last updated 25/10/2020
NZ small businesses feel the love, global survey reveals
last updated 25/10/2020
26 October 2020 – NZ small businesses and consumers had the most positive outlook during Covid-19
A new study investigating how small businesses in key markets around the world have responded to Covid-19 suggests that New Zealand small businesses are in a unique position thanks to the support Kiwi consumers have shown them.
The research is based on a survey of 1,000 small business owners and 1,000 small business customers across Australia, New Zealand, Singapore, the UK, the US and Canada. Conducted by Forrester Consulting on behalf of Xero, it reveals the challenges and strategies used by small businesses to adapt and thrive during – and after – the pandemic.
‘Kiwi small businesses have shown incredible resilience through this pandemic, leveraging Government and community support and investing in technology to operate in a changed business environment,’ says Craig Hudson, Xero Managing Director New Zealand and Pacific Islands.
NZ consumers reduced their spending the most during Covid-19 (47%), significantly more than the average of the five countries surveyed (30%). This dramatic drop can be attributed to the strict lockdown measures of Alert Level 4.
However, NZ consumers anticipated increasing their spending the most post-Covid-19 (57%), significantly more than the global average (40%). The research found consumer sentiment in NZ was significantly more positive than consumers in other regions.
‘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. We saw digital platforms created like Manaaki, Zeald, and SOS Business, which brought Kiwis together to get behind small business – from free expert business advice to buying vouchers to get vital cash flow into cafés and restaurants which couldn’t operate,’ says Hudson.
The research also found small businesses deliver unique value to consumers which is distinct from large enterprises. In fact, 69% of consumers globally report they feel proud of the businesses in their communities and would feel a personal loss if those businesses were to close. And in NZ, the leading reason (44%) Kiwi consumers purchase from small businesses is to contribute to their community.
To what extent most New Zealanders recognise franchises as local businesses was not covered in the survey; some big brands are often seen as corporates, but franchisees who have taken the time to connect with their local community have reported similar levels of support to Franchise New Zealand.
The pandemic has shifted consumers’ expectations of small businesses: they increasingly expect small businesses to demonstrate empathy. The research shows 93% of NZ consumers would trust a business, buy more, and/or recommend it to friends and family, if it demonstrated empathy. This could include implementing special rules to protect customers from Covid-19, extending business hours and offering delivery options.
Six consistent themes emerged from those small businesses which have been able not only to survive, but thrive, in the current Covid-19 landscape:
Range of products and services. They were most likely to have increased their range of products and services offered during Covid-19 and are likely to continue doing so.
Customer engagement strategy. They have been more likely to engage with their customers on different digital channels and adopted new strategies to acquire and retain customers, including customer engagement tools.
Operations. They have been more likely to adopt solutions to improve their finance, supply chain and employee management.
Technology adoption. They have shown a higher proportion of online revenue as well as greater cloud adoption.
Ecosystem engagement. They have been better at accepting and taking advantage of help from governments, partners, and communities by taking steps to understand the ecosystems in which they exist, the parties involved, and where to go to get help.
Decision-making drivers. They are more likely to look at customer insights and consult advisors, such as accountants and bookkeepers, before making important business decisions.
These are all areas where good franchises have been able to help their franchisees adapt and develop - see When support really matters
Small businesses matter
‘Right now is a crucial time for small businesses around the world and this research reveals the unique role they play in our communities as well as the variety of ways in which they can build resilience,’ said Rachael Powell, Chief Customer Officer at Xero.
‘How these small businesses expand their capabilities, communicate with customers, adopt new technologies and get help from the outside will define their success while we continue to live with this pandemic.’
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