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October 22, 2024
What’s Stopping Consumers From Shopping Local More Often?
Illustrating the challenges mom-and-pop businesses face in encouraging consumers to buy local, a recent survey found that of the 29% of U.S. adults who said they are morally opposed to shopping at Amazon, 85% still do anyway.
On the favorable side for local shops, the online survey of 2,000 U.S. adults taken in August from LendingTree found that 90% of respondents believe shopping locally positively impacts their community, and 65% wish they could do so more frequently. When asked which local businesses they commonly use, 78% said grocers or farmers markets, 60% said restaurants or cafes, and 48% said clothing stores. Younger generations were also found to shop locally slightly more often than older generations.
Further, half are willing to spend more to support local businesses.
However, 80% of respondents indicated that inflation was making it more difficult to shop locally, and 75% wished they could afford to patronize their local businesses more than they do.
Overall, cost was found to be the top reason consumers don’t shop locally more often (cited by 57%), followed by convenience (42%) and product selection (39%). When asked which factors are important when determining where to spend their money, only 14% cited supporting their local community, with the primary purchase drivers being price, convenience, product availability, product quality, and product selection.
The survey did find that “buy local” movements are resonating with some consumers. The touted benefits include strengthening the local economy and reducing your carbon footprint.
While 71% of consumers order from Amazon and other online retailers at least monthly, 31% say they feel guilty when they do. Gen Zers feel the most guilt (45%, versus 20% of baby boomers). Among income groups, 40% of those who make at least $100,000 a year said it weighed on their conscience, compared to 24% of those who make under $30,000.
“People feel guilty because they know that many small, local businesses have struggled to compete with Amazon and the onslaught of online retailers,” said Matt Schulz, LendingTree’s chief credit analyst, in a statement. “They value small businesses and know how important a part of the community they are, but shoppers also feel conflicted because they’re struggling, too. Their financial wiggle room is tiny, making them very price-conscious.”
When it comes to the environmental impacts of online shopping, less than half of Americans (43%) consider them, although younger generations (53% of Gen Zers and 50% of millennials) are more likely to care than older ones (38% of Gen Xers and 30% of boomers.)
Discussion Questions
What are the primary reasons consumers’ intentions to shop local aren’t translating into more actual purchases?
What else can local stores do to incentivize shoppers to shop locally?
Is guilting shoppers fair play?
Poll
Loading …BrainTrust
Georganne Bender
Principal, KIZER & BENDER Speaking
Doug Garnett
President, Protonik
Brian Numainville
Principal, The Feedback Group
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This really depends on where people live and what local retail provision is like. In some rural areas, choice isn’t great and most retail is geared around convenience. So, for bigger purchases folks venture further afield to a larger shopping destination. In suburban and urban areas there is more choice – including independents – so shopping locally is more common.
In some cases, shopping local in rural markets is just more natural since there are not the usual larger retailers found in urban and suburban settings. In other markets, to your point, there are fewer choices. As you move to urban and suburban markets, one does need to seek local out to make that choice since chains abound. But in terms of guilting people into shopping local, I don’t think that is productive.
The reasons have been pretty well identified: cost and – in many instances – lack of availability (of course we also need to define “local”: is buying at a Home Depot or WalMart 10 miles away “shopping locally”?)
I’d advise against trying to guilt your way into someone’s wallet: far better to come up with a positive reason for a customer to come in (other than “your tax levy may go up if I go out of business”).
We all have the opportunity to shop locally, whether or not we do it is a choice.
There are many reasons why consumers choose online sites like Amazon over a trip to a local retailer, but the big one is convenience. Physically visiting a local merchant versus clicking a few buttons and getting what you need overnight is too tempting for some people.
Guilting consumers to shop locally doesn’t work. Indie retailers need to make sure a visit to their store is worth the trip. And consumers need to stop giving lip service to “Shop Local, Shop Small” and actually get out there and do it.
I agree Georganne, I am so guilty of my actions not matching my intentions when if comes to shopping local. It consistently comes down to ease of execution – extra time, parking availability and cost, as well as consistency of assortment selection. More so than shopping online, I have my mall-based go-to’s that I can visit in a single trip and know what to expect each and every time. For the local business owner it has to be about creating a compelling value proposition that extends beyond just being in the neighborhood. They also have to building local awareness and in store activations so customers will make the extra effort to visit and shop.
Broadly speaking, in retail, we live a constant state of David vs. Goliath by which local merchants – devoid of the massive resources and extensive ecosystem partners – are pitted against larger operations with a much broader set of capabilities. This could include deeper customer data (which leads to more aggressive and more personalized offers), more sophisticated supply chain practices (which drives a more diversified inventory mix) and a broader set of digital & physical reach (which leads to added convenience points). Until the playing field is leveled and local businesses can better compete on pricing, they will also fall below the line when customers have to work just a little harder to buy their products. I truly believe customers are willing to pay more for local … but only so much more in terms of price but also convenience.
It is far too easily forgotten that people shop for products in stores which make their shopping effective. So, while customers would prefer to shop local few stores offer the right goods to make it worth their time. The great exception is in hardware and DIY — where co-ops like Ace and Do-It-Best enable local hardware stores to thrive by offering goods which are local and which matter. Critically, though, these stores generally offer something unavailable at the national chains — advice on DIY projects and products as well as advice LOCAL to the area. McGuckin Hardware of Boulder, Colorado and Parkrose Hardware in Portland, Oregon are two of the superb local stores who make this work. It’s not enough to ONLY be local — the store must provide what customers need. Most stores have not found a formula to make this happen.
