Wednesday, May 5, 2010

Small business and the shop local movement

Once upon a time in towns and villages and small cities all over the United States, people shopped at stores owned by their neighbors. People ate food that came from nearby farms. Do-it-yourself types frequented local hardware stores as much for the free coffee and advice as for boxes of nails. If people needed a loan, then the bank president, or at least the loan officer, knew them. Of course this was before the creation of the superstore. It is now possible to go to giant stores stocked with a tremendous variety of low cost items. We can shop for eggs and milk, and then we can step just a few isles over to shop for clothing or office supplies, or electronics or furniture, or auto parts or just about anything.

While the megastores may have big selections and low prices, they have their own price, one that is not so obvious. Grocery stores, pharmacies, banks, hardware stores, dress shops, children’s clothing stores, restaurants, and the like used to be part of the community. Now the local managers of these national and international corporations may be neighbors, but the stores themselves have no ties to the community. Decisions about our towns and our lives are made in corporate headquarters far away. The profits made by the stores are sent to corporate offices in other places. The neighborhood grocer or drug store or hardware store can’t sponsor children’s baseball and softball leagues, and they can’t donate to PTAs because they don’t exist. Neighborhood children can’t get jobs because all of those everyday low prices don’t leave enough margin to pay students to work after school. This is changing.

Get ready for the backlash
People are getting tired of shopping in huge stores. They are beginning to recognize the Faustian bargain implicit in purchasing only for low prices. People are longing for the community they lost when the locally owned stores closed. They want to know where their food was grown.

There are entire movements dedicated to the concept of “shop local.” For example in Austin, TX, the Austin Independent Business Alliance has the motto, “Local Spoken Here,” and they include this quote on their website.
Shopping at locally owned businesses puts three times the dollars into our economy. A landmark study found that of $100 spent at a local business, $45 stays in the community. But that same $100 spent at a chain store would put only$13 in our local economy. Don't give your money away, keep it in our community.
The movement recognizes that it makes sense to pay a little more for quality too. Michael Pollan, in his book In Defense of Food, observes that it might be a good idea for people to spend a little more on food if it enables them to eat higher quality food.   The idea of locally grown food is also becoming more appealing. Many consumers around the country are shopping at farmer’s markets or joining farms involved in Community Supported Agriculture (CSA). Slow Food USA is a national organization that encourages eating locally produced food. Another organization with a broader focus is the Slow Money Alliance.

Consumers are also embracing new businesses that understand the value of shopping local, high quality, and local sources. One of these businesses is Greenling is a grocery service that sells certified organic or local and sustainably produced food and delivers it to your door for free. Greenling is more than that though. Greenling embraces the idea of community and recognizes that its customers are its most valuable resource. Greenling hosts periodic get-togethers to showcase food and vendors, and it encourages customers to submit recipes or even to blog about their experience.

Food is gone as soon as we consume it, but the idea of paying more for quality for durable goods should make sense to everyone. The same concepts of paying for quality and staying local apply in other areas too. Consider buildings. The US Green Building Council (USGBC)  recognizes that using local building materials makes more sense than paying to ship supplies long distances by including local sourcing in the LEED rating system.

What does this all mean for small business?
Small businesses should benefit from this trend for one simple reason. They are the locally owned stores and businesses that consumers are returning to after their fling with the megastores. If you as a business owner want to take advantage of the trend, then you need to understand why people want to buy local, and you need to support them so that they can support you. Here are two key points.
  • Customers buy local because local businesses are part of the community: Be part of the community. Be a friendly neighbor. Learn the names of your regulars. Support community activities like PTAs, softball and baseball teams, high school sports teams and local charities.
  • Customers buy local to support the local economy: Support the local economy. Buy local. Give students after school jobs. Be an active part of the local business community.
As people continue to become disenchanted with big faceless corporations and return to local merchants, it is up to you to welcome them back and to make them glad they came home.

No comments:

Post a Comment