Consumers are changing their shopping behavior. It’s good news for small business. Photo by Becky McCray.
Last week, we talked about how big box retailers are getting smaller. Why is the big box retail sector making this expensive and difficult change to smaller stores? Because consumers have already started changing.
Humorist David Sedaris summed up this consumer feeling in an interview.
“I’d rather go to an actual shop — preferably a small one — than to a harshly lit superstore, or, worse still, a website,” Sedaris said. “I don’t want to buy my books and my toilet paper and my clothing all under the same roof. I want beauty in my life. I want charm. I want contact with actual people. It is, for me, a large part of what makes life worth living.”
A number of things point to the fact that consumers are changing their spending to favor small retailers over large retailers.
Consumer spending at small retailers is growing faster than spending at big retailers, according to the MasterCard SpendingPulse™ for Small Business. They consistently reported this trend in 2012, 2013 and 2014.
Last year, the Deluxe Corp’s Annual Holiday Shopping Survey showed steady gains for small businesses over big box stores as a favorite place to shop. Not that small retailers are more popular overall, but that they are making steady gains.
It is exactly this shift that is driving the change in big boxes. For example, BBC News reported that changing consumer behavior is driving huge UK retailer Tesco to build smaller shops in city centres.
Consumers are tiring of the sheer amount of merchandise at big box stores, James Dion, president of Dionco Inc., a retail consulting firm based in Chicago said.
“We know that when customers are confronted with too much choice, they don’t make a choice,” he said.
This changing preference for smaller stores is good news for small towns and small stores. Individual retailers can promote their small size as a benefit, instead of thinking of it as a disadvantage. And this makes a natural benefit to mention in shop local campaigns.
If you’re working on a shop local campaign to support your local small retail stores, you might benefit from the$9 guide to shop local campaigns in small towns.
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Becky started Small Biz Survival in 2006 to share rural business and community building stories and ideas with other small town business people. She and her husband have a small cattle ranch and are lifelong entrepreneurs. Becky is an international speaker on small business and rural topics.
Becky,
Nice recap of this trend. We certainly concur; see our “In retailing, size DOES matter!” observations from our blog: http://www.retailowner.blogspot.com/2014/08/size-does-matter-advantage-small.html.
Hi Becky,
I like the quote from Sedaris (although I do like shopping online too!) and agree: there can be a real “charm” in having conversations with a shop owner discussing everything from what you’re buying, to how they source their products.
This past week I purposely drove about 45 minutes out of my way to buy a gift for a friend from a particular store. Every product in the shop is American-made; in fact, that’s the name of the business! When I was paying for the item, I chatted with the owner about how long they have been in business (3 years now), and about the various products in their store (from decorative wall pieces, to mustard, to soap, etc.). She told me that it’s common for a local business owner or artisan to “just walk in” with their product and ask to be included on their shelves. Apparently that’s how the small business who made the sign I was buying for my friend got into the shop. I’m guessing it’s a little harder for a small business or artisan to get a chain store to carry their items! (Although, I do know of a small business that got into Wal-Greens by walking in with their product. I suppose their are always exceptions!)
I could have gone to a big box store about 10 minutes away from my house and bought a similar gift for maybe a little less, sure. But I wanted my friend to open a gift that was of better quality and more special because of where it was made (~15 minutes from the shop I purchased it from) AND because of the dedication of the small business who carried it.
The town where this small business is located (Canandaigua, NY) is – I believe – thriving. Of course they are blessed with location (lakeside). I’d love to see some of the smaller towns in western and upstate NY thrive in the same way.
Tracy, that is a great story of how we as people who buy things are thinking of not just the price, but also the story, the purpose, the transaction and the benefit differently. It’s not as simple as just “cheapest” any more.