The Rise of Localism 

The rise of Localism  

Localism is a movement that emphasizes the importance of supporting local businesses and communities. Shopping locally has many benefits, including keeping money in the local economy, reducing environmental impact, and strengthening the community.  

Localism is an old word, defined by Merriam-Webster as “affection or partiality for a particular place” with its first use dating back to 1823. In recent years, however, “localism” has taken on a few new dimensions, referring to either fiscal localism, to keep money within the local economy, or local purchasing, wherein consumers buy products and services from nearby businesses. Beginning with this article and throughout the rest of this magazine, we’ll be focusing a bit on both.   

Looking more closely at local purchasing, we’ve seen a distinct shift in consumer behaviour away from choosing global chains and superstores for their basic home needs. Read on for more details on the staying power of localism in the research from the marketing advisory firm WARC, ‘Localism’ is forecast to be a major post-pandemic trend.

According to Nexi/Nets Ecommerce Report Europe 2022, 68% of people surveyed say they buy from local shops. We learned what’s behind these numbers as consumers shared their thoughts and feelings about what it means to them to shop local.   

In Norway, we found that 64% of consumers preferred to buy from local businesses. In Finland, 66% agreed, along with 83% in Sweden, and 75% in Denmark.   

 They told us:   

• It feels good to support small/local businesses   
• It feels more personal/familiar   
• I don’t support big, global marketplaces like Amazon  

In Austria, 49% agreed with all of these points, but this was the only audience surveyed where there were still more motivated consumers willing to cross borders to buy.   

We found that in Germany, where 80% prefer to shop local, consumers agree that while it feels good to support small and local businesses and it also feels more personal or familiar, price was also a big factor in their decision. These sentiments match the responses from 66% of consumers in Italy as well.   

Switzerland shows that 58% support small and local businesses and feel it’s more personal or familiar without sharing the sentiment that they do not support big, global companies. They also noted that small and local businesses offered delivery options, and participants from Norway said they appreciate local delivery options as well.   

Another strong example of the rise of localism is seen in the research from Thoughtworks. In a recent survey, the research firm found that only 49% of British consumers expect to buy their food from supermarkets or larger retailers. This data seems sensible considering the sentiments and necessities sparked by the coronavirus pandemic and our collective requirements to stay closer to home. What may surprise you is that this same research was done in the UK by the same firm in 2018 and the response was 44%.   

This supports the argument that shopping local is not simply a pandemic-inspired trend. As predicted by many sources in 2021, this drive to shop local looks like it’s here to stay. People all over Europe are reporting that they prefer to keep business in the hands of a closer community, with this preference continuing even as larger retailers and shops reopen and continue to offer great convenience.   

Looking back at 2020 predictions, it’s clear that the consumer preference for local purchasing that started then is still true today. Research firm Kantar identified localism as one of the top three trends in consumerism across ~50 markets around the world.

The study found that an average of 65% of participants preferred goods and services from their own country. Buying local was most important to Chinese consumers (with 87% agreement among participants), followed by Italy with 81%, South Korea with 76%, and Spain with 73%. 

Fascinating research from Michael Shuman & Kate Poole shows us how revenue is reinvested by different businesses after a purchase. Only 30% of local purchases from retailers or franchises that are not locally owned stays in the local economy whereas 60% of the money spent at local-based businesses remains in the community.   

1. Keeping money in local communities 

When consumers choose locally owned businesses for their purchases, it keeps the local economy strong and vibrant in more ways than they may even know, but they’re starting to understand the importance more and more. They’re beginning to see that simply spending locally isn’t enough because even if a large retail store or franchise is around the corner, in all likelihood it will send more than 60% of their money to other parts of the world (see data above). It also means any tax revenue is siphoned elsewhere and away from any potential local improvements.   

Small and medium enterprises are far more likely to keep their profits in the community, which supports other local businesses, creates jobs, and goes back into local infrastructure to create a higher quality of life for everyone there.   

2. Caring for the environment  

Sustainability is a major benefit to shopping local. Deliveries from online purchases or major retailers carry a hefty carbon footprint per item. Local retailers order their shipments in bulk, often with a far more streamlined means of delivery, on a timetable and without the strain or urgency, greatly reducing the environmental impact per purchase.   

As for local shopping at stores rather than online, a consumer only having to travel a short distance and cutting out all the materials required for personal deliveries means the impact on the environment will be far less. This saves time and hassle in addition to reducing traffic congestion and CO2 emissions.  

It’s also common for many local businesses to implement more sustainable practices. By their nature and size alone, small and medium businesses use fewer resources and produce far less waste than larger retailers. They are also far more likely to source their products locally or have more energy-efficient operations. Supporting local businesses is a great way for all consumers to reduce their own environmental footprint.  

3. Creating stronger communities  

At its core, localism is important to consumers as a way to show support for their neighbours and community.

When consumers shop locally, they build relationships with the people who own and operate those businesses, fostering a greater sense of community and belonging.  

Additionally, local businesses are more likely to be involved in their communities by sponsoring events, donating to charities, and volunteering.  

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Nº01

September 2023

Industry News

Sustainable E-Commerce – Will it Become a Must?

We have entered the era of the conscious consumer. Running your business in a sustainable way is no longer considered a bonus, it has become a requirement. Consumers favor brands and retailers who run their business in an ethical and eco-friendly way, and are authentic and transparent about it. And it’s not just about what we buy – it’s also about how we buy it.

From the range and mix of available products or services, to unique offerings and speciality items, to the ambience and feeling when someone steps inside, every local business has something special to offer. When consumers support their local businesses and celebrate their products and services, it can also create a sense of pride and identity for the people who live there

Many locals love getting to know the latest creations of their community and find it exciting to be part of the unique energy that can only be found there. That’s good news for SMEs and a great boost for local economies.