Hyper-localisation: a retail reality that is here to stay

Overcoming the barrier of meeting local markets needs

2020 has brought yet more stories of the decline of the British high street. Yet a countervailing trend suggests that consumers are at least as, if not more, interested in accessing local information, services and experiences than ever. A person’s postcode is increasingly a more important determinant of their behaviour than traditional demographics. Businesses that can tailor their customer experience strategies to meet increasingly hyper-localised demand will have a significant competitive advantage in 2020 and beyond.

Research suggests at least 80% of consumers conduct web searches for information local to them. They act on these searches quickly, with half of the people who performed a local search on their smartphones, and 34% of those who searched on their tablet/desktop, visiting a physical store to browse further or complete a purchase within a day. While in-store, the competition doesn’t end: one in six will then do further searches on their smartphone to look for price comparisons.

The way consumers are searching for local information online is evolving rapidly: as search engines are getting ever better at predicting the information people are most interested in by looking at datapoints like their current location and previous search history, fewer people feel the need to explicitly add phrases like “near me” to their searches for local services (as they know the search engine will figure that part out for them). The terms “nearby and “closest” have both dropped in popularity on Google Trends since 2019, and businesses – especially retail companies with many local branches – will need to regularly review their SEO targeting to make sure they stay top of mind and don’t fall down the crucial local search rankings.

Online reviews are an increasingly important decision-making resource, to the extent that they may be supplanting word-of-mouth recommendations from friends and acquaintances. Of the 90% of consumers surveyed who have searched for a local business in the past year, 82% had also read reviews for a local business, and on average they would read 10 reviews before making a decision. Contrary to the idea that local communities are losing their distinctiveness, local businesses that are particularly authentic or convenient are still widely attractive to consumers. Businesses that can build up a buzz in a local area, through positive reviews on social media pages and sites like Trustpilot, will be particularly successful.

To stay locally relevant, large organisations must employ particularly smart personalisation strategies. Customer data is a key resource, with most large retailers now having access to rich behavioural data about their customer base – levels of affluence or price sensitivity at a postcode level, for example – that can significantly influence shopping behaviours across store locations. Stores that don’t keep on top of trends in their local customer bases can rapidly lose revenue: a recent case study described how one major supermarket’s inability to adapt quickly to changing local preferences had led to 3.2Mhouseholds – each averaging a 6.58 shopper visits per year – shopping elsewhere, resulting in $1.2B in lost revenue.

While retail trends will continue to come and go, consumers’ interest in local information and services is proving to be evergreen.