Although online shopping offers the allure of a vast and exotic global marketplace, a growing number of consumers are choosing to shop close to home. That’s because the “buy local” movement has grown in popularity among businesses and consumers alike – far beyond local produce and other foods.
While there is no universal, standard definition of “local,” consulting firm A. T. Kearney found 96% of U.S. consumers describe local products as those produced within 100 miles from the point of sale.1Firmly Rooted, the Local Food Market Expands. A.T. Kearney. October 2015.
Retailers increasingly source local products to streamline logistics and reduce transportation costs. Both retailers and suppliers build goodwill by investing in the local economy, and consumers feel good for supporting people and jobs in their community.
One study found that by spending $100 at a local business, $68 stays in the local economy. By spending the same amount at a large business, only $43 stays in the local economy.2Bealocalist.org
Factors contributing to the “buy local” movement
- Local products reflect consumers’ values: The “buy local” movement has made retailers more willing to partner with local suppliers because these suppliers offer mutually beneficial, strategic value. Sourcing local merchandise helps retailers adapt to major consumer trends, including: superior customer experience through diverse product assortment, sustainability, and jobs in the community. As a result, the playing field is more level. Smaller local suppliers now have a bigger voice and more negotiating power than ever with retailers because their products attract shoppers.
Millennials value – and create – local products: Millennials value the personal, customized shopping experience of buying local, handmade products. Roughly 76% of upscale Millennials (with a household income of $75,000 or more) and 73% of the total generation say buying American products is important to them.3Millennials in 2015: Retail Deep Dive. Nielsen. 2015. Millennials also value authenticity and self-expression, and want to wear and own things that will set them apart. This lucrative generational cohort also accounts for more than half of the artisans making and selling their own goods.4Howard, Daphne. Buy local: Not just for foodies anymore. Retail Dive, September 29, 2014.- Local marketing technology and data: Innovative technology, including location-based apps and search engines, help local businesses attract foot traffic as well as web traffic. One Retail Dive article asserts, “If you don’t show up on Google – or think on a local level – you are going to lose business. Consumers are on the move, and brands have to start to adapt to their behavior.5Murphy, Ian P. Going local: How local search information is crucial to retailers’ success. Retail Dive. September 2, 2015” In addition, using location-specific, or geopositioning, data in real time can help local companies offer timely specials through mobile marketing, such as ads or digital coupons.
- Personalized service: One timeless retail principle is the need to communicate well with consumers. This principle is particularly important today, as a company’s relationship is now between the consumer and their vast network of other consumers. Savvy local product suppliers and retailers offer superior, personalized customer service to build lasting relationships. Their attentive service makes shoppers feel understood, cared for – and willing to spend.
Buying local has gone beyond just a movement, and has become the way of doing business for many retailers. Stay tuned for success stories that showcase just how well some retailers have done since incorporating a “buy local” strategy.
What factors have you seen that have contributed to the “buy local” movement?