Merchant Innovation

How Local Goods Influence Shopper's Habits

As much as the big-box retailers and online marketplaces grab consumer attention, the concept of buying local is, and always has been, a niche market that's had its own successes.

Now, a new survey from Precima shows just how much buying local really means and what that means for purchasing behavior. The survey results indicate (through an online survey of 1,213 people in August), that 85 percent of American shoppers say buying local is an important factor. In that same survey, more than a third said they'd pay a premium price (15-30 percent more) to purchase local goods. More importantly, 82 percent said they would spend more on groceries if local options were easier to access; 87 percent said they were more likely to buy a product if they knew the producer or maker of the product.

On the contrary, just 15 percent said that large retail chains source enough local goods; compared with 71 percent who said local farmers markets do so. The results also had 23 percent listing natural food stores as a good source. More than 40 percent said they think larger chains fail to showcase enough local goods.

"Local products represent a significant opportunity for chain retailers to attract new customers and capture additional share of wallet from existing customers. Retailers need to draw upon the shopper insight data they collect to understand what is driving this behavior and then structure their pricing, merchandising and promotions to align with the value consumers place on local products," says Graeme McVie, General Manager and Vice President of Business Development for Precima, the data analytics division of LoyaltyOne.

And for those who don't choose buying local? The top reason surveyees said they don't is because they don't have time to decipher between local/non-local goods. Price was not the top driver as it ranked second (35 percent) under consumers who said there aren't enough local goods to shop from (42 percent). Of those surveyed, 31 percent said local products cost too much.

“We've known for some time that local is an important movement economically and socially. Getting local right is not just a nice to do, it’s vital for retailers looking to drive incremental margin and loyalty; this is true for many retailers, especially large-chain grocery stores who stand to make the most by closing the gap. Sourcing local is only part of the puzzle - it's how you present the value that is going to make the real difference to the local economy, to the shopper and to the retailer’s bottom line," McVie said.

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