New Research Report: The Impact of Online Shopping on Local Businesses

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Just in time for the 4th annual BC Buy Local Week, LOCO BC launches a new research report highlighting a growing trend in online shopping, how BC businesses are competing online, and what motivates online shoppers. Here are some of the highlights from the report:

  • Online shopping is a growing trend in Canada. Sales are expected to double by in the next four years, from $22 Billion in 2014 to $40 Billion by 2019.
  • B.C. retailers cite “competition from internet retailers” as one of two top challenges they face (tied for top issue at 64% along with “big competitors receive better pricing & terms”).
  • Very few businesses feel they are marketing themselves effectively. The majority of them are spending less than $200/year on advertising.
  • 2 out of every 3 dollars spent online by Canadians goes to a U.S. retail website.
  • Cross border online shopping reduces the amount of money circulating in the local economy by up to 32%.
  • The higher the volume of online purchasing a consumer does, the more likely it is that they purchase with chains versus local businesses. Those whose online purchases make up less than
  • 50% of their overall consumer spending are spending approximately equal amounts with chains as local businesses. However, those spending between 75-99% online shop with chains twice as often as with local businesses.
  • Consumers value local. Of Canadian consumers surveyed, 69% valued Canadian ownership as “Most Important” or “Important” when shopping. Over 50% of consumers are seeking locally made products and nearly 50% prefer to buy from companies right in their Province or City.
  • Consumers would spend more money online with local businesses if they offered convenient shipping, e-stores and a better consumer experience navigating their online stores.

Download the report

Q&A with Sandra Garcia, Conscious PR

LOCO is all about promoting its members and facilitating partnerships between members. When we learned  Sandra Garcia of Conscious Public Relations Inc had landed a contract with a LOCO follower within a week of joining the organization, we wanted to learn more about the story behind getting the contract, what motivated Sandra to join LOCO, and what advice she would offer new members to help them get the most out of belonging to the LOCO community.

What inspired you to join LOCO BC? How long have you been a member?

Sandra: I first heard about LOCO BC near the end of 2011; around the same time I was exploring rebranding my company. I rebranded the company in 2012. Along with wanting to work with ethical companies, I also wanted to support local businesses and the local economy, so when I launched the rebrand, toward the end of 2012, I joined LOCO BC. I’ve been a member now for about a year and a half.

You had your first contract with a LOCO follower within a week of joining LOCO. Could you tell us a bit about the contract and how LOCO was involved in the process?

Sandra: LOCO BC sent out a message through their social media platforms, welcoming me as a new member. A business owner, Colin Bell who was following LOCO BC on Twitter, saw the tweet and contacted me about doing a PR campaign for his business franchise, VIP Bin Cleaning Vancouver. After we connected on Twitter, we connected through email, and signed an electronic contract for the project. The company cleans residential, commercial, and industrial waste containers using recycled water and environmentally friendly cleaners and deodorizers. The owner wanted to coordinate a PR campaign with the City of Vancouver’s launch of its Green Bin program in 2013. The project lasted for three months.

Have you had other contracts, or developed other partnerships with LOCO members or followers since then?

Sandra: I’ve been working with Saul Good Gift Co to send gifts to my clients. It’s good to know what’s out there locally.

What do you value most about belonging to LOCO BC?

Sandra: I love the sense of community and going to mixers where I get to meet people who share the same values.

What suggestions or tips would you give to new members for getting the most out of belonging to the LOCO community?

Sandra: Go to the mixers and meet people. Reach out and connect with other members through social media. Stay involved with the organization and share ideas or suggestions for a venue or a Lunch & Learn topic. It’s a close community, and Amy and Julia are easy to reach, so if you have an idea it’s easy to get an event together.

What services do you offer LOCO members?

Sandra: LOCO members receive 10% off on most of my services, which include three-month Publicity campaigns, Social Media set up or three-month campaigns, writing website copy, or strategy consultation. For a list of services and pricing, click here.

Interview by Susan Chambers of Sage Editing &Research. Have a LOCO story to share with us? Let us know! Contact us.

Buying Local: more than a nice idea

An interesting opinion piece on the rationale of buy local campaigns appeared in the Globe and Mail last Friday titled ‘Buy Local’: Nice idea, but does it make sense?. The article gives a take on the local economy movement and buy local campaigns, ultimately leading to the conclusion that they can be dangerous to our own global competitiveness.

This opinion piece is a gift. It clearly spotlights the concerns and reservations that many have about ‘buying local’ including questions like: what is local?; what would happen if everyone ‘bought local’?; can I be a local economy advocate and still want to buy products not produced here? If I desire to scale my business to other markets am I still a local business?

