This article was originally written and published by Ruth Cooper for RetailBiz and used with permission.
Australians are increasingly turning to large businesses over smaller independent retailers, with only half (55 per cent) of shoppers believing they can find almost everything they need in their small business community.
This number is down from 66 per cent in 2016, according to research announced today from American Express.
The Economy of Shopping Small report was released to launch the American Express Shop Small campaign, a month long event that encourages shoppers to visit local businesses during November.
Katrina Konstas, American Express vice president for small merchants, said it is important for Australians to shop small because of the ‘boomerang dollar’ effect. While independent businesses have long been recognised as a source of employment—small business employs over 40 per cent of Australia’s workforce—the effect of spending money locally goes well beyond the business itself.
On average, 42 cents of every dollar spent at a small business is reinvested back into the local community. Money spent with small businesses finds its way back to communities through salaries to residents (27 cents) and payments to local suppliers (12 cents), while the remaining 3 cents is used to support and local charities, schools and sponsorships.
“What goes around comes around,” said Konstas. “The ‘boomerang dollar’ effect shows that almost $38 billion is reinvested into our communities every year through local spending—that’s a huge amount that’s going back into businesses’ tills, workers’ pockets and towards worthy community causes. Shopping small can have an enormous effect.”
American Express’ research shows that smaller retailers help drive this spend, with 75 per cent of retailers stating they encourage their customers to shop in other local small businesses.
This collaborative approach is working. In fact, those with strong neighbourhood networks reported increased sales through referrals (59 per cent), a sense of satisfaction from supporting neighbourhood economies (40 per cent), and increased customer reach (45 per cent), demonstrating that it pays to stick together.
However, retaining customers remains a major concern, with 56 per cent of small retail owners noticing their customers are becoming less loyal.
Shop Small runs from 1 to 30 November. American Express Card Members registered with the Shop Small promotionwill receive $10 credit for every $20 they spend in participating businesses, up to a total of $50.
You can read the original article here on Retailbiz.com.au