At a time when every penny counts, the dynamics of shopper loyalty are shifting in the throes of the cost-of-living crisis. A recent survey of 1,500 online and in-person shoppers, conducted by Tyl by NatWest, reveals the draws and the disconnect between consumers and retailers as they seek the best value in both small boutiques and larger businesses.
Three-quarters of savvy shoppers who shop at both small businesses and large retailers admit that it’s the cost efficiencies that draws them to the retail giants. Yet, interestingly, 38 per cent attribute their loyalty to larger stores due to limited access to smaller shops in their local area.
However, the pull of discounts isn’t always enough as a staggering 68% of respondents confess to struggling to locate an employee to help in bigger shops.
Amidst this retail balancing act, small business owners hold the key to consumer hearts. Personal touches like warm welcomes, complimentary samples and exclusive birthday discounts create a shopping experience that goes ‘above and beyond’. However, small business owners should be aware of the potential pitfalls – pricey shipping, delivery issues and prolonged dispute resolutions can cast a shadow on customer satisfaction.
As the economic climate undergoes constant changes, 44% of shoppers cite the cost-of-living crisis as the primary factor influencing their decision to tighten their purse strings over the next 12 months.
Mike Elliff, CEO at payments provider Tyl by NatWest, said: “The cost-of-living crisis has changed a lot of things, including how and where people shop. This means businesses need to look after their customers better than ever.
“Prioritising customer satisfaction is not just a good business practice, but an essential lifeline for small business growth and survival.
“Business owners have the power to greatly influence consumers even before they have started physically or digitally looking at products and services to purchase. Considered and personal touches can go a long way to positively position a business well in advance of the point of sale.
“Customer loyalty, trust, and word-of-mouth recommendations become invaluable assets, and the businesses that go above and beyond to meet their customers’ needs will not only weather the storm but emerge stronger on the other side.
“In the face of economic uncertainty, fostering meaningful relationships with customers and the community is the key to resilience and long-term success.”
Beyond the price tag, 27% of consumers express a preference for businesses championing sustainability and ethical practices. Locally, almost half (49%) shop with community in mind, while 48% really want to support their small business owners.
A third of respondents (34%) opt for local businesses over their larger counterparts, be it online or in-store. And despite potential higher costs, 26% of shoppers think the economic climate is an opportunity to champion smaller, independent suppliers.
As a response to economic uncertainties, 44% of respondents are actively managing their finances.
More than 25% of shoppers check a small business’s reviews before making a purchase. This underscores the need for SMEs to display reviews to attract customers who rely on them for purchasing decisions.
And, despite the allure of online convenience, 64% prefer the physical shopping experience, enjoying the chance to try before they buy (71%), with 59% eager to carry their goods home immediately.
In this ever-evolving retail world, businesses that find harmony with customer needs, champion sustainability and nurture community connections are poised not just to weather the storm but to secure long-term success.
Alison Edgar, UK business expert and entrepreneur comments: “When the economy is changing, it is easy for people to enter the fight, flight or freeze zone and hide from their problems. But actually, now is the time to make an impact.
“As a small business you have the upper hand of being far more agile than a large organisation, and the ability to bounce back and make and embrace change throughout the business. If you are waiting to start or scale a business, there is no ‘right time’, it never comes.”
Mike Elliff added: “Shopping at small businesses will keep the heart of a community beating.
“It not only supports the livelihood and dreams of locals but also nurtures unique craftsmanship, fosters personal connections, and ensures that every purchase goes the extra mile.”
TOP TEN TOUCHES SHOPPERS WANT FROM A SMALL BUSINESS:
- A warm welcome
- Complimentary samples
- Birthday or anniversary discounts
- Handwritten thank you notes
- Them getting to know their customers on a personal level
- Handmade products
- Personalised loyalty programmes
- Early access to sales or events
- Follow up calls or messages
- Customised packaging
TIPS FOR SMALL BUSINESSES TO GROW THEIR BUSINESS AND RETAIN LOYAL CUSTOMERS:
Top tip 1: Try not to focus on things outside of your control, such as the state of the economy or how much people are willing to spend. Instead remain clear on your business goals and how you react to situations, running your business the way you want to run it.
Top tip 2: The four biggest fears that hold us back are change, rejection, failure and uncertainty – which running a business is wrapped up in. You need to be agile, prepared and ready to bounce back at any time, because every day will be uncertain, but the sign of a strong business is being able to adapt to the times. Tools such as the Tyl portal can help business owners prepare and adapt so you can plan accordingly and stay in control.
Top tip 3: Going above and beyond for your customers can make you stand out in the long run. This can be as simple as getting to know them better so you can welcome them personally, to little extras like offering a coffee with a haircut. In a world where people like to focus on the negatives, find a way to make them leave your businesses with a smile on their face.
