Issue 6 2021

CEO MONTHLY / ISSUE 6 2021 5 , • Eco conscious consumers want to see more businesses going green and are prepared to spend £705 million extra at those that are - equating to an additional £10 for a haircut, £5 for a beauty treatment and £11 for a hotel room. • In line with this, British businesses have upped their green credentials since the pandemic, with nearly half (46%) now having a smart meter installed. • In the Q1 of 2021, 25,200 smart meters were installed in businesses – 14% more than Q1 2020. • Ahead of a summer of spending, other green upgrades include reducing plastics (22%) introducing energy efficient equipment (10%) and going paperless (18%). Eco-conscious consumers are causing a transformation amongst our ‘nation of shopkeepers’, with new research showing how people are willing to collectively spend almost a £1bn extra on businesses that do their bit for the environment. The report, which surveys 2,000 UK representative adults and 1,000 small business owners, suggests that nearly a quarter of businesses (21%) worry about missing out on trade because their business is not sustainable enough. As the pandemic hit and many businesses were forced to close, 51% have introduced new measures to increase sustainability including reducing plastics (22%) introducing energy efficient equipment (10%), going paperless (18%) or getting a smart meter (8%). The move follows a shift in consumer demands since the pandemic, with the research showing how people are keen to see pubs, restaurants, hairdressers and convenience stores, amongst other businesses, do their bit to go green. Nearly half (42%) of the nation say they are more likely to visit a business that cares about sustainability. Over a third would pay more for a meal out if the business was becoming more sustainable (35%), with similar figures for groceries (35%), hotels (33%) and pubs (31%). On average, customers would be willing to spend an extra £5 per treatment at a hairdresser if the salon invested in energy efficient equipment, eco-friendly products, took steps to reduce their plastic usage, or got a smart meter – clearly it pays to be green. A key way small businesses can contribute to supporting the environment is by installing a smart meter. Nearly half of small businesses (46%) now have a smart meter. The research shows how, on average, small businesses have manged to reduce their usual bill by £394 (annually) due to being able to make more informed decisions about their equipment and ways of working. More than three quarters of businesses (76%) that have a smart meter have said they’re more conscious about the energy usage of their business. Smart Energy GB’s Fflur Lawton said: “The last 18 months have been incredibly tough for businesses but with the world starting to re-open, we’re all looking forward to the Great British Summer. Lots of businesses have been looking at ways they can optimise themselves and invest in their green credentials which are becomingly increasingly more important to consumers. Over the last year we’ve seen businesses invest in more sustainable practices such as tracking their energy by using smart meters. 46% of micro businesses already use a smart meter to help keep track of their energy usage and checking if your business is eligible for a smart meter couldn’t be easier. Every single one fitted across the country is a positive step towards a smarter nationwide energy system.” Over eight in ten (84%) online shoppers would turn their back on a retailer after a bad returns experience. That’s according to new research from Klarna, which highlights the power of returns as a customer acquisition and reten - tion tool, and the repercussions of getting them wrong. With 39% of consumers* having done more shopping online since the pandemic, an increased reliance on returns means people’s patience is waning when it comes to clunky or costly returns processes. 83% of online shoppers** admit to getting frustrated by retailers which have an inefficient returns process, while 82% agree that retailers in gener - al need to improve their returns capabilities. Demonstrating the need for retailers to keep up with consumers’ changing needs, some of Brits’ biggest frustrations with returns stem from the inconvenience of slow, out of date or inflexible returns pro - cesses. Over a third (36%)** cited slow refund processes as the most frustrating element of returning items bought online, highlighting the importance of flexible payment options. Other frustrations include hav - ing to print off return forms when they don’t have a printer (25%), the inconvenience of queuing to return at the post office (23%) and not being able to return items in store that they’ve bought online (21%). Exacerbated by Coronavirus, these frustrations with the returns process are the driving force behind emerging shopping trends, as people find ways to avoid inconveniences. Over the past 12 months, a fifth (21%) of online shoppers say they have reluctantly kept an item they were unhappy with because it was too much effort to return it, 12% have avoided returning items at the post office because it’s difficult to social distance, while 11% have gifted and 9% have resold items they don’t want instead of returning to the retailer. In the long run, this could mean people avoid buying again from retailers that don’t meet their needs. For those retailers that get returns right, this can serve as a competi - tive advantage, helping to attract new customers, and boost customer loyalty. 84% of online shoppers agree they’re more likely to buy from and 86% are more likely to come back to online merchants who offer free returns. However, even a little added inconvenience can come at a cost: over two thirds (70%) of online shoppers state that if a preferred retailer stopped offering free returns, they might not shop with them. Alex Marsh, Head of Klarna UK, said: “Nobody wants to be out of pocket as a result of items they don’t even choose to keep, so it’s no surprise that slow refund processes are the top frustration factor when it comes to returns. As reliance on returns grows, retailers need to ensure they’re offering a smooth, seamless process that meets the needs of today’s customers - considering everything from effortless logistics to flexible payment options. As our research suggests, those that fail to adapt will lose customers in the long term.” The research also uncovers a consistent trend of rising consumer expectations when it comes to returns services. Compared to 2019, a greater number of online shoppers now believe that returns are a normal part of online shopping today (80%, up from 77%) and expect that every retailer they shop with offers free returns as a minimum standard of service (81%, up from 75%). And, as customers increas - ingly demand free and easy returns, more consumers also now state they’d never shop with a retailer that didn’t offer free returns (57%, up from 53%), and that all their preferred retailers offer free and easy returns (73% up from 70%). Natalie Berg, Retail Analyst and Founder of NBK Retail: “Con - sumers often expect a returns policy to mirror that of delivery – fast, frictionless and free – but that’s not always the case. The pandemic has thrust the issue of returns into the spotlight, exacerbating the disconnect between the effortlessness of placing an online order and the inconsistent and often friction-filled experience of making a return. Returns are fantastically out of sync with an otherwise seamless e-commerce experience. “As we reimagine retail for a post-COVID world, retailers must accept that returns are part and parcel of 21st century shopping and, if man - aged well, can encourage conversion and drive loyalty among their most valuable shoppers. Retailers can no longer afford to ignore the post-purchase experience.” SMALL BUSINESSES GO SUSTAINABLE TO TAP INTO £705M ‘GREEN POUND’