These are the questions we at LOCO think and talk about every day. While we agree with the author that ‘local’ needs to be better defined, we don’t agree that focusing on local is hypocritical or takes away from global competitiveness. For us, the goal is to increase the benefit to our local economy by looking at how we can recirculate more dollars to local businesses in the province and within Canada. A small shift in dollars can have large economic impacts. Research shows that a 1% shift in consumer spending towards local businesses can result in 3100 jobs and $94 million in additional wages to the BC economy. This is a huge local economic impact that does not have a proportionate impact in national or global spending. In fact, one could argue that this economic impact strengthens consumer spending to benefit everyone.

This also leads us to consider a bigger question, how can national and international organizations contribute to the communities and economies where they operate? How can they support the communities that contribute to their revenues? How can they support the economic, environmental and social resilience of these communities so those communities can continue to contribute to their revenues over the long term? In our view a focus on local purchasing and increasing the percentage of dollars that they spend in the communities where they operate should be a key focus.

As we consider these questions at LOCO we’ve started working on our definition of local from the perspective of local economic development. We are soliciting feedback and we’d love to hear your thoughts. As a shopper or purchaser what does this model mean to you? As a business owner how does this model apply to how you want to grow your business?  How can we develop this model further? Send us your thoughts, LOCO wants to know!

LOCO Degrees Of Local Business

 

New Report: Buying Local Tools for Forward-Thinking Institutions

LOCO, the Columbia Institute and ISIS Research Centre at the UBC Sauder School of Business released a new report to influence increased local purchasing today. Buying Local: Tools for Forward-Thinking Institutions is a companion to The Power of Purchasing: The Economic Impacts of Local Procurement, released earlier this year, that quantified the benefit of purchasing from B.C.-based suppliers.

Around the world, institutional procurement is beginning to incorporate the value of local economic health and vitality. Here in Canada, local governments and school districts alone spend more than $65 billion annually on the procurement of goods and services. Cities and regions spend millions on economic development, and hundreds of millions on procurement, yet these efforts are rarely aligned. Important opportunities exist to benefit public, non-profit and private sector institutions as well as communities by shifting purchasing dollars towards local business. This report outlines strategies and paths that policy-makers, sustainability managers, procurement professionals and others involved in institutional purchasing decisions can pursue to realize this potential.

Around the world, there is a growing movement to support local economies, and various approaches are being taken in different places. Great benefits come from strong, resilient local economies, and many opportunities exist to take small steps that can majorly benefit our public institutions, businesses and communities. If purchasers are ready to take on leadership roles, the tools and solutions detailed here are effective ways to expand local purchasing and strengthen our communities.

Part I of this report outlines the argument for local procurement. It demonstrates the power that institutional procurement has over the economy and highlights opportunities for change by examining the current landscape in Canada, the United States, Australia and the United Kingdom. It details how local economic impacts fit within the definition of value when attempting to achieve best value in procurement.

Part II and Part II of the report identify tools that can be used by institutions and policy-makers to increase local procurement. They outline a number of challenges, and detail solutions that are currently being used. Examples of the tools have been included along with references to material for further research.

Download the report here.

BC Buy Local Week in the News

Check out all the great coverage of #BuyLocalWeek so far:

Global News: British Columbians Encouraged to Shop Locally During Holidays

News 1130: BC Retailers Band Together for 2nd Annual ‘Buy LocalWeek’

The Tyee: Five Ways to Take the Corporate out of Christmas

Metro News: Buy Local This Holiday Season, Vancouverites

Business in Vancouver: Buy Local Week Steers B.C. Shoppers Away From the Mall

BC Business: Buying Local Beyond Black Friday

Vancouver Observer: Buy Local Shopping Tips for the Holiday Season

Vancouver Is Awesome: Weekly GoodBomb: Buy Local Week 2013

Cowichan Valley Citizen: Shopping Locally Increases The Local Wealth

Whistler Pique: Shopping Local Will Keep Business Strong

Write a holiday card to a local biz & win $5,000 in prizes!

In celebration of Buy Local Week 2013 (Dec 2-8) we are giving away over $5,000 in prizes from local BC businesses including weekend getaways to Tofino & Whistler.

All you have to do is send a holiday card to your favorite local business in BC telling them how they made your year bright. Enter here

Did you know when you choose to spend your dollars locally, for every $100 you spend $46 is re-circulated back into the local economy? Local businesses help our communities thrive. Write a holiday card to your favorite local business today.

Grand prizes:

Tofino Getaway ($1,165 value)

Whistler Getaway ($916 value)

Vancity $500 Gift Card

  • Win a $500.00 Vancity Visa* Gift Card to spend any way you like – make an impact this season by spending it locally

Burnaby Heights Shopping Spree ($2,000 value)

  • One lucky winner will get to live large this season with a $2000 shopping spree in Burnaby Heights. Thirty four different businesses have contributed gift certificates and prizes: restaurants, specialty foods, florists, yoga, kids art classes and much more await you in your new favourite neighborhood!

