16th October 2020

UK’s affection for small business greater since COVID-19 says research
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UK’s affection for small business greater since COVID-19
66 per cent of UK consumers pledge to buy more from small firms locally
3 in 4 SME owners recognise the ‘human advantage’ they have over big firms

A new global study has revealed the extent to which the UK values its small businesses, highlighting the depth of goodwill and the strength of society’s dependence on them since COVID-19.

Seven in 10 consumers globally want to support their own local businesses by buying more goods or services from them during the pandemic, according to commissioned research conducted by Forrester Consulting on behalf of Xero, the small business platform.

The study, which defines six emerging themes shared by firms thriving despite challenging conditions, found that three in four UK consumers(75%) feel a personal sense of loss when a small business closes in their community, acknowledging the active role they play in shaping the culture of their local area.

Lockdown has seen communities pull together with acts of kindness, and many small businesses have been at the heart of this spirit. The psychology behind the Eat Out to Help Out scheme not only stems from the public's appetite to save money, but also their willingness to 'do their bit' in supporting businesses.

This was reflected in the study which found that two-thirds of Britons “feel personally responsible to help out” when they see small businesses struggling(66%).

As a result, almost two in five(39%) UK consumers said they shop small to contribute to their local community and 38% due to its convenience. Personal interaction with staff is a key reason for a third of UK consumers(32%) to shop at small businesses.

Savvy small business owners recognise this more than ever. Three quarters(75%) of UK businesses see themselves as having a competitive advantage over large enterprises, and the most popular reason was the personal and emotional connections they have with customers.

Emma Harrington, Director at Manze Pie & Mash in London, comments “Our customers are very loyal to us. In fact, a handful of our regulars are the fifth generation in their family to enjoy our pie and mash. When we had to close in March lots of our customers reached out to us on social media, email and by phone just to check in and see how we were getting on.

We continued to serve takeaways during lockdown and many of our regulars said picking up their food was the highlight of their week. We’ve offered chilled online delivery for 15 years but lockdown was the catalyst for our hot local delivery service too. This was vital for many of our customers who were shielding and couldn’t leave the house, but who still wanted to support us.”

The propensity for small businesses to engage with their customers via digital channels was another emerging theme from the study. In fact, UK small businesses were most likely to use their company website to serve their customers during and post COVID(70%), higher than the global average of 55%.

These findings tally with a shift towards online spending by shoppers. In 2019, 39% of UK consumers purchased online, which increased to 57% during COVID-19.

While the pandemic has piled on the pressure for bricks-and-mortar retailers, the report suggests the future is hopeful based on consumers’ growing affection for their local businesses.

Seven in 10(66%) shoppers globally said they actively want to buy more goods from small businesses in their local community as a result of the pandemic, while more than 41% of UK consumers said they expect to spend more with them post-COVID.

Gary Turner, Managing Director at Xero, added "The most important mindset for all businesses in the next six months is not dwell on what you can't do, the support you can't get, or the incredibly hard decisions you have to make. Focus on what you can do, and do it fast. While goodwill towards small businesses is growing, they need to tap into community-mindedness and the digital tools that can help them to evolve. It is vital that small businesses make the most of digital services to expand, keep hold of their customers and build new, online communities where needed.”

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