Here at Locasaur, we love to live, eat and shop locally. Supporting local businesses owners is kind of our thing. But there are even times when we succumb to the siren call of the sliding doors and fluorescent-lit aisles at a chain or big box retailer. Sometimes, it’s just too easy to dip-in, stop by, turn up, and fill the cart to your hearts content. We were curious about what exactly created the magnetism of chains, so in an effort to learn more about people’s habits in choosing where to eat and shop, the Locasaur team had 300 New Yorkers answer survey questions about three topics: 1) their preferences and habits when choosing between local independent businesses and chain stores at home, 2) preferences while traveling, and 3) how they interact and communicate with their favorite spots. Here’s a bit about what we learned:
First things first, everyone had favorite local spots — no surprise there. Over 80% of our respondents indicated they had one or more favorite local businesses. When asked why, roughly half gave answers that referenced either impeccable customer service or some form of personal relationship established with the given business. Additionally, over a third explicitly talked about the certain feel that going to a local place evokes. I’ve written before about how important it is for small business owners to cultivate both the ambience of their businesses and the personalized customer service provided in order to retain customers. But having these favorite local spots still doesn’t always mean an individual chooses to spend their money there. In fact, the most surprising result we received was a massive disparity between individuals who would choose local for restaurants and individuals who would choose local for retail.
88% of our respondents said they would rather frequent local independent restaurants and food spots than chains. Only 31%, however, said they would choose to shop at an independent retail store over a chain. The divide between those who said they would rather shop at a chain and those who expressed a preference for local stores persisted no matter what demographic we tried to filter by. Even respondents in higher income brackets — for whom the increased price often associated with local independent stores is ostensibly less of an issue — expressed the preference to shop chain over local at a similar percentage. That’s not to say price wasn’t a factor; 57% of respondents said it was. But there was another major contributor as well: knowledge. People knew there was a high probability that a chain store will be close by. They knew that there was a consistency in the store’s inventory. And most times, they knew exactly what they were looking for.
In answers from 44% of the total respondents who noted they would rather shop chain than shop locally at home, and 60% of those who indicated the same sentiment while traveling, there was some mention of a knowledge “gap” that influenced their decisions to choose chain over local. By “gap” we simply mean that there was a lack of some critical piece of information that led to people choosing to shop at a chain. In responses that expressed a preference for chains, not only did words such as “selection” and “variety” come up repeatedly, but so did more generic adverbs — “usually,” “likely,” and “probably” — which indicated that people made choices based on what they knew they could expect. Specifically, people knew with a high degree of confidence that they would be able to find exactly what they were looking for at a chain, or at the very least, a serviceable substitute.
And herein lies the fundamental difference between making the choice to eat local and making the choice to shop local. A meal is an exploratory experience. Whether you’re stumbling into a hole-in-the-wall or going to a ritzy place you’ve always wanted to try out, choosing to eat at a local independent place is choosing to experience something new — and subsequently deciding if you like it enough to come back. Finding something unique, tasting something delicious or surprising, that’s what keeps people trying new local restaurants. It’s completely antithetical to fast food chains, where the whole point is that you know exactly what to expect. Ray Kroc, after all, was known to meticulously visit McDonald’s all over the country and sample the fries, in an effort to make sure they tasted the same at every restaurant.
But shopping is different. We shop with lists, not with cravings we’re looking to satisfy. We shop with things in mind that we specifically know we need. And if you can’t find what you need, the only thing you’ve experienced is wasted time. Therefore, when you know you need something, the most efficient option is to go first to a place that you know has it. In many cases that means choosing a big box retailer over a local place. There’s no doubt the personal touch and experience of going to a local business resonates with people, but knowledge (convenience, consistency, known variety of inventory, etc.) of chains is often an insurmountable barrier to an individual who might otherwise choose to live locally. That’s “Walmart Magnetism.” You don’t need to think about it, you just go. Sometimes, choosing chain is simply too easy to choose otherwise.
Local businesses do, however, have two advantages to combat Walmart Magnetism — a more personalized relationship with a more dedicated following of regulars. Both of these factors can be leveraged to help give customers more knowledge, and therefore mitigate some of the time-risk or lack of convenience that’s associated with shopping local. While a local business will never be able to match a large chain’s selection, it doesn’t necessarily need to. They can counter the selection limitation to an extent by letting customers know exactly what they’re offering, and be accommodating and proactive about acquiring specific items or substitutes. This knowledge transfer need not be invasive or annoying. According to our research, 62% of respondents wouldn’t feel intruded upon if they heard from their local businesses on a recurrent basis. In fact, providing relevant “knowledge” seems to be exactly the sort of thing a retail business should be doing for regular customers. For the customer, “knowledge” isn’t just knowing that a local place has what they’re looking for. It’s also “knowing” that your local place set aside that vest you tried on earlier and you can pick it up whenever. Or “knowing” that the friendly hardware store can tell you not only what you need to fix that leaky faucet but also how to do it.
At Locasaur, one of the big questions we continually ask ourselves is how we can help local businesses bridge the knowledge gap and make it as easy as possible for people to live locally. By using more knowledge-based content in marketing, opening more channels of communication with their regulars, and catering smartly to their needs, local retail businesses could potentially create an even more convenient customer experience than a chain store. The end result? With the knowledge gap between going to chains and going to local establishments removed, more people choose to live (and shop) locally, and the magnetic north shifts from mindless convenience, to thoughtful personal experience.
Note: We’ve been speaking with local business owners as well! Insights from those conversations coming soon.
Pique your interest/want to discuss? let me know at firstname.lastname@example.org! Credits to Ayesha Prasad, Rachit Mohan, and George Liu for looking over drafts and edits.