According to the latest ONS data, retail profits are on the up. The volume of spending in the high street and online rose 0.9% in January following a 0.6% rise in December. However experts warned that the figures should be treated with caution as the Christmas and January discounts tend to drive sales. With this in mind, how can retail businesses secure consumer loyalty even in the face of recession?
A new report from the RSA suggests that competitiveness of businesses is related to the health of the communities in which they operate. The report found that 70% of customers say they will remain loyal to a brand that demonstrates social value even in a recession and customers who think businesses contribute to the local community will spend more than others. The benefits for communities could be significant too. RSA research suggested that retail spaces are one of the only local places people from different social backgrounds mix.
The importance of creating social value and the link to increased competitiveness has been emphasised by Professor Michael Porter, who recently argued that businesses should pursue profit-making activities which directly benefit the communities they work with. This is partly because values-driven companies have a competitive advantage for many customers, as they are better able to innovate and use their close relationships with customers to better respond to their needs.
What does creating social value and healthier communities mean for business? Working closely with DIY retailer B&Q, the RSA report suggests that businesses should:
Becoming a community hub is a challenging concept for many businesses. The existing work culture, obligations to shareholders and operational concerns can all be barriers to embracing a more community-driven way of work. But for those businesses that really embrace working with their local community the benefits can be enormous - adding value to both the economy and society.
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