London, UK – Over half of consumers globally (53%) believe it is more important to shop with local businesses now than it was before the pandemic. That’s according to new research released by Pollinate, the global software business that partners with banks to help them deepen and extend relationships with their business customers, in which over 4,500 consumers were surveyed across the UK, US, Australia, and Brazil.
The report, Making Loyalty Work for Small Businesses, which was conducted in February and March 2021, sought to explore how local businesses could more effectively engage with consumers and encourage them to shop locally. It found that although consumers would like to support local businesses, 53% of consumers want them to offer loyalty programs as an incentive to purchase.
The Covid-19 pandemic has led to an increase in support for SMEs from consumers
The extent to which consumers in these different markets believe it is more important varies by country. Brazil tops the charts with considering it more important to support local since the pandemic (65%) vs. the UK as least (46%). Millennials and Gen X are especially supportive of small businesses, with 49% and 47% respectively citing shopping local as “very or extremely important”, and nearly half of all surveyed consumers (45%) having shopped at local businesses in the last 30 days.
The principal drivers behind consumers wanting to support local businesses include reinvesting in local economies (45%), keeping money in the community (44%), and driving job growth in the community (43%).
But supporting local means small businesses must embrace loyalty schemes
Historically, offering loyalty schemes for small businesses has been difficult and expensive, requiring an investment in technology and staff training, while typically not delivering enough value to customers. In fact, while over half of consumers surveyed (53%) want local businesses to offer loyalty programs, a quarter are not interested because they feel they would not get enough value out of such programs for them to be worthwhile. By not offering loyalty schemes, small businesses could be missing out on roughly 277 million shoppers.
Consumers’ demands for loyalty offerings are unsurprising with discounts topping the list as something 70% of consumers desire, followed by cash back (55%) and free products (50%).
Banks are in an ideal position to help SMEs with offering loyalty
The research showed that banks are 2.5x more trusted with consumers’ transactional data than Google, Apple, or Facebook, meaning they are in a unique position with access to a wealth of data to support small businesses with delivering loyalty schemes.
During the pandemic, banks were a key distribution channel for fiscal support for SMEs, but the data banks can provide may be as valuable as the capital. Almost three quarters of consumers (72%) interested in using a local business’ loyalty program trust and want banks (55%) or card networks (45%), such as Mastercard, to deliver them.
Consumers are also interested in loyalty schemes run by the local merchants themselves (59%), creating an ideal partnership opportunity between the banks and their business customers through a payment card-linked loyalty app enabled by banks, and owned by merchants.
Fiona Roach Canning, co-founder at Pollinate said: “Small businesses are at the heart of communities and the economy. It’s incredibly important that they are continued to be supported – especially as they work to rebuild and regenerate through the aftermath of the recent pandemic. Having access to the same tools and assets large retailers have traditionally taken advantage of levels the playing field for small businesses. It will allow them to continue nurturing the personal relationships they are able to build that sets them apart in an up-to-date and digital way.
To read additional insights from the research, as well as further analysis, read the full report: https://bit.ly/2TbwVqz