ANZ small businesses show strong confidence despite AI concerns

Small and medium-sized businesses across Australia and New Zealand are approaching the holiday shopping season with a high level of economic confidence compared to business owners in other regions, despite ongoing financial pressures and uncertainties about the use of artificial intelligence (AI) in marketing.

Economic sentiment

A majority of SMBs within the region reported confidence in the economy as the year draws to a close. According to recent survey results, 67 per cent said they were somewhat or very confident, marking the highest level among the surveyed regions, which included the US, UK, and Canada.

Key concerns remain, however. The most frequently cited financial pressures are the rising cost of goods (reported by 50 per cent), cash flow unpredictability (41 per cent), and revenue decline (27 per cent).

"We're heading into a busy period and, while owners are confident, it's vital that shoppers and customers across the region continue to support their local small businesses when they can, even during Black Friday, Cyber Monday and Boxing Day sales," said Renee Chaplin, VP Asia Pacific, Constant Contact.

Business priorities

When asked about top priorities, 64 per cent of ANZ-based SMBs highlighted increasing revenue, while 56 per cent are focused on expanding their customer base. The data suggests businesses are focused on stability and growth while managing day-to-day challenges such as staff shortages and resource constraints.

"Yet despite their confidence, the same challenges remain for SMB owners in Australia and New Zealand; they're often short on time, wearing multiple hats and pushing vital business functions to the backburner, such as marketing," said Chaplin.

AI adoption

The integration of artificial intelligence into marketing efforts is becoming more widespread among SMBs in Australia and New Zealand. Around 15 per cent of respondents use AI tools such as writing assistants, image generators, data analysis software, and reporting features regularly. Another 35 per cent are using them but still learning, while 30 per cent plan to do so.

Efficiency was cited as the main driver to adopt AI-powered tools by 35 per cent of respondents, a higher figure than in other surveyed regions. The most common uses for these technologies include writing emails, subject lines, or social media posts (44 per cent), followed by creating images or visual content (33 per cent).

Despite this, significant reservations persist. Twenty-nine per cent of respondents do not feel confident in their understanding of how to use AI effectively, and 33 per cent express concerns about data privacy and security. Others worry about the reliability of AI-generated results (26 per cent) and potential legal or copyright issues (26 per cent).

"AI tools can help, but while half of small businesses are using it to make their lives easier, the other half isn't yet, and concerns about proper use and data security seem to be hindering uptake," said Chaplin.

Website search impacts

Globally, many small businesses have observed changes in website search traffic as a result of AI technologies. In Australia and New Zealand, 26 per cent of SMBs are actively working to optimise their sites for AI-driven search tools, a figure that aligns with the UK (27 per cent) and is higher than Canada (22 per cent) and the US (17 per cent).

Preparedness for uncertainty

The survey also examined SMBs' preparedness for further economic or operational disruption. Thirty per cent said global economic challenges, such as inflation and tariffs, had a somewhat negative effect, but 68 per cent felt 'somewhat prepared' to adapt to future changes. Twelve per cent described themselves as 'very prepared'.

Chaplin commented, "Small businesses across the region have faced a number of challenges in the past few years, and really, since the pandemic. But these challenges have created incredibly resilient business owners and operators, and the data shows they're now more prepared for economic disruption than any other polled region."