The Allure of Local

“Local” has become a bit of a battle cry these days. It’s not uncommon to read that “local is the new global” and “smaller is getting bigger.” Data seems to support the buzz. In 2009, the Futures Company found that 73% of U.S. consumers make an effort to support local, neighborhood businesses rather than large national companies. A recent American Express OPEN survey found that 93% of consumers believe it’s important to support local small businesses they value in their community. Consumers are putting their money where their mouths are when it comes to spending at local small businesses – the study found that, on average, about a third of their monthly discretionary spending takes place at locally-owned, independent businesses. But what’s behind the attraction of local, and what opportunities does it create for local businesses and even for individual multi-unit locations with a strong community presence? Some sentiments behind the trend:

TRUST. Consumers feel that big institutions are harder to trust, an attitude fueling a lot of front-page news. The Futures Company’s data shows that 52% of consumers trust small local retailers to be honest and fair compared to large, national retailers (19%). Independent restaurants have an advantage, especially if they are transparent (e.g., ingredients in menu items, pricing of specials) and resolve issues promptly, showing concern for customers. While chain locations may be perceived as part of a big company, within their four walls they should act small – show the same degree of responsiveness and concern. Regardless, be honest and transparent about what “going local” means in your business, remembering that decisions consumers make to patronize locally are linked to a sense of responsibility on their parts, so it’s deadly to overpromise.

GLOBAL FATIGUE. There has been so much focus on global – economy, politics, climate, etc. – that today’s consumers may be saturated, and it’s difficult to relate to. “A local business is more tangible,” says Holly Moore svp/director, global accounts, The Futures Company. “In an economic downturn, ‘my world’ becomes more dominant and consumers are retrenching. It’s really human nature. When you feel under siege, you want to protect me and mine. That doesn’t mean that people lose their compassion or even worldview. It just means their priorities shift a little.” The smaller circles that make up “my world” are typically family and close friends, so welcome these groups with more zeal than ever before.

SENSE OF COMMUNITY. While consumers’ circles are becoming smaller, fewer say they have things in common with those around them – 48% said there is a sense of community where they live, down from 53% in 2008, according to The Futures Company. “People are looking for community, connections, and commonality,” says Holly. “Our data shows that one of the most important (83%) beliefs about friendship is that friends share your values.” Part of what small businesses create is the sense of familiarity and friendliness with which they greet and treat customers. Small is an advantage, but there are tools to help – chief among them loyalty programs that identify those customers – and staff can simply ask if guests have been to the restaurant before. The most important element may be first impressions – make eye contact, and welcome everyone who walks in. Remember that the table is a powerful place for people to gather together – communal tables can create a sense of connection. is a growing national service connecting restaurants with Grubwithus members, who reserve to sit together for family-style meals.

MAKING A DIFFERENCE. Consumers are examining their choices and they need to feel they are doing something that has an impact – environmentally, charitably, etc. – according to The Futures Company. In its data, 62% said that making a difference in their local communities is important in their personal lives; 82% believed that groups of individuals making small changes in behavior can achieve a real difference. American Express OPEN data shows that 89% are aware of the impact local spending has on their communities. Again, there is a home-court advantage for independent restaurants – consumers are more aware that statistically, a higher percentage of their money spent at local, independent businesses stays within the community. But restaurants of all sizes can support schools and teams, community organizations, etc. And they can support local businesses, too, in the case of restaurants, perhaps buying locally-grown produce, locally-sourced meats and seafood, and/or locally produced wine and beer. The bigger the restaurant company, the more challenging it is to manage idiosyncratic purchasing, but it’s important to try. Bottom line, all restaurants should think about ways to pay it forward locally and be good neighbors.

It’s important to remember that “local” can be as much an attitude and a consciousness as it is a geographical definition, and that it has many facets – it can be the U.S. city from which a product on a menu originates and/or the cities, towns, and neighborhoods in which restaurants operate. Restaurants – whether independent or chain locations – need to find the “local” fit that’s right for them, bring it to life, and let it be known.

November 17, 2011