Study: How Small Businesses Hooked The American Consumer

By Steve Rowley of Cox Business

American consumer’s commitment to small business is holding steady. And with U.S. entrepreneurs launching a new business every minute, let’s hope the trend continues.

screen shot 2015 08 31 at 3 41 10 pm1 Study: How Small Businesses Hooked The American Consumer
steve rowley headshot Study: How Small Businesses Hooked The American Consumer

Steve Rowley
(Photo courtesy of Cox Business)

screen shot 2015 08 31 at 3 41 10 pm1 Study: How Small Businesses Hooked The American Consumer

According to the 2016 Cox Consumer Pulse on Small Businesses,* nearly 90 percent of consumers shop small at least once per week. The survey, sampling more than 2,000 American consumers, also found that 42 percent of consumers frequent small businesses three or more times a week. Moreover, the survey uncovered interesting trends behind customer decision making.

 

Service Matters

screen shot 2015 08 31 at 3 41 10 pm1 Study: How Small Businesses Hooked The American Consumer

Though the survey found consumers tend to shop small for convenience (66 percent), results also showed a more service-centric side.  In fact, 53 percent shop small because they simply enjoy the customer service experience.

For example, many respondents choose to forego larger commercial experiences, such as supermarket shopping, for neighborhood food and beverage stores. While the supermarket may offer slightly discounted goods, it’s hard to rival the personable hospitality customers receive at smaller stores.

This trend continues beyond grocery and convenience stores. When asked which types of small businesses they support regularly, local cuisine and clothing shops were among consumers’ top three choices.

  • 75% Food and beverage stores (grocery, convenience stores)
  • 56% Restaurants
  • 34% Clothing and clothing accessories stores

 

WiFi Beats Coffee

screen shot 2015 08 31 at 3 41 10 pm1 Study: How Small Businesses Hooked The American Consumer

In addition to supporting the local economy, shoppers also love a free perk. When asked what types of technology could enhance the experience at their favorite small business, shoppers sided with free and reliable WiFi (45 percent). This strongly overshadowed other options, such as product recommendations based on a shopper’s purchase history (24 percent) and eCommerce capabilities (10 percent).

Furthermore, shoppers chose WiFi over coffee and cable as the best treat to have while waiting for service.

  • 56% WiFi
  • 21% Coffee
  • 17% TV/Cable
  • 6% Magazines

 

Consumers Slowly Phoning In Payments

screen shot 2015 08 31 at 3 41 10 pm1 Study: How Small Businesses Hooked The American Consumer

While consumers crave WiFi, they haven’t quite caught on to mobile wallets. When asked whether they would use their smartphones more often to pay for items if the small businesses they frequented accepted mobile payments, 55 percent said no.

Even so, consumers are all in favor of small businesses that are adopting digital methods to better engage with them. In fact, consumers prefer the following channels when interacting with their favorite small business:

  • 51% Website
  • 48% Facebook
  • 45% Email
  • 18% Text
  • 10% Instagram
  • 9%   Twitter

 

Growing Up A Go-Getter

screen shot 2015 08 31 at 3 41 10 pm1 Study: How Small Businesses Hooked The American Consumer

The survey uncovers a couple of other tidbits around consumers and small businesses. For instance, results found that the entrepreneurial bug starts early for many consumers. According to respondents, U.S. consumers have tried their hand at a variety of business ventures as kids.

  • 44% Babysitting
  • 34% Lawn mowing
  • 27% Neighborhood lemonade stand
  • 24% Paper route
  • 12% Dog walking

screen shot 2015 08 31 at 3 41 10 pm1 Study: How Small Businesses Hooked The American Consumer

There’s also the growing popularity of entrepreneurial television shows, such as Shark Tank, which 48 percent of respondents identified as their favorite SMB reality TV show.

Because of their unparalleled customer service, resourcefulness and willingness to connect with customers on their terms, small businesses will continue to shine.

*Cox Business commissioned a blind survey of American consumers in March of 2016. Respondents to the online survey included 2,094 consumers. The margin of error for this survey is plus or minus three percent.

 

Stephen Rowley serves as Senior Vice President of Cox Business, overseeing its strategic direction, including all marketing, operations, sales, product development and partnership initiatives. Before leading Cox Business he was vice president of sales and field operations for Cox Business’ western U.S. markets where he served as the chief liaison between corporate headquarters and the western markets with oversight on local strategic planning, sales performance, marketing, back office, customer installations and capital investment.

The views, opinions and positions expressed within this guest post are those of the authors alone and do not represent those of CBS Small Business Pulse or the CBS Corporation. The accuracy, completeness and validity of any statements made within this article are verified solely by the authors.

 

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