For years now people have been attempting to encourage consumers to “shop local” and “shop small”, using the terms interchangeably along the way. It’s hard to argue with these movements though because of course you want to shop locally, of course you want to shop small, and of course you want to invest in your own local community over feeding the wallets of faceless board members in another state. The Millennial generation is becoming a big driving force in the economy and they are choosing, en masse even, to spend their money with companies that share their beliefs and are involved in their communities, even causing a sub-group called the “Maker Society” to grow. So what’s so wrong with the shop local/small idea as it’s presented and why is there a difference?
The terms “shop local” and “shop small” are really two different things
Encouraging people to “shop local” for everyday products seem a little daft when you think about it. The average customer doesn’t want to pay a premium for things like toilet paper, or seasonings for cooking, or cleaners; all of those things are consumable requirements rather than exciting buys. Buying local is great for locally sourced products like produce from a local farm, a locally owned restaurant, or a local boutique selling products made by locals. Paying a premium on consumable items like toilet paper makes more sense to purchase form a larger store that can source the products at better prices. Small, local stores that sell commodity items often mark up prices due to convenience of location. Small towns often rely on these locally owned stores because a there may not be a WalMart or Target in their area.
With that in mind, big box stores are providing a service in that they let you get all of that boring stuff in one place for cheap, because of their buying power, and allow people to save money to “Shop Small” for the fun stuff.
To encourage people to “shop small” is vastly different than “shop local” and the internet can be credited with a big portion of the responsibility for that. A few decades ago the idea of shopping locally was almost always directly linked with being small. Of course there were some business that would expand from a single location to a couple but even then those businesses were still smaller business than big national chains. Today the internet has made it so that a in a 20 home neighborhood there could be 20+ businesses selling everything from boutique children’s clothing, motorcycle face masks, or custom art work. The interesting thing about these businesses that may be operating in the home right next to you is that they may not be considered part of the “local” in “shop local” simply because they operate primarily online taking clients or shipping product as far away as Italy or as close as the next state over. Etsy.com has become a large marketplace for many shop small businesses.
Small Business Saturday
The shop small campaign gained attention when American Express launched a campaign for the day after Black Friday. The Small Business Saturday special was promoted as a holiday to spend money at local business who offered “Shop Small” items. In 2012, for example, customers received a $25 credit if they spent $25 at a small business using an AmEx card. In 2013, it offered a $10 credit, and last year, the reward for participating was a $10 credit that could be redeemed up to three times. American Express eliminated the credit last November and began to over promotions and tools to small businesses directly. Many local businesses enjoyed the extra bump in sales that the credit card company brought in through this promotion.