Consumers Trust Local Businesses Over Online-Only Brands

Yet, 96% of buyers research purchases online, regardless of where the transaction occurs.

November 18, 2021

Local Business Sign

SAN FRANCISCO—Sixty-seven percent of consumers trust local businesses more than internet-only brands, according to a new report by digital technology company Uberall. Seventy-five percent of baby boomers agreed with this sentiment, compared with 64% of millennials and 57% of Gen Z. Two-thirds of consumers also include the nearby locations of national chains in their definition of “local business.”

However, 96% of buyers research purchases online, regardless of where the transaction occurs, indicating an ongoing need for both online and offline channels. Google is the primary consumer research tool, and nearly 70% said that more than half their search activity has a local intent, meaning it’s focused on businesses, services and activities in their area. Local intent as a percentage of overall search volume was even more pronounced among millennials and Gen Z.

“The pandemic increased the number of people who were using the internet for e-commerce, out of necessity,” said Nick Hedges, chief strategy officer and EVP North America, Uberall. “But that hasn’t changed the value and importance of a local presence; having both online and offline capabilities is now critical to meet the channel-agnostic needs of consumers today.”  

The survey found that a large majority of consumers (88%) think it’s important to trust the businesses they transact with. It’s also about an emotional connection, with 55% of consumers saying they feel more “emotionally connected” to a business in their area. However, with greater trust comes higher expectations: Respondents said they expect the most of independent local businesses (41%), compared with national chains (38%) and e-commerce providers (20%). This shows that local stores and national chains are held to a higher customer experience standard than online-only brands, according to the report.

“With online consumer trust declining, buyers are reassured by a local presence,” said Greg Sterling, vice president of market insights, Uberall. “People want to buy as their convenience dictates; nearby locations provide convenience as well as additional confidence to buy online, with the knowledge they can pick up or return products locally.”

The pandemic has boosted loyalty in some cases, with 58% of respondents saying it has made them more loyal to local businesses. Loyal customers can become advocates: 63% of respondents said they would refer friends and family; 41% said they would write positive online reviews. (Learn more on how to win customer loyalty on this week’s Convenience Matters podcast.)