In a recent post, we discussed why consumers want locally sourced products. Now, we’ll take a look at why sourcing local products should also be a priority for your business.
Sure, meeting the needs of your customers makes you profitable. That reasoning is simple. But there’s more to the story, too. Sourcing local products brings you closer to the values of your customers and their communities, making you a trusted partner in their success. Here are some of the reasons your business can benefit from sourcing local products:
1. Paying the Local Economy Pays You
The vitality of the local economy has a direct impact on the buying power of your customers. It is well documented that local businesses recirculate money into their local economies at higher rates than other businesses. In just one example, a report by the Michigan State University Center for Community and Economic Development cited research which tracked the recirculation of money spent at locally owned businesses versus non-locally owned businesses in Grand Rapids, Michigan. Findings showed that for every $100 spent at local businesses, $73 got recycled back into the local economy, compared to just $43 recirculated locally by non-locally owned businesses.
By keeping money in the community when you source local products, you put more money in the hands of your customers, giving them more resources and spending power with which to visit your store.
2. Demonstrate Your Commitment to the Community
Offering locally sourced products demonstrates to your customers that you care about their community and want to be an active partner in its health and success. Partnerships with local brands are also a great way to increase your own brand recognition with shoppers seeking out those niche or specialized products. Perhaps most importantly, sourcing local products shows your customers that you recognize and care about the place that shapes their own lives, which builds trust and loyalty with customers, encouraging them to keep coming back.
3. Become a Partner in Sustainability
Helping your customers make more sustainable choices by offering locally sourced products is another way to build trust and loyalty. Locally sourced products are often more sustainable than other products because of the minimal carbon emissions involved in transporting them. Sourcing these more sustainable products lets you ally yourself with customers’ values, making common cause with them and positioning yourself as a partner in their choices. This may be an increasingly important strategy for attracting customers as environmentally-conscious shopping continues to rise among younger generations.
4. Fresh Produce Can Make Or Break You
Here’s a big one. According to a Statista study published in 2015, 87% of U.S. consumers reported that the availability of locally grown produce was somewhat or very important in selecting their primary grocery store. If local foods are not available, a study by Kearney found, up to 30% of consumers will choose to shop elsewhere. It’s clear that sourcing local products is one of the most important things you can do to build a loyal base of customers.
This calculus is true for retailers of all sizes. Southeastern Grocers, which operates some 750 stores in 7 states in the Southeastern U.S., sources about 30% of its in-season produce from local growers in the region, according to its policy on local sourcing. Walmart, meanwhile, has also committed to sourcing locally grown produce. Locally grown products made up 10% of its total produce sales in 2015, bringing in $825 million in revenue. Walmart reportedly intends to increase that figure to $1.65 billion by 2025.
So what does it come down to? It’s what your customers want. As customers who seek to support their local economy, eat fresher produce, make sustainable choices, find local favorites, and connect with their food prioritize buying local products, you can step in to meet their needs.
Sourcing locally grown products is crucial to the success of your retail business because buying local matters to your customers, but also because it makes you a better community partner, builds trust and loyalty with shoppers, and empowers the local economy to buy from you in turn.
Are you looking to connect with local vendors? iTrade’s supplier discovery and procurement tools can help. Click here to find out more: Locally Sourced with iTrade.