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Keeping money local

Independents can’t compete with online shops and global chains. And when those businesses shut down, they leave gaps in the local economy as well as the high street.

High streets are changing

As family businesses and independent shops close down, they are often replaced by e-cigarette shops and tattoo parlours, which serve a narrow market. In richer areas, shops are replaced by cafes, bars and restaurants, which shifts the economy from day to night.

A shared loyalty scheme for independent retailers

We showed six independent retailers in Chorlton a prototype of Locally, a scheme that earns shoppers ‘perks’, redeemable in any participating business, when they shop with local independent retailers.

Close up of a person using the Locally app to enter an amount
Money spent in local shops earns perks that can be redeemed in any participating business

Could Co-op encourage shoppers to spend their money locally and support their local economy?

Only if the scheme is fair for everyone

…there were concerns about the practicalities of asking staff to use an app

Reaction to the core concept (earning points with one business and getting the perk from another) was mixed, and there were concerns about the practicalities of asking staff to use an app.

Some local retailers were open to the idea behind Locally, and were interested in seeing the concept develop. However, most did not like the idea of shoppers earning perks in other shops and redeeming them in theirs, and felt the system could disadvantage them.

We heard mixed opinions about local business associations, that they were old fashioned and not very effective. Local business associations as technological platforms would be an interesting area for the Co-op to explore next.

Would Locally benefit local retailers?

We have too many cards in our wallets already

Another card-based scheme was not the answer

Retailers we spoke to felt there are already a lot of similar schemes in place, which made it hard for their customers to keep up. Another card-based scheme was not the answer.

How many cards do you get these days? Do you always have it in your purse? I have about 15 different loyalty cards in my purse.

The card is nothing new - I don’t think it will make any difference.

- A, Jewellers

An app doesn’t suit everybody

Retailers were worried about how they and their staff would use the app. Some were worried about it being time consuming and fiddly, and others thought it would be wrong to ask staff to use their own data whilst using the app in the shop. We also heard that not all their customers had smartphones, and would therefore miss out.

We get a lot of older people who don’t know how to use their phones - why should only the tech savvy people get the discount?

- A, Jewellers

From a customer perspective, there might be a reluctance for a retailer to link to a phone. What details are they taking? I’d have security concerns as a customer.

- L, Delicatessen and wine shop

I’m slightly nervous about phone my phone as well, I tend to keep it in my phone or in my pocket, if I was using that, no, sorry… you’re constantly distracted, and I’d be nervous about using my own phone and putting it down somewhere.

- D, Craft shop

Retailers worry about losing out

The goal of Locally was to increase local shopping overall, by offering rewards to people who shop with any local retailer. However some of the people we spoke to were worried that they would lose out, that shoppers would earn their ‘perks’ in other shops and redeem them in theirs. They were not convinced that they would benefit from new people coming into their shops.

I have to give money to get people to come into our shop - which devalues all the hard work that we put in - it says that what we have isn’t enough. I don’t want to read any more. It instantly makes me go ugh.

- S, Clothes shop

If everyone goes for a haircut - and then they redeem the points at [my butchers] - I’d be fuming! I’d be unemployed! I’d have to work for Tesco!

- P, Butchers

I can’t compete with that. I think people would come here, not to earn their points, but to use them, but they’d tell their kids they could use them in [partipant’s] shop.

- D, Craft shop

Not everyone feels a sense of community with other retailers

…across the wider area there wasn’t a sense of community

Some retailers did talk about a community of shop keepers - but it wasn’t universal. Retailers who were on the same street tended to be involved in their local area, but across the wider area there wasn’t a sense of community.

We’re not close enough to Beech Road, they don’t want us on that one, we’re kind of left to our own devices.

- A, Pet shop

Local shops on their street work together - they put their own money into decorations.

- A, Jewellers

Other shops? I’m quite insular - I’m not massively involved in what other people are doing.

- S, Clothes shop

It’s like a community. We all knew each other and looked out for each other. Like an extended family.

- P, Butchers

Retailers had their own schemes in place

Everyone we spoke to had some way of rewarding loyalty to their own business.

