Likes mean profit hikes, study finds

A study into shopper behaviour online has found social media praise from a single customer results in over £100 worth of extra sales.

Word-of-mouth endorsement has traditionally played a major part in the success of independent retailers, but the new findings suggest the effect is magnified when shoppers heap their praise on the internet.

According to the American Express commissioned study, average spend in small shops is £6.58. But if a shopper shares positive comments or images on social media with their friends and followers, this has the potential to generate £125 additional revenue for that shopkeeper from new customers.

Three quarters of people surveyed said they are likely to shop small in order to support local businesses this Christmas, but only 46 per cent said they would recommend them to friends and family online. In contrast, 80 per cent would recommend small shops verbally by word of mouth.

Encouraging independents to give shoppers something to shout about online this Christmas, Heather Laverne, vice president of American Express UK, said: “A few kind words cost nothing and their effect is magnified when loyal shoppers recommend local shops to friends and followers online.

“Our research shows that shoppers are already great at celebrating their favourite restaurants by checking in and posting pictures of their food. However all independent shops could really benefit from the same type of personal endorsement for fantastic products and service. The bigger your social circle, the bigger your potential impact on your local community.”

And the benefits can be long-lasting, with eight out of ten shoppers saying they are more likely to revisit stores recommended by friends.

The study also claims that if everyone shared their positive retail experiences online, it would be worth £31.3bn to the small business industry.

The research also found:

• Although the average social media circle is 176, the younger the audience, the greater their social media circle and the greater their impact on their local high street: 18-24s generate the highest revenue at £162 despite having the lowest average spend of £5.47 per visit
• 22 per cent of people recommend on two social media platforms or more
• Half of those using social media to make recommendations are doing so with an image. Most commonly shared are photos of food and other purchases, followed by friends, selfies and shop staff
• 20 per cent of people who shop small follow the social media accounts of the small independent businesses they love