Small businesses in Australia and New Zealand are heading into the holiday shopping season with greater financial confidence than those in other regions, despite continuing financial pressures and uncertainty over the use of artificial intelligence (AI) in marketing.
Business sentiment
The majority of small and medium-sized businesses in the region reported feeling confident about the economy as the end of the year approaches. Recent survey results show 67% are somewhat or very confident, the highest level among the regions surveyed, including the US, UK and Canada.
However, important concerns remain. The most frequently cited financial pressures are rising costs of goods (reported by 50%), unpredictability of cash flows (41%), and declining revenues (27%).
“While we are entering a busy season and our owners are confident, it is vital that shoppers and customers across the region continue to support local small businesses wherever possible, even during the Black Friday, Cyber Monday and Boxing Day sales,” said Lenny Chaplin, Vice President, Asia Pacific, Constant Contact.
business priorities
When asked about their top priorities, 64 per cent of ANZ-based SMEs emphasized increasing revenue and 56 per cent focused on expanding their customer base. This data suggests that companies are focused on stability and growth while managing day-to-day challenges such as staff shortages and resource constraints.
“Despite their confidence, small business owners in Australia and New Zealand face the same challenges. They are often time-poor, multi-tasking and put important business functions such as marketing on the backburner,” Mr Chaplin said.
Introduction of AI
The integration of artificial intelligence into marketing activities is becoming more popular among small and medium-sized businesses in Australia and New Zealand. Approximately 15% of respondents regularly use AI tools such as writing assistants, image generators, data analysis software, and reporting capabilities. Another 35% are using but still learning, and 30% plan to learn.
Thirty-five percent of respondents cited efficiency as a key driver for adopting AI-powered tools, which is higher than in any other region surveyed. The most common uses of these technologies include creating emails, subjects, or social media posts (44 percent), followed by creating images or visual content (33 percent).
Nevertheless, significant concerns remain. 29% of respondents are not confident in understanding how to use AI effectively, and 33% express concerns about data privacy and security. Some are concerned about the reliability of AI-generated results (26%) and potential legal or copyright issues (26%).
“AI tools can help, but while half of small businesses are using AI to make their lives easier, the other half are not yet using it. Concerns about proper use and data security appear to be holding back widespread adoption,” Chaplin said.
Impact of website search
Around the world, many small and medium-sized businesses are seeing changes in their website search traffic as a result of AI technology. In Australia and New Zealand, 26% of small businesses are actively optimizing their sites for AI-driven search tools, equal to the UK (27%) and higher than Canada (22%) and the US (17%).
Preparing for uncertainty
The study also looked at small businesses’ preparedness for further economic or operational disruption. While 30% said global economic challenges such as inflation and tariffs were having some negative impact, 68% felt “somewhat prepared” to adapt to future changes. 12% said they were “very prepared.”
Mr Chaplin commented: “Small businesses in the region have faced many challenges in recent years, and in fact since the pandemic. But these challenges have created incredibly resilient business owners and managers, and the data shows they are now better prepared for economic disruption than any other region surveyed.”
