We Are Falling in Love with Local Loyalty – But at What Cost to Loyalty Campaigns?

We seem to have gotten all sentimental about small businesses again. Which is long over-due if you ask us. The community of retailers offering specialised services and experiences have revitalised our high streets and that is a truly wonderful thing.

It does mean, however, that medium and large retailers might have to up their game if they want to compete with their more niche and personable small business competition.  Are their loyalty campaigns now vulnerable?

Covid-19 will continue to disrupt the way shoppers behave way into 2021. It will be interesting to see which habits embed further and which subside as the lockdown is lifted.

“Shopping local more important than it ever has been, during the first lockdown people turned to farm shops to get eggs, local convenience stores for toilet roll , and it’s lovely to see that people are carrying on supporting local , but let’s not stop here, shop local for life not just for Christmas” Maddy Alexander-Grout, My VIP Card

Businesses Have Been Hit Hard

It’s no surprise that people are talking about the importance of small business again. The pandemic has meant the closure of one in four small businesses in the UK and nearly a quarter of a million of those permanently (Office for National Statistics, 2020). The financial implications are much greater, and most of us are old enough to remember what the highstreets looked like by the end of the last economic crisis. Nobody wants a repeat of that, especially since the impact of growth was only now really taking hold.

“We are seeing a real positive sentiment toward local businesses as a result of the pandemic. People are working from home and spending more time in their local communities and they are discovering a real variety of fantastic local businesses offering great products and service with a smile.” – Paul Lenihan, OPEN Gift Card

It’s not just small businesses, though. Larger chains are closing stores hand over fist, with fashion giant H&M shutting the doors on 250 shops next year. Paying the cost of renting floor space which has so firmly pushed out smaller retailers from prime locations, is now an unstainable burden.

Perhaps some of our sentiment should extend to our favourite high street stalwarts, too.

 

Creating a Loyal Community

Retail Economics’ Outlook for The UK Retail Industry 2021 Report identified three key trends changing the way people shop:

  • A shift towards online and local shops
  • A transference of spending towards home living
  • More time spent at home

In no small part because of this heady combination of sentiment and a return to a more local way of living, over half of global holiday shoppers plan to shop locally this year (https://econsultancy.com/stats-roundup-coronavirus-impact-on-marketing-ecommerce-advertising/)

“The COVID-19 pandemic has reignited the importance of supporting local whether that is helping your neighbour, family, friends, or colleagues. Local business plays a huge part in this with many adjusting their services to provide for their community in these uncertain times. building strong allegiances with the public. We have seen a change in shopping habits, with the reassurance of people knowing where products are sourced, reliability and the people behind the business. More than ever people value local business, which extends to B2B with many partnerships forming.” Sean Caruana, The Lifestyle Card

SME realised a long time ago that community was key to their success and creating a network of local and loyal customers was essential. Corporates and larger retailers have often failed to integrate themselves into their communities, and as outlined above, have barricaded themselves into expensive and central retail units. People not travelling into cities for work are no longer creating the footfall.

 

Corporates are Responding with Their Big Seasonal Campaigns

The likes of John Lewis, Sainsbury’s and even Aldi are now in competition for that coveted title of ‘best festive ad’, and it’s one that is about getting a slice of that £30bn spending pie leading up to Christmas. This level of advertising is something small businesses simply cannot compete with.

This year has levelled the playing field somewhat for small vs. large retailer loyalty. It will be interesting to see whether consumer sentiment and proximity pushes up local spend, or the big bet ads allow the chains to keep their huge market shares.

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