Why 47% of people prefer buying gifts from small businesses
A belief that supporting small businesses is a powerful means of safeguarding local economies.
Despite the dominance of multinational retail brands, the charm and allure of small businesses remain undiminished to British shoppers. Indeed, in the last 13 years, the number of UK SMEs has grown by more than a million, from 4,477,000 in 2010 to 5,547,000 today.
Through a combination of more intimate shopping experiences, community-oriented values, and unique product offerings, a promising trend has been identified by Forbes: 47% of people now prefer buying gifts from small businesses.
At a time of economic uncertainty, exacerbated by the cost-of-living crisis, this preference represents more than just a statistic; it's a testament to the appreciation for the authentic connections that small businesses cultivate within their communities. A belief that supporting small businesses is a powerful means of safeguarding local economies.
In this blog, we refer to the findings shared by Forbes and explore some of the reasons why shoppers are increasingly drawn to small businesses, which products they favour, and why higher prices are not necessarily a deterrent to shopping locally.
According to the Forbes survey, the consumer landscape is witnessing a significant shift. As it stands, unless a larger company offers something unique, 15% of consumers display a stronger preference for small businesses. By contrast, 17% prefer more household names, turning to small businesses only when necessary.
However, the research shows that over two thirds (69%) of shoppers prefer to split their spending between both, indicating a more balanced approach to consumer behaviour than many might have imagined.
Behind this statistic is the interesting way consumers engage with small businesses.
Around 45% make both online and offline purchases, underscoring the importance of an omnichannel presence for smaller entities, while 42% prefer the traditional small business in-store experience.
The reasons behind the growing preference for small businesses are multifaceted. For 57% of consumers, it comes from a wish to support their local community and an understanding that their spending can make a real difference at a grassroots level.
Quality and service are paramount for 43%, clearly believing these attributes to be superior among smaller enterprises. Trust is another crucial factor. Rooted in their communities in a way that more established brands aren't, more than one in three consumers (37%) deem small businesses more principled.
Ethics also plays a significant role. Over a quarter of shoppers (29%) find it easier to determine the ethical sourcing of products sold in small businesses, and 25% believe that - with reputations that more fragile - small businesses are more accountable than their larger counterparts.
As outlined from the start, gifts top the list. 47% of people prefer to purchase items they intend to hand over as presents to loved ones and acquaintances from small businesses.
It is a preference that speaks volumes about the desire for unique, personalized, and thoughtful articles for which small businesses are famous. With the festive season fast approaching, small business owners should look to capitalize on this inclination and ensure their shelves are well-stocked with items that stand out against the mass-produced alternatives found in larger stores.
With food and groceries (35%) and fashion items (27%) also proving popular with the modern shopper, small businesses that sell either can also look to profit from the Christmas rush.
It is common for small business owners to fear that consumers might be put off from shopping locally because they believe that bigger brands offer better value for money.
Although more prominent brands can sometimes offer slightly lower prices, the Forbes survey shows that these fears are largely unfounded. While 29% of respondents said they were only prepared to pay less than 5% more for a product available at a larger retailer, it demonstrates that small mark-ups on price may not be the deterrent many believe it to be.
One in five consumers (21%) would be happy to pay an extra 5%, and 19% would go as far as paying 10% more with a small business
This willingness to dig a little deeper proves that, for most shoppers, the small business experience is valued more than the chance of grabbing a minor saving at a more established retailer.
The statistics revealed in the Forbes survey paint a clear picture: small businesses continue to attract the hearts and wallets of consumers.
The ability of small, independent enterprises to offer unique products, a more personal service, and a real sense of community participation resonates strongly, especially when it comes to purchasing gifts.
As small businesses navigate marketplaces dominated by major retail brands, focusing on quality, community, and personalisation will be essential in maintaining and growing their customer base. So, too, will the creation of a smooth omnichannel presence.