ownership Program and ‘Start Small, Grow Big’ program benefitting Junior Achievement USA.”

Leveraging Technology Competitiveness

Technology helps to make entrepreneurship to achieve more with less time and money. With the advent of social media pay-for-click advertising, reaching desired target markets with personalized messaging also becomes more accessible and budget-friendly to budding small businesses.

Rapid advancements in AI, changing platforms and evolving audience preferences also signal more innovations and opportunities ahead as companies evolve their offerings to serve them, like AI enabled shopping and a long list of AI SMB tools that continue to be a bit overwhelming. SMB’s need help here.

In speaking with GoDaddy, U.S. Independents President Gourav Pani about his focus he said, “We’ve devoted our entire team to assist entrepreneurs and small business owners in leveraging generative AI for their business,” adding, “educating them on these capabilities so they can level up and compete is critical to the success of small businesses.”

With this future-focused strategic mindset, UPS’s Bittle often reflects on the famous Wayne Gretzky quote that some leaders mistakenly hesitate on, you know, skate to where the puck is going! With 500,000 employees in 200 countries the $91B company seems like they are just getting starting—and they have a lot of technology and tools that their franchisees with be able to competitively leverage for customers.

“Technology has and will continue to drive change, but for our franchisees and the small businesses they support, the customer will always be at the center,” she said. “Listening to our customers and adapting is how we remain relevant and elevate the customer experience.”