Teacup

Welcome back from the holiday season to the start of a brand new year and new decade! I’ve just back from Gold Coast, Australia (which is always so beautiful) and now it’s back to business as usual

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To start the year off, I want to talk about the ‘buy local movement’ where consumers have started straying from corporate giants to support the smaller guys. Over the years, through expansion and franchising, big-brand national chains have developed a presence almost anywhere we travel. However, consumers are saying enough is enough – they want to support small independent retailers that offer a unique experience and a sense of community.

Why is buying local so popular?

According to the Think. Shop. Buy. Local. campaigners, buying locally from independent retailers directly helps to maintain your local economy. “For every $1 spent at local businesses, 45¢ is reinvested locally. Non-local purchases [through national chains] keep, at most, 15¢ in your local community,” they say.

They also point out that while local businesses engage in many other services in the community (such as accountants, printers and couriers), corporates tend to concentrate these services at one single source for all of their stores via the head office. Buying locally is also better for the environment as many products are sourced from within the community instead of being shipped over from across the country and overseas.

Consumers don’t want to fill up corporate pockets

Senior fashion editor of WGSN Sue Evans also agrees that local shops are making a comeback, but perhaps not only to support the local economy. “Customers are really recoiling at the idea of lining corporate pockets,” she says. “They’re turning to independent retailers in tune with locals and the local area” to support businesses that are still growing.

Corporates having a go at being Local

Big businesses are also realising the rising popularity of this trend  and are not about to give up without a fight. In July 2009, coffee giant Starbucks opened it’s first pilot ‘localised’ store, named 15th Avenue Tea & Coffee, disguised as a local coffee shop without any association to the household Starbucks brand. While other small businesses were outraged at their efforts to portray themselves as being local, Starbucks isn’t alone.

“The International Council of Shopping Centers, a global consortium of mall owners and developers, is pouring millions of dollars into television ads urging people to ‘Shop Local’ — at their nearest mall,” reports Stacy Mitchell for Boulder Weekly. “This represents desperate bids by shopping malls to survive the recession and fend off online competition.”

According to the studies done by the firm Civic Economics, money spent at chain stores, such as those at shopping centres, provides less that one third the amount that money spent at locally owned independent stores would provide back into the community.

Department store chain Macy’s have taken a subtler approach through their ‘My Macy’s’ localising initiative to bring in products that are tailored to the needs of the community of it’s existing stores. However, critics still claim that although they may be altering their product mix in hopes of more targeted sales, the chain is still carrying out their ordering, merchandising, shipping and all other operational tasks from their head office, thus still not contributing any more to the local communities.

Localising: easy route to social responsibility?

Critics have claimed that although chains have learnt that consumers are increasingly motivated to support companies that they perceive to be acting responsibly, companies are tossing around the word ‘local’ into their marketing as a cheaper alternative to convey true ethical responsibility.

“Local is one of the lower-hanging fruits in terms of sustainability,” says Michelle Barry, senior vice president of the Hartman Group. “It’s easier for companies to do than to improve how their employees are treated or adopt a specific sustainability practice around their carbon footprint, for example.”

Consumers want authenticity

Writer and business consultant Joseph Pine says that authenticity is the new level of economic value to the consumer. Their desire for the authentic goods become one of the key buying criteria in which consumers chose what they are going to buy and who they are going to buy from. However, according to Joseph “no one can have an inauthentic experience, but no business can supply one that is truly authentic.”

Although a business may claim to be 100% local, there will always be a certain degree of big business involved. The machinery they use, the bank they do business with, the telecommunications the business uses. All those things contribute to being inauthentic.

Is being Local really that big of a deal?

According to market research company Mintel, an average of one in six adults (17%) try to buy local products and services as often as possible. “These ‘True Locals’ are willing to pay a higher price and they’ll even buy local if competitive products are better,” says Mintel researchers.

But the overwhelming majority of shoppers don’t feel so strongly. Mintels research showed 30% of shoppers would purchase locally but don’t know where to find them, and 27% of shoppers don’t care where their food and services come from.

“We found that although the ‘buy local’ mantra has gotten strong media coverage and government support, most people haven’t yet incorporated it into their lifestyles,” says senior Mintel analyst Krista Faron. “Nonetheless, local products offer unique benefits and are more accessible than ever before, so we think the local movement has relevance with today’s consumer.”

Is buying national better?

Despite the many benefits of buying local, national chains aren’t without their perks. Chain stores offer the advantages of convenience, low cost and consistency.

“One way corporations can be ‘local’, too, is to stock a token amount of locally grown produce, as Wal-Mart has done in some of its supercenters,” says Michelle.

“The chain’s local food offerings are usually limited to a few of the main commodity crops of that particular state — peaches in Georgia or potatoes in Maine — and sit amid a sea of industrial food and other goods shipped from the far side of the planet.”

“Yet, this modest gesture has won Wal-Mart glowing coverage in numerous daily newspapers, few of which have asked the salient question: Does Wal-Mart, which now captures more than one of every five dollars Americans spend on groceries, create more and better opportunities for local farmers than the grocers it replaces?”

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What do you think of buying local? Do you think it will better our economy or do you think it’s just a tagline businesses are using to profit off consumers?

Is it unethical for big businesses to try portray themselves with a degree of ‘locality’?

This entry was posted on Wednesday, January 6th, 2010 at 6:23 PM and is filed under Branding. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.