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[7 comments]

Does Buying Local Work for E-Tailers?

December 17, 2013

To promote "shop local" online shopping with Chicago retailers, a group of Chicago's top brands and some of its local retail customers banded together for the BUYCHI effort.

The one-day event took place on Friday, Dec. 13, with all participating brands listed at the website buychifriday.com, and social media efforts carrying the hashtag #BuyChiFriday.

The brands included Walter E. Smithe, Vienna Beef, Vosges Chocolates, H2O Plus, Sausages by AmyLu, Winestyr.com and Uncle Dougie's Sauces. Participating retailers included Click Shoes and More, Luxury Garage Sale and Lucila's Homemade.

"Buying local is good for everyone," said Tim Condon, CEO of Uncle Dougie's, which ships high-end BBQ Sauces, Marinades, Rubs and Bloody Mary Mixes all over the world, in a press release. "It means employment, tax revenue and cash staying in our community vs. going out of town — and we can all get behind that."

This is the first year of the effort, but BUYCHI is expected to become an annual program to raise the visibility of local Chicago online companies during holiday time.

In a wider push, BikeStoreGuys.com was launched last year by a co-op of bike stores to help local cycling shops compete against national e-commerce sites. Customers can order a bike online and pick it up in a local participating store, or have their parts and accessories shipped directly to their home. In either scenario, customers' dollars are going back to local independent bike shops in their communities.

BikeStoreGuys.com's founders said the majority of customers prefer to buy local to support their community, and also appreciate the expertise their local bike shop provides.

"Time-challenged consumers need point-and-click convenience," said Derek Stepanek, owner of Northtowne Cycling and Fitness in Cedar Rapids IA, a participating dealer in the Bike Store Guys network. "While we each have our own local store websites, Bike Store Guys gives us the ability to combine our resources with other shops to compete online on a national level and still support the 'buy local' movement."

Discussion Questions:

Can "buy local" also be an online opportunity? How would you assess the opportunity for e-commerce versus successful buy local campaigns at physical stores?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

How would you assess the e-commerce potential around buy local campaigns?

Comments:

Many consumers would prefer to buy local. If the merchants can 1) make the public aware of this program, and 2) include a promotional incentive to make a purchase on a specific day, they could drive sales and profits. It doesn't matter that the program is online. Online is another medium, another way to reach consumers.

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Max Goldberg, President, Max Goldberg & Associates

Many consumers will buy local to support their community merchants, especially if they perceive that "local" retailers offer quality service.

The discussion question posed is whether there is an opportunity for e-commerce. Most local and regional retailers already have an ecommerce presence. But many do not have the resources or talent to maintain top quality ecommerce and social media marketing like the national players and dominators like Amazon.

If regional merchants can join forces around key events and campaigns promoting the value of "local" they can be more effective together online. This especially applies to social media which can be used cost effectively to create an "umbrella" for the local aspects of the campaign.

The article points out an excellent example of how this worked with the bike shops creating a combined "local" online presence through BikeStoreGuys.com.

This model can and is being applied to collectively market local farmer's markets, as well as groups of local merchants in a local area. I have even seen a group of small IT stores within a Asian Mall create a very effective "local" online presence promoting their collective value and offerings.

To the omni-channel consumer, there is no separation of store and online. Leveraging "local" through ecommerce is both "natural" and effective.

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Chris Petersen, PhD, President, Integrated Marketing Solutions

While I personally like to buy local, as a rule I am not going to do it if the prices are significantly higher. The same omni-channel opportunity that faces any retailer is available so being able to buy online, pick up in-store, or buy in-store and have shipped to home is possible.

The Internet and mobile are changing the game for all retailers and the opportunity exists for local merchants to capitalize on the trend.

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Bill Davis, Director, MB&G Consulting

It all depends on what people can afford. I really can't help wondering whether even Amazon would be less successful if not for their capacity to massively under-sell all their competition.

Size matters, as well, when it comes to availability of stock. If you can't get the right size, shape or color, all the good will in the world might not close a sale.

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Bernice Hurst, Contributing Editor, RetailWire

We should embrace local merchants where they make sense, including online. Why should an online business opportunity be treated any differently than a brick and mortar purchase? All of us should have learned from the Amazon book of business that the comfort and convenience of online shopping is the trend of today and tomorrow, as well as local or national. It is not where you are but what you offer and at what cost!

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Kai Clarke, President, Kowa Optimed, Inc.

I think we have all see the numbers showing the dramatic increase in online sales in the days between Black Friday and Cyber Monday this year, so why not capture the consumer's love for online shopping with an online "buy local" campaign?

I like #BuyChiFriday and the fact that these Chicago online retailers united to raise the visibility of their businesses by creating a one day only online shopping opportunity.

Buying local supports small businesses, keeps funds in the community and creates jobs, whether the sale is made in-store or online.

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Karen S. Herman, Founder & Design Director, Gustie Creative LLC

Destinations like bikestoreguys.com are another twist on local marketplaces, which are another twist on local co-ops. All have middling success online as they try to replicate bulk buying, greater selection, and co-marketing of "buy local" movements.

What are the benefits? By banding together, merchants get bulk buying purchasing power. They distribute overhead for administrative costs. They share ideas (sometimes). They gain greater selection and better economies of shipping. Through co-marketing they can lower their advertising costs and improve their visibility.

However, these tend to be diluted online. There are other ways to tap into bulk buying such as suppliers with direct shipping. But established e-marketplaces have a leg up on selection. And local merchants can't replicate the marketing advantage of heritage it's much easier to remember the corner coop location than recall the URL from a sea of choices.

What about the feel good factor? Harder to simulate online. Shoppers don't get the same feeling of supporting their local communities when they hit the buy button. And there's competition for good feelings: AmazonSmile now allows buyers to direct .5% of their purchase to a charity of their choice.

Overall, I don't see an advantage for local marketplaces online. The benefits are diluted. And if you succeed, you pay a price in revenue share with the marketplace and dependency on a third party. Local events like BuyChiFriday stand a better chance by calling attention to local merchants for concentrated periods.

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Dan Frechtling, Vice President, Global Product Management, hibu, PLC

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