Are you buying more goods from locally-owned stores? Maybe you patronize a restaurant that's owned by someone you know. More and more communities are promoting their mom-and-pop businesses, and this month Winnebago County proclaimed August "Buy Local Month." WNIJ's Mike Moen has been talking with people involved in buy-local campaigns about their effectiveness. He discussed what he found with WNIJ’s Dan Klefstad.
Here is the transcript of the discussion between WNIJ’s Dan Klefstad and Mike Moen:
Klefstad: Mike, give me a thumbnail description of how these campaigns typically work.
Moen: A typical one might involve a local chamber of commerce teaming up with some Main Street shops, and maybe a local bank will sponsor the effort. It might involve handing out flyers, or doing mailers. Discounts will be offered if you shop at these businesses on a certain day. Often, you’ll see these initiatives surface around the holiday season.
Klefstad: I understand you talked with an economist who studied these campaigns, including ones in Illinois. What did he say about their effectiveness?
Moen: The person I interviewed is Dave Swenson, who teaches at Iowa State University. He’s looked at these campaigns in various markets in the Midwest, including Springfield, Illinois. He says the basic theory, that when you spend locally, you’re keeping that money in the community, holds true. But he seems to agree with other experts and that when it is a hyper-local campaign, it generates some initial buzz, but it might fizzle out. Swenson says there’s no hard data out there to suggest that the typical campaign has a lasting impact on the local economy. Others have noted that in a bad economy, the shop-local message can serve as a prevention tool – meaning that a local business might not see higher profits, but it might save them from losing their shirt.
Klefstad: You mentioned that these efforts may not have a lasting impact. What's an effective alternative?
Moen: Swenson says if a local community can work with neighboring communities on a regional campaign – that should be the way to go. He says that might be more effective than a patchwork of smaller programs. Swenson says it should go beyond telling consumers to buy things from local shops throughout the region. He says it should involve convincing larger entities to secure contracts with local firms and suppliers. Basically – local industries buying from local industries. That way, he says you create a system that prevents money from flowing out of the region’s economy. So in a way, you are replacing many of the imports coming into the area. But he says, you have to make sure it’s an efficient approach. That means the local substitutes have to be fairly competitive in price and quality.
Klefstad: We've all heard the counter-argument to buying locally: That many mom-and-pops can't offer the same price as the national chains, and that it's not fair to ask a consumer to spend more just to support a local business. How do buy-local supporters respond to that?
Moen: Matt Duffy, who heads the DeKalb Chamber of Commerce, says paying a little extra not only benefits the local businesses and the people they employ, he says those extra dollars go toward local causes. He says when local stores go out of business, it might be harder to land corporate sponsors for various causes, because national chains might not be as willing to donate to those causes.
Another person I talked to is Marissa Caltagerone, who owns a bridal shop in downtown DeKalb. Her business has been involved with these shop-local campaigns. She says it’s possible you make up that extra money you spent because the circulation of local dollars ends up benefiting your employer.
She also notes that these campaigns give small business owners an opportunity for more interaction with local consumers, and getting a read on their needs. But she says business owners have to be proactive about it. Caltagerone says when you roll out one of these campaigns, it’s not enough just to convince more people to come into your store, browse for a minute, and then walk out. Capitalize on that extra foot traffic by making lasting connections with these consumers. And when you do that, the customer might get a greater sense of satisfaction.
Klefstad: So far, we've been talking about buying locally, but the stuff is still produced somewhere else. What kind of efforts are you seeing in terms of "Buy Locally Made?"
Moen: A lot of that comes on the food side. Buy food grown by local producers. We see it with all of these farmer’s markets that continue to pop up. But some observers say these campaigns should do more to promote locally made retail products, like clothes and household items, stuff from boutiques, and some of them are doing that. A common complaint is that if you tell someone to buy local, but it was made somewhere else, money is still leaving the community because you have to pay the cost of getting that item to a local shop. Consultants who advise communities about these programs say shoppers can get excited about buying something they know they can’t get anywhere else.