Home Field Advantage
Locally owned businesses are banding together to hold events, address municipal issues and educate consumers
By Meredith Schwartz -- Gifts and Dec, 10/1/2006 12:00:00 AM
“Put your money where your house is,” reads a lapel button. This simple phrase is the essence of a grassroots movement that's spreading across America. From Main Street to Main Street, local independent business owners are forming groups to promote and preserve their businesses by convincing shoppers to “think local first.”
Two umbrella organizations oversee such local business alliances: the American Independent Business Alliance (AMIBA, which trademarked the term “Independent Business Alliance,” or IBA) and the international Business Alliance for Local Living Economies (BALLE), which uses phrases like “living economy” and “sustainable business network” to identify its philosophy. Other local groups promoting independent businesses are not affiliated with either umbrella organization.
For those tied into either AMIBA or BALLE, local groups act as lab experiments; successful initiatives are turned into templates and replicated by similar groups around the country. National groups are also in a better position to gather data, and a national membership base means that customers who can't find the product they want locally can still support an independent business elsewhere.
Yes, in my backyard
The key to “local first” programs is to make customers understand what's in it for them. And one advantage is the most reliable incentive of all: cash. More of the money spent at locally owned businesses remains in the community, compared to money spent at a big box store. While the “local multiplier” varies by community, studies find that area businesses consistently spend several times more in the community than big boxes.
Research provided by BALLE has proved this point several times over. For example, out of $100 spent at a chain store in Austin, TX, just $13 stayed in Austin. On the other hand, $45 out of $100 spent at local independent businesses goes back into the community. In Chicago, $43 of $100 spent at a chain store stayed in the city, while $68 went back to the city when $100 was spent at independent retailers.
Shoppers care about keeping money local because the more it gets spent around town, the more times it benefits the community. Money that stays local is used for such things as renovations that increase property values, paying employees who in turn will spend their salaries locally, and simply more shopping. Locally owned independent businesses also donate more to non-profits (small businesses contribute about two-and-a-half times as much per employee as larger businesses, according to the National Federation of Independent Business), which in turn contribute to the community.
Besides persuading end customers, local alliances also induce support from someone else: their own members. “There's a lot of business-to-business [transaction] that goes on,” says Kelly Hall of K. Hall Designs, St. Louis, a retailer, manufacturer, and member of Businesses United for Independent Local Development (BUILD). “Independents like to take care of independents. The service and quality that you get is, in my experience, better.”
Luanne Andes, owner of Lulu's Repose and member of Columbia Locally Owned Retail & Services (COLORS) in Columbia, MO, agrees. “We all patronize each other's businesses. It raises awareness even among ourselves about who's out there and what they're doing.”
Buying local may not always be practical when it comes to sourcing product, but props, paint and services can still be purchased from locally owned stores.
Geographic diversity
A prime appeal of Buy Local campaigns is preservation of geographic diversity. Shoppers may like the prices or convenience of national chains, but they often resist the thought of a downtown that looks exactly like one 1,000 miles away.
“You come to Tampa, you want to get a flavor of that area. You don't want to go to Wal-Mart to buy your souvenir,” explains Gifts by Maria owner Maria Alvarez, a member of the Tampa Independent Business Alliance (TIBA)
“When I travel, I want to know where locals eat, where locals shop, what they make that's unique to the area,” Meg Brownson tells Gifts & Decorative Accessories. Brownson, who owns Alfresco Casual Living in Stillwater, MN, is herself a member of a local business group, Twin Cities Metro IBA.
“If we don't support local people who are trying to live their dreams, it's really not going to matter where we live anymore,” notes Brownson. “People like to shop at independent specialty retailers, but if they don't make an effort to make a purchase, we're going to disappear. And then our beautiful downtown streets will have nothing but a few bars.”
Green dollars
There can be even larger benefits of buying locally. For one thing, it's better for the planet, reducing pollution from shipping and disruption of natural habitats. And it makes product less vulnerable to disasters in the shipping pipeline.
Sustainability is emphasized by some organizations more than others. For instance, BALLE has pushed the environmental agenda more than AMIBA. BALLE member the Sustainable Business Network of Philadelphia (SBN) proposes a triple bottom line of “People, Planet, Profit” for businesses to judge their success, according to executive director Leanne Krueger-Braneky.
While members need only be locally owned and independently held to join, the network promotes business that do more for the environment, including fair trade goods, locally grown foods and recycling initiatives, among other efforts. Whether the “planet” piece of the puzzle is a selling or a sticking point depends on the community — and the customer.