We have a discount in the store. It’s a bit like Boots. They have an account in the store, and they acrue points. We didn’t go down the route of cards, we just wanted a pin, it just puts the points on their account. They love it, and it keeps them coming back.

- A, Pet shop

If a customer comes in and spends £500 - we’d offer a gift as a gesture - it’s an unexpected surprise - the cherry on the cake.

- S, Clothes shop

We already offer a 10% discount, anything that’s full price. I don’t want to confuse things. I’d probably stick with that, stay the same.

- L, Delicatessen and wine shop

Trading associations are not working for everybody

We heard very mixed views about the local Traders Association. Some saw value in it and were active members, but others were critical, seeing the organisation as being old fashioned and not worth the cost of membership.

I don’t participate in the Traders Association - it’s changed over the years - when I was having children they were trying to cover a bigger area - I was too tired and busy!

- S, Clothes shop

The only time they come knocking is money for Christmas lights. Trading Associations are not run properly. They’re not run properly. No one has time to turn up after work. There needs to be a portal, or an app, where businesses can come together and talk, more like social media, maybe password protected. And free.

- A, Pet shop

We’re an active part of the Traders Association. It was important to me [and partner], that we could build up a rapport, and use their business and reach to them first, see if there’s anything we can work together.

- L, Delicatessen and wine shop

Will retailers accept the Co-op’s involvement in this?

Yes, because of the strength of the brand

…the size and reputation of the Co-op would help a scheme like this to be successful

We showed the participants a version of the card and leaflet with the Co-op brand. Reactions to this were positive, and people felt that this was the right kind of area for the Co-op to move into, even if they didn’t like the way the scheme was operated. They also thought that the size and reputation of the Co-op would help a scheme like this to be successful.

I’d want to know it really would bring people to us. If it was run by the Co-op would you run a national advertisting campaign, that could be a good thing.

I don’t dislike the idea of the Co-op running a scheme that gets them to shop locally.

- D, Craft shop

I think, I feel comfortable seeing the Co-op logo, seeing the Co-operative being linked to… well anything really. It’s got such a good reputation. It’s a good thing. The only contradiction, is it doesn’t… well how can you have the Co-op linked to local businesses. … it might be that the Co-op shop is a bit of our competition. If it was Sainsbury’s or Tesco, that wouldn’t be good, but Co-op is different.

- L, Delicatessen and wine shop

If the Co-op are doing something like this, they are trying to keep money local and not give it to the big ones like Tesco and Morrisons. It’s all to do with money. Although I do notice that the Co-op have local charity on their notice board and different events - like at the moment a firework do in Beech road. They’re pretty good like that.

- P, Butchers
Leaflet explaining the Locally scheme with Co-op branding
People responded well to the Co-op version - because of our reputation

How we ran this experiment

Talking to experts

We talk to experts in the areas we’ve been looking to find out what they think the big challenges are. We then turn these challenges into positive “how might we?” questions which we try to answer as we carry out the experiment.

We’re lucky enough to work for a large organsiation with a lot of expertise in-house - we’re grateful to our colleagues who have given us their time and their knowledge. We’ve found that the Co-op name has opened doors for us, and external experts have also let us interview them.

From idea to software in 5 days

We tested this idea by building and testing a prototype in 5 working days. Our goal was not to test the effectiveness of the prototype, but to use it as a starting point for a conversation. Using the GV product design sprint framework, we were able to quickly test our assumptions and make something that felt real enough to try out on some potential users. The conversations we have with users as they interact with our prototype tell us if an idea is worth persuing or not.

One-to-one interviews with potential users

We only have a few days to organise interviews, which means we have to use the quickest way to find relevant people to talk to. We use social media and our professional and social networks to carry out highly targeted recruitment to find people who closely represent our target audience.

We observe and record our interviews, taking care to remove any details that would identify the participants. Everyone involved signs a participant agreement and we give vouchers to the people who take part as a thank-you for their time.

We use active listening techniques to get deeper insights into the reasons behind comments that people make. We have learnt a lot from experts in Co-op Digital such as Andrew Travers and James Boardwell that have helped us get the most from these interviews, thank you.

Further reading

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