McGuckin is a good example. They’re a strong example of competing against big hardware/home retailers. McClendon here in Seattle is another beloved local hardware store chain who has reduced shopping hassles, offers decent prices, and an incredibly friendly team. Shopping local feels great.
Local store shopping vs. national chain shopping varies by market. In some certain markets, chains are simply better than local independents, or even city-wide chains. In other cases, there might be a local company or two, that simply understands the market better and presents certain local offerings that chains do not.
Since national chains have much greater buying power than most independents, pricing is usually better in the chain store, and that has a lot to do with choice for shopping.
The most successful national chains go out of their way to be both national but also local. I live in the St. Louis market, where national chains get deeply involved with the market’s sports teams, local events, theatres, and more. But local chains can still do it better, and more sincerely. Exceptions, however, might be like Hy-Vee, where each store is very “local.”
Oddly enough, there are a great many consumers who never learn the difference between what’s local, and what’s not. Its hard to imagine but there are people who live in “Peoria” who view Kroger as a local retailer. It is wise that Kroger leaves banner names local when they buy an existing retail chain. In Denver, it’s still King Sooper, and in Utah it’s still Smiths.
It boils down to this: get in my car, fight traffic, go to a store that may or may not have what I need OR put things into a shopping cart, hit click, then enjoy my free time. We are a convenience society, and our own self-interests generally win the day.
I grew up in my father’s stores; he was the definition of a small, local business. There were two adages I heard from him over and over again. “Those people trade with us, shop there. Keep your money in town.” Good advice, even today. And, I’m biased but I do still shop local at every opportunity. That doesn’t let the little guys off the hook for delivering value, it’s just that that value, like the local hardware, might not be price, it might be being able to walk in with a broken bolt an having someone hand me a replacement instead having to navigate an aisle of packaged hardware.
BTW the other thing Dad told me “Don’t go into retail.” I didn’t do as well on that one.
Consumer’s intentions don’t translate into actions because too many local businesses fail to create a compelling value proposition.
But, it’s going to get worse.
We recently bought a new home. My entire thinking on this issue was turned upside down. I’ve learned that home center employees know their product and category better than I imagined. What they were missing was better or higher-end products. This is a void local retailers can leverage.
Local retailers have to look like they’re in business for the long haul. There is a comfort level in doing business with a company looks like they’re going to be in business down the road.
Don’t look like a local yokel.
Local retailers can’t compete on product with online retailers. Have the ONE THING your best prospects want instead of everything available. Confusing prospects is a bad strategy.
Have higher standards than national retailers. I may be biased, but I expect your salespeople to be better dressed. Don’t allow jeans. The apparel they wear reflects on the products you sell.
Be responsible. Return calls, and respond with prices or questions quickly. Be professional.
Stop competing on price. Nobody believes your local store can compete with a billion-dollar competitor. Price isn’t everything. It’s only part of the buying decision.
Be in the community. Shake hands with every person possible. Relationships drive sales.
Then, advertise to every prospect. With digital you can do it affordably. Be bigger than anyone imagined. Advertise so much that it is assumed you’re an important person/retailer. Drive desire so consumers can’t imagine doing business with anyone else.
Guilting customers or attacking the big bad competitor is a waste of resources and energy. You’re not going to compete successfully with the big guys on lower prices or a vast selection. So instead, determine what the big stores don’t do or won’t. Define what you do well, with your strengths (over then big bad guys), and then communicate it over and over to customers. You might think customers will figure it out or “get it”. Take the extra step remind them in messaging, signage and verbal communication. They’ll reward you with loyalty and higher sales.
Shop Local is a well-intentioned concept but it should not be a bandage for a poor performing retailer. The local grocers, farmer’s markets, clothing stores noted in the article gain business by offering a blend of unique items and superior service. They just happen to be local businesses. Without those differentiating attributes, why shop local?
Retailers who participate in a Shop Local initiative should also be screened for being exceptional retailers. Otherwise the Shop Local banner will be tarnished by operators who should probably rethink their retail ambitions.
People don’t shop locally as much as they intend to because it’s simply more expensive and less convenient than buying online from Amazon. Guilt-tripping shoppers isn’t fair and won’t change anything; people have tight budgets, and making them feel bad won’t make local products cheaper. Instead, focus on delivering better value and personalized experiences that online retailers can’t match.
Guilt is a horrible motivator. There are other messaging options (service, you know the owner, etc) that are positive and can move the needle in your favor.
The other data point here is “shop local” is usually code for “this is an upper class neighborhood with cool little specialty stores that are interesting to walk through but offer very few items you actually need.” And in many (most?) of those cases these stores are more of a tourist attraction than anything else.
Today’s consumers seek convenience and value, the two greatest factors thwarting the shop local movement. The best way for local stores to incentivize shoppers is to offer unique products at competitive prices and make the shopping experience as personalized and convenient as possible, including various payment and pickup/delivery options.
Being able to establish personal relationships with customers is a significant advantage for local stores, and they must capitalize on that. Consumers will prioritize shopping from someone they see frequently at church or community events.
I see no advantage shopping local independent small stores
Why guilt? Your only obligation is to yourself in this matter. Groceries and liquor excepted. What does the little store do for me? Nothing usually. I am not interested in supporting their family or job. I knew a bookstore owner who tried to guilt me into buying books there. He hated online stores. I never went back where I live small owners are often less professional have bad manners rude and quirky. They stare or act apathetic and importantly will not accept complaints and discourage returns And this gets me—they turn their lights dim or off in and outside. Hard to know they are open at all. No address no parking. They do everything they can to discourage business and then wonder why online stores are preferred. I much prefer a large corporate physical store like Walmart or target for personal service.S ome small store owners feel entitled to your business even if they live elsewhere and don’t invest in the community