Supporting local businesses has always been something that matters to the average consumer. Yet, consumers often have to choose between the convenience and cost savings found at national retail chains and eCommerce platforms, and shopping independent, local retailers with a differentiated assortment but often premium prices. During the pandemic, the role of eCommerce was imperative for every retailer to survive, both for small independents and major national chains. On the flip side, for many communities, there was a renewed focus on supporting local businesses and ensuring that they survived the challenges of the pandemic.
Now, post-pandemic, I was interested in understanding if US consumers are still prioritizing a focus on local businesses when deciding where they shop. I also explored how consumers define “local” as they make decisions about what they buy and where they shop. Today, I will share highlights of some of the findings from a proprietary study of over 300 US consumers, fielded by PDG Insights, that explored consumers' attitudes and perceptions around shopping local retailers.
How do you define “shop local”?
Short answer – shopping within 15 miles of home. When thinking specifically about shopping at local businesses, the answer is clear:
Thirteen percent (13%) of shoppers say that “shopping local” means shopping at businesses within my immediate neighborhood.
More than 4 of 10 shoppers (44%) consider “shopping local” to mean shopping at stores within their immediate city or town.
An additional 30% say it means shopping within 10 to 15 miles of their hometown.
This is important because it reinforces that 9 of 10 shoppers consider “shopping local” to mean shopping within their neighborhoods, cities, or a 15-mile radius of their home.
What is a “locally owned” business?
Consumers’ definition of what they consider a locally owned business is clear. Independent merchants, or retailers, that live in the community, is the key defining element of a locally owned business. One interesting thing to note is, the larger an independent merchant or retailer gets, the less likely it is to be perceived as being locally owned. While still more likely to be viewed as locally owned than a national chain, as a company grows to include a state-wide or national presence, fewer consumers agree they are locally owned.
What do you consider locally owned?
Having a physical presence in the community is important too. Local companies solely based online don’t get the same recognition as those with physical locations. Shoppers are clear, corporately owned, national chains are not viewed as locally owned, and unfortunately, locally owned franchisees of national chains are viewed similarly to the corporations they represent.
What types of merchants are most important to shop locally?
When asked how important it was to visit locally owned retailers and merchants in different areas, shoppers were very clear to prioritize restaurants, grocery stores, and certain service providers, including health and beauty services, as well as automotive repair.
That doesn’t mean that local, independent merchants in other sectors aren’t important to visit. In fact, more than half of consumers stated that it was important to prioritize local merchants and retailers in every sector explored. This reinforces that local initiatives to remind consumers about great local stores with unique offerings, that are differentiated from national competitors, is important. Consumers care about supporting local businesses yet might not know all the alternatives available to them.
Why does shopping locally matter to consumers?
Every consumer is different, and even the reasons to shop locally may differ by type of retailer or merchant. However, a few key themes rise to the top in why consumers make frequenting locally owned businesses a priority:
Community support and growth: Consumers understand that shopping locally keeps money in their local economy and creates job opportunities and other benefits for people in the community. They like that they know the people that work at the stores but also have the chance to make new connections. At the most basic level, 82% of consumers said they like supporting their local economy.
Unique products and assortment: People believe they can find unique products that they can’t find anywhere else when they shop locally. More than half of consumers (56%) feel a personal connection to the brands they are buying, and can’t always get that from other places.
Convenient for a cause: Two-thirds of consumers believe it’s more convenient to shop locally, and 56% feel there is a smaller environmental impact when they shop locally. Staying close to home, with retailers that source close to home, should lead to a smaller carbon footprint.
Post-pandemic, consumers still feel strongly about supporting their community by frequenting local merchants and retailers. In future posts, we will cover how people prioritize local brands across retail outlets and even dig into how attitudes may differ among different demographics.
If you want to learn more about PDG Insights “Shop Local” studies or explore how we can help you with questions about your consumers, feel free to contact me here. Reach out with any questions!