By Emily Fallon, below, Head of Customer Experience & Insight, Tyl by Natwest
The pressure felt by small independent retailers has amped up over the last 15 years. E-commerce giants such as Amazon, Argos and even ASOS have cannibalised the market, leaving SMEs wondering how to compete – and, in some cases, if it’s even worth it.
With vast distribution channels and logistics networks at their disposal, large corporations have firmly asserted positions of economic dominance. But, despite their extensive customer bases and astronomical annual profits, these conglomerates have lost sight of what makes a business successful: building a satisfied and loyal customer base. While these e-commerce titans have changed the definition of ‘convenience’ for consumers, this convenience comes at the cost of community and building good relationships for that much-desired ‘human touch’.
The rise of online retail events
In recent years, Black Friday and Cyber Monday have resulted in a surge in consumer demand. While these profitable e-commerce occasions were born in the US to coincide with Thanksgiving celebrations, they have become unmissable marks in the calendar for retailers across the world, both online and in-store.
Prime Day has followed in Black Friday’s footsteps, initially kicking off in 2015 to celebrate Amazon’s 20th birthday in July. Far enough away from peak consumer spending season in Autumn and Winter, Prime Day has managed to make its mark on the retail calendar and capture enormous swathes of consumer demand during a typically low season.
The maiden event in 2015 posted Amazon’s most profitable day of sales. This upward trend shows no sign of slowing down, and in 2023 Amazon reported that UK consumers spent £581m across the two day discount event – a 1.3% increase compared to last year. Amid the UK’s cost of living crisis, the numbers suggest that, although buyers are becoming more spend-conscious, consumers are still willing to spend when a discount is up for grabs.
Emphasising the ‘experience’ in the customer experience
How can small independent businesses survive in today’s tumultuous retail landscape? By playing to their strengths, and utilising tools that have long escaped the focus of huge retailers, independent businesses can carve out their own niche in the market.
For small businesses, the value of human interaction when buying goods and services should be front and centre to their sales strategy. In a time when e-commerce is often a faceless transaction, small businesses need to view customers as individuals with differing wants, needs and tastes.
In the current economic environment, consumers are more spend conscious than ever, with 62% making fewer impulsive purchases. This increased consideration around making purchases means businesses need to go beyond customer interest in your product to effectively make a sale. Business owners can use customer analytics to help guide a more tailored and enjoyable experience. Tools such as Tyl’s Merchant Portal provide insight into the demographic of a business’ customer base and which products are most in the highest demand at any given moment.
Returning the favour
In addition to the little touches that can help businesses build rapport with customers, offering bespoke offers to reward loyalty can go a long way. Our research previously revealed that 73% of shoppers want to support their local communities and high streets. Businesses can consider crafting bespoke personalisation and loyalty programmes for those that do to better tailor their offerings to meet the needs of their unique customer base.
Consumers are embracing loyalty programmes now more than ever, with 41% more likely to engage with them in 2023 when compared to last year. By building this two-way relationship, businesses can ensure that their customer base is more likely to return in future. Designed to attract new customers and reward existing clientele, Tyl Rewards helps business owners implement a rewards scheme without the stress of manually keeping track of returning customer activity or relying on physical loyalty cards. In such tough economic conditions, a combination of instantly redeemable rewards and discounts can make a significant difference to consumers deciding where to take their custom next.
A pillar of the local community
As a small business, it has never been more important to demonstrate your value to the local community. 53% of Brits say they have changed their shopping behaviours to be more considered, and now more than ever it is vital that people feel that they are making their money go as far as possible. Small businesses cannot compete on price with larger retail counterparts: but they can use their local customer base to their advantage. To do this, SMEs must make themselves indispensable to their community.
Initiatives such as the Tyl Giveback Community Fund, can help merchants stand apart from the crowd – for every card payment taken, a portion of the transaction goes towards supporting local charities and community projects. The fund has raised over £740,000 to date; all the while not costing merchants a penny, but going a long way to reinforce the sense of local community across the UK. By tapping into customers’ social conscience, businesses can ensure that every pound spent in their store is working harder than it would elsewhere. At a time when large retailers have been accused of profiteering, knowing that their money is having a wider impact will strike a chord with consumers.
Consistency is key
Above all, consumers need to know that the foundation of any purchases they make will be simple and stress-free. This all comes down to the transaction itself. Business owners can go the extra mile to maximise the customer experience and set themselves apart, but all this hard work can be undone if there are issues finalising a purchase. At Tyl by NatWest, we are helping business avoid this. Innovations such as the rollout of Tap to Pay, which allows merchants to use their mobile phone as a card reader to take payments are helping small businesses facilitate transactions with ease and speed. By deploying seamless and cost-effective payments technology, merchants can customers benefit from a hassle-free payment experience while supporting their favourite local businesses.
