New Study Shows What Makes Shoppers Buy Local
By Carol Tice Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
What makes shoppers shun the big national chains and shop on their town's main street? A new study from online marketer WebVisible identified the top reasons folks choose to shop their local merchants, and it's got useful information for any small business owner who aims to lure hometown customers.
The survey Webvisible commissioned with market-research firm Synovate eNation asked 1,000 Americans, "What makes you choose to patronize a small, local, independent business over a larger chain?" The study gave seven possible reasons.
The three top answers:
- I want to support my community
- The local merchant is more conveniently located
- The service is more personal
No big surprises there, but each of these answers suggests ways small businesses can move to encourage sales. Taking these one at a time:
The buy-local crowd. How are you connecting with customers who actively think about keeping dollars in their own communities when they shop? Ideas to get more on these customers' radar include forming a buy-local promotion with other businesses, having a town-hall about the impact of shopping local, or sponsoring a screening of a movie such as the documentary, Walmart: The High Cost of Low Price. Do your marketing materials talk up your contributions to the community? Help customers connect the dots.
Convenience. Lots of Main Street merchants think they're conveniently located. But are they, really? I had a heartbreaking conversation recently with the owner of a great family-Italian restaurant that was closing in the community where I live, after about a year in business. This was an experienced restaurant operator -- he owned two franchise pizza restaurants already -- yet he couldn't make a go of it with a restaurant that had earned local raves for some of the best pizza around.
Why? Not enough parking in the small shopping center where he opened, he said. Diners had to compete with movie-theater patrons for the few available slots, at around the same time of day. Translation: his restaurant was often inconvenient to visit, even though it was right in the center of town.
If there's more you could do to make your store easier to visit, work with other businesses, your local municipality, civic organizations and others to try to improve access. Do some research and see if you're open enough hours, or the right hours, to catch shoppers when they have time to come downtown. I have a new frozen-yogurt place in my town with a great independent operator...but every time I drive by, they seem to be closed. Find out how your customers define "convenience" to build your customer base.
Personal service. I have yet to talk to a small business owner who thinks they don't have great customer service. But customers tell another story. On review sites and local forums, the fangs come out about rudeness, sloppy followup, or a just-don't-care attitude.
Also, note the answer doesn't say "good customer service," it says "personal" service. Which ties to another popular answer -- a third of study respondents said one of their primary reasons for shopping local was that they knew the owner or an employee. That connection makes the service more personal, and is something big stores just can't replicate.
So get out in your community and get known! Make those personal connections.
Now's the time to build your company culture of personal service. As the economy turns, big companies are getting focused on improving customer-service levels, as they know it'll drive their growth. So stay ahead of that curve.
Some really heartening news: Only 17 percent of respondents said they don't care to patronize a smaller business over a larger chain. Sounds like the buy-local movement is really going mainstream.
Another piece of good news for small-business margins: locally focused customers mostly aren't price focused -- only one-quarter of respondents said they shopped locally because prices at small businesses were lower. They are more quality focused -- 32 percent said a top reason for shopping local was "The local merchant offers a higher quality product or service."
