As I write this, I’m sipping coffee from my local coffee shop. I walked past two chains for this cup. Why? Thanks to the strong Think Local First campaign here in Santa Cruz, when I need to buy something, I find myself thinking, “What is the locally-owned option?” I didn’t always think this way. Often, I used to assume the big chain store was going to have the best price and selection. I wasn’t really thinking at all. I was on consumer autopilot.
Then these stickers featuring our city’s landmark lighthouse and Think Local First started appearing on the doors and windows of downtown shops and restaurants. Seeing the badge, I found myself thinking about that real person, the fellow member of my community who owns that business. Before, it had just been another store, another option.
Over the 2011 holiday season, the Think Local First organizers put together a strong campaign declaring a peak week of holiday shopping season, Local Holiday Shopping Week. It was everywhere—from newspapers to social media feeds. Downtown had a particularly festive air that week as resident retailers held special events. Community and connection were strong enough motivators for me to take their think local suggestion, but when I started learning the specifics of the economic impact these kinds of campaigns can have, I made shopping local my top spending priority all year.
SMALL BUSINESS, BIG DEAL
I sat down with Karl Heiman and Michael Olson, two organizers of Santa Cruz’s Think Local First campaign. Heiman explained that the biggest economic impact chain stores impose is the “dollar leakage,” i.e. the tendency of most of dollars spent at national chain stores to leave the community. Study after study reveals similar results. A 2011 report out of Portland, Maine found that $100 spent in locally owned stores yielded $58 to the community versus $33 from national chains.
Where big box revenue tends to drain from the neighborhood and out of the state to corporate offices and non-local suppliers, revenue from local stores is likely to keep circulating close by as they rely on local vendors and utilize local services for banking, accounting, repair, Internet and advertising. Meanwhile, the primary contribution back to the community in a national chain store is simply the wages and benefits paid to employees.
Another of the biggest economic benefits to a vibrant vicinity lined with independent stores is the strong tax base and savings in infrastructure and services to local governments. Independent businesses tend to set up shop in existing structures, such as downtowns, and make more efficient use of already existing public services. Meanwhile, big box stores often require development of outlying real estate, necessitating new service infrastructures like roads and utilities. Some local governments, including Santa Cruz and those above us in Washington, place so much value on supporting homegrown operations that they have established a 5 percent leeway for local businesses bidding on government projects. In other words, if a local business comes within 5 percent more than an outside bid, officials may choose local even though it’s not the lowest. The project generates more community jobs and the state gets the tax benefits of the related sales.
Recirculation of dollars is only one way independently owned businesses create a solid economic foundation for a community—these are the real job creators who not only generate opportunities within, but make employment possible all along their supply and service chain. They also help bring in tourist dollars. When people travel, they want to go to somewhere, not just anywhere.
They want to experience the unique character of a place, have the signature dish, ride that terrain, see that particular style of artisans work.
So much so that one box retailer is attempting to craft such a scenario in their stores. I just saw an ad for a new department called The Shops at Target, a concept that plucks products from small businesses around the country and incorporates them in the mix for a “unique hometown shop- ping experience.” Even Target recognizes the value in a little local flavor.
OPPORTUNITY ABOUNDS, LOOK NO FURTHER
With the holiday shopping season coming up, now is the time to start focusing on a shop local campaign in your area. If one already exists, it is likely run by very dedicated and overworked volunteers who will be thrilled for more support. Get involved. One credit card company may be able to help.
The big stores have Black Friday. The online merchants have Cyber Monday. American Express felt locally owned businesses needed a day (Nov. 24, 2012, smallbusinesssaturday.com), too. Because so many of its customers are independent business owners, American Express wanted to encourage holiday shoppers to spend at least some of their dollars with locally owned retailers. In doing so, the company provides proprietors with tools, such as signage and social media strategies, to market Small Business Saturday in their area. In past years, customers who spent $25 at local independent retailers on this day received a $25 credit on their statement. Stay tuned for this year’s incentives.
If your area still needs leadership in educating consumers on the positive impact shopping local can have on their community, here’s an overview on how to get started. For the nitty-gritty, visit American Independent Business Alliance (AMBIA) and Business Alliance for Local Living Communities (BALLE).
1) Learn about all the benefits of shop local programs. I only have room for the tip of the iceberg in this article. There is enough information on the subject for BALLE to host an annual five-day conference.
2) Don’t reinvent the wheel. Many communities across the country have done it. Google “shop local” and sites for campaigns all over the country come up. Check out programs in communities similar to yours to find out what’s working for them.
3)Find the leaders. Shop local programs tend to start with a group of 4–5 people passionate about and dedicated to the cause. Find these people. It may be they just don’t know it yet. Start sharing what you learn about the power of shop local campaigns.
4) Brand it well. Your campaign needs a great slogan, short and sweet that pops up in people’s minds when they shop the way that Santa Cruz’s “Think Local First” does for me. Create a logo that tugs at residents’ sense of place.
5) Define your membership. What does local mean to your campaign? In Santa Cruz, franchises are not included.
6) Create your campaign kit. Your welcome wagon for business joining your alliance. Their window decal, flyers for customers, etc.
7) Set a kickoff event. A rally, an economic barn raising for the community, a big event letting people know about your mission.
8) Build the community. The fun of the kickoff event is just the beginning. It takes a whole village to create an effective shop local campaign, the best of which are those that form an alliance of businesses that work together to educate and engage consumers, local media and government leadership.
Shop local campaigns are, I think, the most successful strategy for local communities to recover from the economic turmoil, inoculate against future downturns and shift from mere survival to economic thrival. As Heiman points out, “Local business owners are the glue of the community.” AOB
Originally published in Action Outdoor and Bike Magazine