For consumers, one of the biggest hurdles to supporting local shops is the ease and convenience of online shopping. Traditionally, it was thought that online purchasing simply took dollars away from our brick and mortar stores, but there are some new and nuanced problems popping up in our age of convenience.
Showcasing is a term that is emerging among brick and mortar retailers in the information age. With the technological benefits of smartphones, many customers check out tangible merchandise in a neighborhood store, and then search online to find a better deal. Some Internet retailers like Amazon.com have actively encouraged scanning product bar codes while in a brick and mortar store to find a better price online. An article in the Austin Statesman highlights what is at stake,
"A recent survey of 8,000 consumers found that 70 percent of consumers ages 25 to 54 with smartphones use them to comparison shop. Almost 1 in 3 of those who comparison-shop with smartphones ultimately buys the product online, the Kurt Salmon report said."
While comparison shopping is not a bad practice, it's important to be aware that the shop owner who has paid for the overhead and labor necessary to display these products is exploited by the showcasing phenonemon. We may be seeking better bargains, but at times we need to realize that there is a deeper cost. The practice of showcasing jeapordizes the local businesses that support our vibrant communities.
We ask you to consider this nuance. When you make the trek to your local retailer to check prices, consider supporting your neighbor by making a convenient purchase there. You will get the product you want and service from someone who is personally accountable to you, while keeping the sales tax in our own economy, thus employing teachers, firefighters, and countless other service providers and community-builders. Now there's a true bargain!
According the Sutherland Institute, since 2006 Utah has provided more than 100 tax incentive offers, totaling close to six million dollars, to out-of-state businesses in order to incentivize their relocation. However, according to a study by the Pew Center for the States, several states including Utah are not even doing adequate follow up to see if they are actually receiving the economic benefits these tax credits were meant to provide. Other states have been auditing these tax breaks and are finding that the projected numbers don't measure up against reality. We may wish to ask ourselves, how many jobs could have been created by a similar investment in 100 local businesses over the same five years?
Our posts here last week referred to national studies by Civic Economics regarding the economic impact of local business versus big box and chain retailers. Their findings help illuminate the picture regarding our tax policies and their consequences. It is time to start using our tax dollars and our local labor force wisely. Until we become better at auditing our tax benefits at the state level, lets consider the information we do have. The SLC 2012 Economic Study clearly highlights the benefits of investing in local entrepreneurs and business owners. Locally owned retailers are reinvesting their revenue in our own economy at almost four times the rate of national chains. As consumers it is hard to think that we can make a difference when it comes to these policy decisions; arguably, all we need to do is vote with our wallet. These studies highlight yet another reason to support your local business owner.
In Austin, Texas there is a team of urban thinkers called Civic Economics. Their self-determined raison d'être is to gather all the significant geographic, economic, and sociological data for a city and boil it down to manageable and meaningful figures. Once these figures are available, they are used by cities to develop effective strategies for sustainable growth. They are the best at what they do, and the studies they have done over the last ten years have gone far beyond the borders of Texas.
Civic Economics has worked with several cities in the United States and Canada examining the economic effects of shopping with local businesses. In a study done with the aid of American Express OPEN, Civic Economics found some good news for residential neighborhoods intersperesed with small and local businesses. According to the study, if you live within range of local business areas known as “indie hotspots,” your home values are going up. Factually, over the last fourteen years, home values near indie hotspots out-performed their counterparts city and county-wide by 50 percent!
Given this information, take a look at some of Salt Lake's unique neighborhoods, like the Avenues, Sugarhouse, 15th & 15th, 9th & 9th and the Granary District, just to name a few. All have walkable access to locally owned businesses. The Avenues is home to cherished coffee shops, candy stores and up-and-coming bistros. Coffee Garden outlasted Starbuck's in the 9th & 9th neighborhood. 15th & 15th has a solid block of some of the finest books, food and art the city has to offer. The Granary District boasts a substantial enclave of local business owners and workers with more to come. Salt Lake City has come a long way in the time I have been here, and with statistical analysis like that done by Civic Economics and your awareness as a consumer, it will only get better.