Other prizes:

Clos Du Soleil Winery ($200 value)- Enjoy a private vineyard tour & lunch for two at Clos Du Soleil Winery in Keremeos, BC. Stroll through the tall Bordeaux varietal vines while learning about their sustainable practices and award-winning wines. Then, enjoy a locally-made lunch from the freshest ingredients while you take in the scenery.

Saul Good Gift Co. ($125 value) This prize will take your holiday entertaining up a notch (or two!). The Local Gourmand gift basket from Vancouver-based Saul Good Gift Co. is filled with locally sourced gourmet foods and artisan chocolates. Yum.

Toy Jungle ($200 value) Delight the special kids in your life with this $200 prize package from locally-owned Toy Jungle, with locations in Vancouver (Kits), South Surrey and West Vancouver.

Dayton Boots Gift Certificate ($100 value) – Handcrafted, comfortable, durable, and classic, Dayton Boots are made in East Vancouver to the same exacting standards and attention to detail that have gone into every pair since 1946. One lucky winner will get a $100 gift certificate towards a pair of their choice.

Dish the Dirt ($105) – For tidy and environmentally conscious folks, this five-month supply of ‘Dish the Dirt’ products — environmentally friendly, non-toxic, and biodegradable — will come in handy. (By triple-bottom-line Vancouver business LFT Group Brands Ltd.)

Hazel & Jools ($100 value) – A long-time fixture on Cambie Street, and now on Main Street, Hazel & Jools is a one-stop shop for women’s, maternity, and baby clothes. With their own locally made stylish collection and a curated selection of other brands, you’ll find lots of uses for your $100 gift certificate.

Bird on a Wire ($75 value) – This eclectic contemporary gift and clothing boutique on Vancouver’s Main Street offers a stylish collection of handmade and independent design from around BC. One lucky winner will win their choice of either a $75 gift certificate or a $150 abstract painting by local artist Catherine Fields from Bird on a Wire Creations.

This contest is in partnership with Vancity and The Tyee.

Civic Economics Release BC Study

 

Civic Economics is a respected and well-known organization that has produced a long-line of studies that indicate the economic impact of buying local. Local dollars are said to recirculate 2-4 times when spent with locally owned businesses compared to multinational organizations because they:

  • Recirculate greater profits in the community
  • Create more local employment
  • More often buy local products and services (especially local marketing and financial services)
  •  Donate more to local charities, non-profit groups and community organizations

In the BC study, Civic Economics assesses the local and Canadian market share of independent and chain business and calculates the economic impacts of locally owned business compared to their major North American chain competitors.

Here are some of the highlights:

Market Share

  • Local businesses in Canada have less than 1/2 the total market share on average. This has been dropping slightly each year since 2008
  • Market share by local business has dropped approximately 15% in the last 11 years in both BC & Canada
  • BC local retailers have the third lowest market share in the country. Local businesses captured just 34.7%  of the market in 2010, in front of only Alberta & Manitoba (tied at 33.1%) and Nova Scotia (30.8%). We lag the Canadian average of 41.8% and are way behind local market share leaders in Quebec (54.7%)
  • BC furniture & home furnishing stores have the highest market share by local business in the country
  • BC food & beverage stores have the lowest market share by local business in the country

Mulitplier

  • BC local businesses creates double the economic impact of their chain competitors. They recirculate more than 2.6 times as much revenue in the local economy as chains (46.3% compared to 17.8% for chains)
  • Local retailers recirculate 45% compared to 17% for chains
  • Local restaurants recirculate 65% compared to 30% for chains

Civic Economics cites the greater labour intensity of local restaurants compared to retail stores as the reason for the greater economic impact.

Buy Local

The impact of buying local, even a few more purchases each week, can have a big impact on the local economy and on communities across BC.

Civic Economics assessed the impact of consumers increasing local purchasing by 10% and found it would create

  • 31,000 jobs
  • $940 million in wages to BC workers

    Download the Civic Economics Study Here

     

 

Gandhi's Advice on Going Local

Michael Shuman (Going Local, Small-Mart Revolution) wrote an excellent post recently-Localization is Way to Redefine Globalization. In it, he contends that buying local isn’t just about feel-good sunshine and lollipops, but about “promoting global prosperity, sustainability and peace”. He argues against the notion that the North has a duty against going local because it might starve Southern countries of their livelihoods, and instead posits that the best anti-poverty strategy is to create self-reliance and model it for the South.

If we really want to help the poor, it’s far smarter to help poor countries, poor communities and the poorest residents living in them to achieve the same level of local self-reliance we seek for ourselves. Mohandas Gandhi argued that the way to defeat British power was to restore self-reliance, especially in basics like textiles and salt. He did not suggest that India embark on a campaign to attract nicer British factories or to expand exports to London.