In an era marked by financial caution, the dynamics of shopper loyalty are shifting, particularly in light of the ongoing cost-of-living crisis. A comprehensive survey by Tyl by NatWest offers a deep dive into the changing relationship between consumers and retailers, examining the factors that attract shoppers to both small boutiques and large commercial outlets.
A notable 75% of savvy consumers who frequent both small and large retailers are primarily lured to big-box stores due to cost efficiencies. Intriguingly, 38% of these shoppers say their loyalty to larger retailers stems from limited access to smaller shops in their local area.
However, the appeal of discounts and cost savings isn’t universal. A striking 68% of respondents admit to facing challenges when seeking assistance in larger stores, highlighting a customer service gap.
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On the other end of the spectrum, small businesses seem to have cracked the code to consumer hearts. Personal touches like warm welcomes, complimentary samples, and exclusive birthday discounts contribute to a shopping experience that goes ‘above and beyond.’ However, small retailers should tread carefully; issues like expensive shipping and delayed dispute resolutions can negatively impact customer satisfaction.
As the economic landscape fluctuates, 44% of consumers point to the cost-of-living crisis as the primary reason for tightening their budgets in the upcoming year.
Mike Elliff, CEO at Tyl by NatWest, stated: “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. 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.”
Beyond the price tag, 27% of consumers express a preference for businesses that focus on sustainability and ethical practices. Almost half (49%) shop with community benefits in mind, while 48% are keen to support their local business owners.
A third of the survey respondents (34%) opt for local businesses over their larger counterparts, whether online or in-store. Despite potentially higher costs, 26% see the current economic climate as an opportunity to back smaller, independent vendors.
In response to economic uncertainties, 44% of respondents are actively managing their finances. Over a quarter (25%) of consumers consult reviews of small businesses before making a purchase, emphasizing the importance for small enterprises to showcase customer feedback.
Despite the allure of online convenience, 64% still favor the tactile experience of in-store shopping. They appreciate the ‘try before you buy’ approach (71%) and the instant gratification of taking purchases home immediately (59%).
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
In conclusion, the UK retail sector is in a state of flux, influenced by economic uncertainties and shifting consumer preferences. Yet, businesses that align with customer needs, champion ethical practices, and foster community connections are well-positioned to not just survive but thrive in these challenging times.