Thursday, January 21, 2010

'Buy local' campaigns lack lasting results; here's alternative advice, and a grammar lesson

We had an item the other day on predictions for the biggest small-town business trends of 2010. One of them, "shop local" campaigns, struck us as a bit stale. In today's Wall Street Journal, Diana Ransom reports, "Recent research shows that buying local campaigns provide only limited and short-lived results for small businesses."

So what are small-business owners supposed to do? Focus on the fundamentals, such as customer service and product quality; broaden the definition of "local" to include imports sold locally; and offer distinctive or even unique products and services that make customers "view your shop as unique and deserving the premium that small businesses often need to levy," Ransom writes.

Good advice, it seems, but we must point out that Ransom and her editors need a lesson in the meaning of the word "unique," which has become one of the most overused and misused words in American English. She writes, "offer unique or even one-of-a-kind products and services." That's the same thing!

7 comments:

howard said...

Does the "shop local doesn't work long term" and "improve your business" sort of beg the question that if you don't have a good business in the first place, all the shop local in the world isn't going to work?

I mean, I don't think you can say "shop local" doesn't work if you're not giving customers good reasons to come back in the first place.

No marketing message sticks if the consumers aren't ultimately satisfied with the end result.

Marketing messages and actual products and services must be aligned or you'll fail. That's true of any business, any market, any advertising campaign.

That fact is, shop local campaigns are absolutely essential to healthy local economies, but so are good sound business practices by the local businesses.

It's a rather false comparison to say they don't work if what the message is selling isn't working in the first place.

Deb Kozikowski said...

For local farmers the Buy Locally Grown and Be A Local Heroare very successful here in Massachusetts.

For local small businesses the Shop Local is a whole 'nother story. They do work and they do not always make the distinction between locally produced products (not only farm produce, BTW).And frankly, I believe that is the real error in these ad campaigns. People are hungry to find locally produced items they can purchase. Stocking shelves with local products (soaps, soda pop, jellies, salad dressings, jewelry... it's amazing what people make out there) and double up on that Shop Local theme. They'll likely grab the attention of more not less customers.

rosemary said...

Howard, that's a point I have been trying to make to my big city friends who hate WalMart. I , too, love the the idea the quaint small town shop. But when those shops have limited business hours, refuse to hire disabled employees, don't carry a variety of merchandise and jack up the prices on what they do offer, etc. etc. etc., the big discount stores start looking pretty good. I think attending to those details is what made them explode in popularity in the first place.
I love my little downtown and will support it to the extent I am able, even if I must pay a little more. But don't provide lousy selection, prices and service and then whine about loyalty.

MShuman said...

Diane Ransom's article actually does deliver on the headline. She is totally unaware of the biggest promoters of these campaigns -- BALLE and AMIBA -- and instead cites trivial operations like the 3/50 Project or local-investment promoters like the Slow Money Alliance. In short, she doesn't know the field, and hasn't done the research.

We actually have a lot of evidence from our networks in BALLE that buy local campaigns work very well. But you can't do this as a single business (Ransom cites an example of how a business owner got exasperated doing this). You have to do this as a network of local businesses.

Bellingham, Washington's Local First campaign—now widely copied around the United States and Canada—uses festivals, store signs, posters, advertisements, and coupon books to motivate residents to buy local. An independent survey of Applied Research Northwest has found that 69% of Bellingham consumers are now paying attention to the local character of businesses, 58% have begun localizing their purchasing habits, and business proprietors regard Local First as one of the most compelling reasons they are thriving. Sustainable Connection’s energy program has mobilized 1 in 10 residents to buy local “green power”—the second highest percentage in the United States. The number of farmers in surrounding Whatcom County marketing directly to consumers has increased 44 percent between 2002 and 2007, twice the state-wide rate. The value of direct sales—a key strategy for boosting farmers’ income—has increased 125 percent over the same period, quintuple the state rate.

Ransom's other evidence? One is a survey that just one in six adults are prepared to spend more on local goods and services. That data has nothing to do with her thesis. It's a national number, that's stronger is areas where there is a local campaign and weaker in areas where there isn't. The evidence we see is that this number is growing. And, heck, 16% national isn't bad.

Her other evidence is the OPINION of a Paul Kurnit, a business professor at Pace University. He also has done nothing in this field.

The bottom line is simple: Keep localizing folks, and growing local wealth. This works ESPECIALLY well in rural communities where leaks are especially large.

For more information, you can contact me at www.small-mart.org

tim said...

I thought the grammar lesson was going to be "shop *locally*." I guess that's a lost cause, like "15 items or *fewer*" for the express-lane register.

Becky McCray said...

Al, I am the author of the original trends article you referenced indirectly. You said my inclusion of shop local struck you as a bit stale.

Here is what I actually wrote about shop local:
"3. “Shop local” campaigns grow up and out: 2009 was the break out year for Shop Local campaigns. We’ll see even more in 2010. What started with support for retail and downtown businesses will grow up and out, to reach other small-town businesses. I expect to see more surveys of what local businesses need, and more attention paid to ways to help those businesses improve, as a part of the whole local economy."

The discussion here in the comments is certainly running along these same lines. Deb mentioned reaching different types of business and products, and Howard and Rosemary mentioned the need to improve small town businesses. This is exactly how I think "shop local" campaigns can grow up and out.

I appreciate the terrific resource for discussion you're provided here. I'm glad to see so many people engaged in the critical questions facing rural areas.

ILLIST said...

The author suggests a strategy that "broadens the definition of 'local' to include imports sold locally". This flies in the face of economic development as seen through the lens of economic base theory. The idea for economic development is to either sell your local goods to markets outside your area or to people who bring money from outside your area or you substitute your local goods for goods that you previously had been importing. The goal is to bring money into the local economy or slow the exodus of money out of your local economy.

Also, if you 'broaden' the definition as the author suggests your redefining the word 'local' to 'non-local'.