“Buy Local” is an Economic Stimulus
An easy way to help the economy? Buy local. What started as an independent business initiative in Boulder in 1998 has now grown to 140 cities nationwide, and it doesn’t show signs of stopping. If anything, “Buy Local” is continuing to gain new ground.
For the fourth year in a row, a national Independent Business Survey taken over an 8-day period in January found that “independent businesses in places with a ‘buy local’ initiative,’ which comprised about half of the respondents, reported an average gain in revenue of 5.6%, compared to 2.1% for those elsewhere.” The survey looked at 2,768 businesses in all 50 states, including retailers, service providers, restaurants and others.
“This survey offers proof that, with sustained efforts, communities can indeed raise local consciousness and build a culture of support for local entrepreneurs,” said American Independent Business Alliance director Jennifer Rockne. “Remarkably, most of the campaigns operated by Independent Business Alliances are funded by businesses paying $20 or less per month in dues. They’re getting quite a return on their investment.”
According to the survey, 55% of the initiative’s participating businesses said that the campaign increased customer loyalty, 47% said “Buy Local” brought new customers, more than two-thirds of them have seen increased local media coverage, and 51% noticed more awareness and support from local government officials. The initiative has also fostered more business involvement in communities, with 49% of the respondents saying that “Buy Local” led to more more collaboration, purchasing and mutual support between local businesses.
The survey also found a greater awareness and more intentional seeking out of independent businesses, with almost two-thirds of the respondents reporting that public attention towards the benefits of buying locally increased in the last year and 83% stating that their local and independent statuses are important to some or most of their customers.
“Small, local businesses generate the majority of new jobs in the US,” said Michelle Long, Executive Director of the Business Alliance for Local Living Economies. “Buy Local First campaigns help bring these businesses and residents together to build community health and wealth.” This is because local businesses tend to have larger payrolls because they employ their own people, as opposed to chains, which are usually centralized in headquarters. Local business are also more likely to buy locally themselves, which in turn recirculates the money spent with them into the community.
The initiative’s biggest impact is in how it builds a community’s health and economy through what is known as “The Local Multiplier Effect,” which looks at the frequency that money circulates at the local level before it gets spent on an import from somewhere else. Every million dollars reinvested by independent businesses at a local level becomes the equivalent of a million dollars coming into that community from somewhere else.
Basically, money spent at local business stays closer to home. If you increase local spending from 50% to 80%, you more than double the economic return. “For every $1 spent at a local business, 45 cents is reinvested locally,” wrote Yes Magazine. “For every $1 spent at a corporate chain, only 15 cents is reinvested locally.” The culture of buying locally creates a ripple effect that in turn builds upon and sustains community economies.
“More and more shoppers are voting in favor of independent retailers with their spending, proving that they recognize that bigger is not always better – and making clear that they value a strong, unique, and vibrant community,” said American Booksellers Association CEO Oren Teicher. “The potential for locally owned businesses committed to working together could not be greater.”
A brand is more than just a brand, and it shows when consumers see nationwide that “Buy Local” is more than just a catchphrase or even a movement. It’s a lifestyle, even a culture, that values its economic contribution just as much as it does its product and revenue.
Photo courtesy of Peter Blanchard via Flickr