Get started with Radius

We'll walk you through our Radius Revenue Platform and show how it can be used to blow past your revenue goals.

Demo Request Submitted

Thank you for you interest! One of our account executives will reach out shortly to schedule a demo with you.

Why the Going Local Trend Is Growing, and What It Means for Big Business

As more consumers choose to shop local and more entrepreneurs choose to open local businesses, there’s no question the going local trend is on the rise. We interviewed Rex Hammock, founder of SmallBusiness.com, to find out what factors influence this trend, and the trend this movement will have on the business economy in the U.S.

It didn’t take the “local food” (locavore or localvore) movement  long to go from an exotic concept to becoming a mainstream fixture on thousands of menus in restaurants, coast-to-coast. Next up: Everything else, local. Products made locally, brands that sell exclusively through independent stores, or small shops that understand and serve the unique needs and special tastes of a local market. Localvore becomes localshop in 2014.
Rex Hammock

rexIn an article (cited above) published on SmallBusiness.com, Founder Rex Hammock postulated 10 Bold Small Business Predictions for 2014. One of his predictions follows a growing consumer trend toward going local, and we interviewed Hammock for an in depth perspective on why the local movement will pick up more steam than ever in 2014. Hammock gave color to a couple changes in consumer buying behavior that indicate a momentous turning of the tides in the way Americans make purchase decisions.

Foodies and the restaurants who serve them have been quite visible in leading the awareness of the benefits of eating local. The term “locavore” was even word-of-the-year in 2007. Some of the credit for pushing this idea beyond food must go to the folks at American Express who spent lots of money promoting Small Business Saturday. While their tag line is “shop small” the reality is that most small retailers are also local.
Rex Hammock

Small Businesses Have More Affordable Access to Resources

The increasing development of technology advancements–such as Revel Systems’ POS solution, Squarespace’s website builder and Act-On’s marketing automation software–designed to serve small businesses has given momentum to a modern local movement that extends far beyond its roots in slow food. As small businesses gain affordable access to resources that were previously too complex and expensive to fit their schedules and budgets, such as customer relationship management and responsive web design, small businesses owners are able to build customer experiences that exceed those of their bigger competitors.

Patrick Kitano, Founder of BNN Funding–a modern take on lending that upends the traditional crowdfunding model by syndicating national campaigns across 350 cities with advocate support in each city–and Administrator at The Breaking News Network, identifies seven reasons consumers choose large online retailers over local shops and brick and mortar retailers:

  1. Convenience of a one-stop shop

  2. Trust that the merchant is reputable

  3. Inventory in the form of an extensive product catalog

  4. Best price

  5. Product reviews

  6. Instant delivery, or local pickup

  7. Customer service in case something goes wrong

When small businesses embrace technology and social media, they can deliver many of these same advantages. Many small businesses have reviews on Yelp, in-store access to online catalogs to allow instant ordering, and access to local delivery services that don’t require cross-country shipping.

However, marginal increases along a couple of potential advantages do not impart a lasting competitive advantage for small businesses. Local stores will never be able to innovate as quickly as a tech giant like Amazon who isn’t just first to access technology advancements, but first to invent them.

In a world of growing access and increasing options, how and why will small businesses win?

Local Businesses Understand Local Audiences

Hammock points to local businesses’ unmatched understanding of local audiences, and their corresponding ability to cater to those audiences:

I’ll take an example from a niche I love: bicycling. It’s easy to shop for a bike at a wonderful store like REI, which I think runs it’s stores with impressive attention to the local needs of its customers. However, the people who own the smaller bike shops in town are the ones who cover the bases, ranging from hardcore road bikers to the urban-commuters, like me.

And while it’s hard to “shop local” for a bicycle that is assembled from parts made primarily in Japan or Europe, it’s easy to have one assembled locally and cared for locally.

Unlike food where the emphasis is on actually growing the food locally, the “shop local” movement can be more about curating products for a local customer–understanding the needs, etc. That said, I was with my daughter before Christmas shopping for my wife when she noticed a line of hand lotion with the name “local” and “Nashville” attached to it. I have not idea what made it local, except for the claim of being made nearby, but I purchased it nevertheless. Turns out, it’s nice, according to my wife.

Consumers Look Beyond Brand Names

Research from the Pew Institute comparing the trust people have in big business (none) vs. small business (lots) makes it easy to understand why, when they understand the “value” of shopping local vs. shopping at a big box retailer or online, most people will tell you they prefer local. Unfortunately, few small businesses articulate value and shoppers (including me) opt to make decisions based on price and convenience.

One area, however, where I’m seeing the possibility of some break-out to the “locavore” level of other market niches can be closely correlated to the “Maker” movement. Short run manufacturing provides fashion designers to serve the tastes of a region. If you want an example, visit my hometown of Nashville and discover a new version of what Music City fashion is these days. Forget your ideas that its all about rhinestones. Today, local designers are some of the hottest “hipster” clothiers in the country. Of course, it helps having Taylor Swift and the Black Keys and Jack White wearing your designs–but the designers were already here finding a niche with the locals before the big stars made a store like Imogene & Willies here a destination shopping location.
Rex Hammock

As the world of endless options renders consumer trust a fickle and nostalgic illusion, craftsmanship and culture grow into important measures of value. Where a large brand name used to suffice as the extra value a company added to the products they sold, today’s brand-disillusioned customers gauge that extra value in customer experience. As Hammock pointed out, the Nashville design industry has born a recent boom because they offer local experiences to global customers. Local makers offer unique experiences because they can add unique context to locally-made products that larger brand retailers cannot. A local craftsman can weave a story about the products he or she makes in a very different fashion than Yelp reviews and online forums can. Where brands used to have to rely on advertisers to produce campaigns to grow exposure and convey brand values, local businesses are more enabled than ever before to tell their own stories.

Pinterest boards and Twitter feeds and Facebook newsfeeds and thousands of other new media outlets showcase goods and services from distant cultures to audiences around the world, and retail solutions like Paypal, Shopify, and Square actually bring them around the world. Small businesses no longer offer goods and services just to local audiences; many of them court customers that will never set foot in their stores.

Large online retailers can never duplicate the goods produced by local makers, but they can sell them.

Big Business Advocating for Small Business

As the pendulum of consumer behavior swings further in the direction of locally owned businesses, large businesses may find themselves in competition with the Fortune Five Million. The big businesses that win will be the businesses that partner with local makers. Large online businesses like Amazon have plowed through a number of brick and mortar behemoths, including Borders Books and Blockbuster, and in their wake a forest of small businesses has thrived.

Small businesses are growing savvier and consumers are validating their existence more today than any time in recent American memory. The large businesses that don’t understand local markets the same way that small businesses can face a disadvantage, and to counter it, they’re going to have to get a lot smarter about small business America.

Recommended Articles

Predictive Analytics
8 Expert Answers to "What is Predictive Analytics?"

As more consumers choose to shop local and more entrepreneurs choose to open local businesses, th...

John Hurley

Predictive Analytics
Determining Your Predictive Marketing Use Case

As more consumers choose to shop local and more entrepreneurs choose to open local businesses, th...

John Hurley

B2B Marketing
Pepsi vs Coke: Why Marketers Shouldn’t Be Fooled By the Technology 'Taste Test'

As more consumers choose to shop local and more entrepreneurs choose to open local businesses, th...

John Hurley