Customers value empathy from small businesses, new post-lockdown study shows

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Charlotte Harrison, owner of the Beauty Bar, in Parnell Auckland, says she added more online services and communications with customers during lockdown.

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Charlotte Harrison, owner of the Beauty Bar, in Parnell Auckland, says she added more online services and communications with customers during lockdown.

The Covid-19 pandemic has shifted what consumers expect of small businesses, a study commissioned by global accounting software company Xero found.

The study found that increasingly consumers in the five countries surveyed expected small businesses to show empathy and that could include having special rules to protect customers, extending business hours and having delivery options.

The research showed 93 per cent of New Zealand consumers would trust a business, buy more, and/or recommend it to friends and family, if it demonstrated empathy.

The study conducted by Forrester Consulting for Xero found businesses used technology and digital sources to help them adapt to Covid. In New Zealand a quarter invested in operational software, almost a half based decisions on customer feedback while 41 per cent based decisions on online research.

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Once the lockdown was lifted business bounced back for the Beauty Bar in Parnell, Auckland.

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Once the lockdown was lifted business bounced back for the Beauty Bar in Parnell, Auckland.

Auckland beauty business owner Charlotte Harrison added more online services and communications with customers during lockdown to bring in some income and has kept those going since.

Customers were able to have free skin assessments through video apps Zoom and Facetime during lockdown and the Beauty Bar started selling all its products as well as vouchers online. It also started selling “at home facial kits” which could be used instead of coming in for a treatment.

Lockdown was stressful, especially the first one, but the business received the wage subsidy for staff and had a “really kind” landlord who reduced their rent and kept that going even after lockdown was lifted which reduced pressure on the business, Harrison said.

Once the first lockdown ended the business at the Beauty Bar in the affluent Auckland suburb of Parnell, bounced back with clients “almost banging the door down”.

“It was really cool to see that everyone was just so excited to come back in and I think everyone was kind of supporting local,” Harrison said.

Forrester conducted online surveys with 1012 owners of small businesses with fewer than 100 employees, and 1011 consumers who worked with or used small business services weekly in Australia, Canada, Singapore, New Zealand, the United Kingdom and North America.

The study found 47 per cent of Kiwi consumers reduced their spending with small businesses during the Covid restrictions, compared to the average of 30 per cent in the five countries. Stricter lockdown measures in level 4 were responsible for that, Xero said.

On the flipside 57 per cent of Kiwi consumers intended to increase their spending after lockdown compared to the average of 40 per cent in the five countries.

“These numbers show Kiwis’ commitment to shopping and spending locally once lockdown measures were lifted, and this support for their communities has enabled many Kiwi small businesses to keep going,” Xero’s Craig Hudson, managing director New Zealand and Pacific Islands, said.

Digital platforms created like Manaaki, Zeald, and SOS Business, brought Kiwis together to get behind small business, from free expert business advice to buying vouchers to get vital cash flow into cafes and restaurants who could not operate, Hudson said.

In New Zealand the leading reason Kiwis purchased from small business, 44 per cent said, was to contribute to their community.

In New Zealand 82 per cent of small businesses used Government support and almost 70 per cent used community support.

Small businesses that thrived during the restrictions were more likely to have increased their range of products and services, communicated well with customers on digital channels and adopted new strategies to get and keep customers.

They were also more likely to improve their finance, supply chain and employee management and had shown a higher proportion of online revenue.

They had been better at taking help from Government, partners, their communities, advisors, and looking at customer insights before making important business decisions, Xero said.



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