Consumers failing to shop local, despite intentions

Consumers failing to shop local, despite intentions

The majority of Australian consumers say they prefer to support local businesses, but few are actually increasing their spend with smaller businesses.

Launching its annual Shop Small campaign – which encourages people to shop more from small businesses (those with 20 or fewer employees) – American Express released research that showed just 29 per cent of consumers increased their shopping frequency with independent businesses in the past year.

Somewhat contradictory, however, 43 per cent of surveyed businesses reported an increase in turnover over the year – suggesting that customers who do shop local are spending more.

The research suggested more needs to be done not on educating consumers about the role of small businesses, but on the importance of actually spending money with them.

Some 76 per cent of surveyed consumers cared about the longevity of small businesses in their local community, and 68 per cent said these local businesses make communities more desirable.

Yet the reality is that many shoppers feel their needs are not being fully met by smaller operators, leading to the divide between intentions and spending habits.

Just one in 10 feel they can buy everything they need from local businesses. Higher prices are also a deterrent for 61 per cent of people, and limited trading hours put off one in five customers.

“Local consumers make up a large proportion of small business activity. Six out of 10 small business owners said their customers are mainly locals but, worryingly, that loyalty is waning. Nearly half of small business owners said that retaining their existing customer base is a concern,” the Shop Small report said.

However, Alyce Tran, owner and co-founder of The Daily Edited, said that consumers are increasingly becoming “obsessed” by niche brands.

“I think there is a move away from big brands,” she said, adding that this trend is actually acting in her favour when it comes to negotiating with suppliers and landlords.

Pitching the ability for Westfield to have her brand’s only Sydney store, and for David Jones to be an exclusive stockist, have been key elements in securing those deals, she said.

 

Consumers failing to shop local, despite intentions
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