'State of Local Business Report': Business/customer relationship forever changed

Podium, a Lehi-based communication and payments platform for local businesses, has released its annual “State of Local Business Report,” highlighting the issues that are top of mind for local businesses, particularly how the relationship with consumers and local businesses has forever changed as a result of the COVID pandemic. The research shows that consumers are rooting for their local businesses and supporting ones that offer ease and convenience, such as texting and curbside pickup options, and give back to their communities.

“When the pandemic first hit, many of us went out of our way to support a local business and had to adjust to new ways of interacting with them from curbside pickup to payments over text,” said Eric Rea, co-founder and CEO of Podium. “What this latest report shows is that supporting local is here to stay and so are pandemic-friendly services. Consumers are deeply invested in supporting the businesses that keep their local communities thriving and they’ve come to expect digital-friendly ways of doing business with them.”

The research shows a forever-changed consumer experience, where pandemic-friendly services are not only preferred, but expected.

Increased convenience equals repeat business and referrals.

Consumers are looking for convenience when supporting local businesses. Previously just a nice way to do business, offering services such as texting, contact-less payment options and expanded pickup and delivery options are now necessary for success.

“Ease of doing business” was cited as a top consumer preference:

• 54 percent of consumers say it’s a leading reason they choose to work with a local business for the first time, second only to price.

• 60 percent of consumers cite it as a top reason they would repeat their business with a local business, tied with price.

• 57 percent of consumers claim it’s why they would refer friends and family to a business.

• 46 percent of consumers actively seek out businesses that provide alternatives to speaking on the phone, such as text and chat.

• 43 percent of consumers actively seek out businesses that minimize personal contact.

Consumers have a deep bond with local businesses in their community.

The data suggests that consumers are rooting for their local businesses, particularly after the unprecedented and unpredictable challenges their favorite local businesses have endured. Doing business locally and supporting their local community continues to be an integral part of their everyday life.

• 9 out of 10 consumers say they go out of their way to do business locally, and 7 in 10 consumers frequent a local business once a week or more.

• When asked how positively they perceive their local businesses, consumers gave an average rating of 4 out of 5 stars.

• 3 in 4 consumers say they’re more likely to spend money at a local business if the business shows support of community issues and/or charitable causes.

• 68 percent of local businesses say their business actively supports local charities or causes.

If they haven’t already, local businesses need to prioritize their digital transformation.

The pandemic has accelerated digital transformation across local businesses. Pandemic-friendly services are here to stay, not only for consumers but for local business employees as well.

• 92 percent of local businesses say consumer expectations have changed since the start of the pandemic.

• 2 in 5 (40 percent) consumers still want contact-free transactions, 44 percent still want increased digital and mobile communications, and 3 in 5 (59 percent) still want expanded pickup and delivery options.

• Local businesses also report that after word of mouth, their most effective marketing channels are all digital, outpacing traditional channels like out-of-home advertising and mail.

• Among local businesses with line of sight into investments, nearly 75 percent report purchasing technology in the past 12 months to help their teams work more efficiently.

Local businesses continue to feel effects of the pandemic.

In 2021, labor and inventory have been the top pain points for local businesses, issues that are compounded by a marked increase in demand. Meanwhile, adapting to changing consumer preferences and COVID protocols continues to create uncertainty and unexpected challenges. In fact, the top business challenges for local businesses this past year include:

• Staffing and hiring (52 percent).

• Supply chain and inventory (48 percent).

• COVID-related restrictions and protocols (45percent).

• Managing increased demand (26 percent).

• Changing customer expectations (23 percent).

The survey was conducted online by SurveyMonkey on behalf of Podium from Sept. 10 to Sept. 28 among 1,304 consumers and 923 business respondents across the U.S., Canada and Australia.