Getting the word out
Consumer education is some of the most vital work these organizations do, running the gamut from a simple poster in a store window to ambitious advertising blitzes. Originally tested by the Texas-based Austin Independent Business Alliance (IBA), and Sustainable Connections in Bellingham, WA, education campaigns have been replicated in communities all over the country, emphasizing the economic, environmental, and cultural advantages of shopping locally.
“It's really hard to compete with the big boxes,” says Tara Dickerson, owner of Girltalk in Louisville, KY, and member of the Louisville IBA. “Keep Louisville Weird (the city's buy local program) helps to remind our customers that we're locally owned and evoke that loyalty.”
Sometimes consumer education takes a critical tone, highlighting the hidden costs of shopping at chains. Says Jerry Schlichting of Frazzleberry, Warwick, NY, member of the Warwick IBA, “I'm an accountant by trade, and I helped the IBA develop a little study of how much it costs to go to the local mall, which is 30 miles away, or the local outlet mall, which is 40 miles away. It really does cost about $40 dollars to drive to the nearest traditional mall. With that money, you could stay in town and buy three more gifts or a nice lunch.”
Independent organizations also give out stickers and buttons to recognize those who shop locally, and prizes to reward them. The groups put on street fairs, as well as art and jazz festivals; organize walking tours and wine and beer tastings; hold local charity fundraisers, artist and antique markets; host parades and dances, and sponsor town-wide discount cards and late shopping nights. In short, they use the same proven retail principles that turn stores into destinations, but take them to the next level, creating multi-business events that confirm the adage “a rising tide lifts all boats.”
But the single most frequently mentioned benefit of local consortiums is a directory of local businesses to distribute among members, and/or host on the organization's website, where consumers can search by type of business. Says Krueger-Braneky, “Last year, we printed 5,000 [directories], and we're completely out. The challenge this year has been how to keep them in stock.”
The $64,000 question
Does all this promotion attract more shoppers, or does the “buy local” message only resonate with customers who already patronize independent businesses? Both are probably true. According to Chuck Robinson of Bellingham, WA-based Paper Dreams (who is also treasurer of Sustainable Connections), “The buy local campaign has had a serious impact in the community. I've heard people say that three or four years ago they never heard anyone asking whether a business was locally owned, and now we hear that all the time. Our store has experienced a sales increase over the last two years. And while it's difficult to attribute that to one thing, I have to believe that [the buy local message] makes a difference,” he says.
Samantha Searle, owner of Nourish and president of the Local First business association in Grand Rapids, MI, also hears buzz from her customers on the organization's Shop Outside the Box program. “I've had grandmothers walk into my store and say 'I'm shopping local,'” notes Searle. “I don't know where they hear it, but it's a mantra — they get it and understand it. They know more of the money stays local. We even have people who can recite what percentage [of each dollar spent] stays in the community.”
Consumer education worked in Philadelphia, too, where SBN ran a holiday shopping week. “Some businesses reported an increase in sales. We ran a pilot period in May 2005, and when we surveyed the businesses, as well as 12,500 consumers, we found that yes, the businesses had seen an increase in profits. And more importantly, their visibility was increased,” says Krueger-Braneky.
But not in Tampa, according to Alvarez. “For me, it doesn't increase traffic. It's a phenomenal concept, but we don't have as much participation as we should. You see other groups in other areas that have tremendous support and you wonder what's wrong that it doesn't happen here. The membership doesn't step up to the plate.”
In it together
Practically every alliance member who spoke to G&DA mentioned an increased bond between business owners. Says Andes, “What COLORS does is provide a sense of community at a time when our town is experiencing an explosion of chain stores. We can come together to promote ourselves and have a sense of community and a sense of identity as independent locally owned businesses.”
Stores that once considered other local businesses their competition now see each other as allies in the common fight against anything that lures feet off Main Street. “It creates camaraderie. I wanted to do a movie theater ad and I couldn't do it by myself — it was just too expensive. I know another storeowner because we served on the board together, so I approached her and we did it together,” says Jill Scatchard, owner of Boosha, Petaluma, CA, and member of the Petaluma Merchants IBA.
The resulting cooperation is changing the retail landscape. Independents are more willing to surrender just a little independence to central organizations that, in one storeowner's words, “run downtown like a mall.” Some even voluntarily levy taxes on themselves to fund amenities beyond what many towns can afford — but not beyond what today's shoppers expect.
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