All around the world, we hear how retail is changing, with the growing demand from shoppers for local goods. During the pandemic we saw significant growth in buying from local retail stores, and in 2022 the focus has shifted from simply being about where the goods are sold, to the provenance of the items themselves. Shoppers want to buy goods that are locally made, grown or produced. For retailers who understand the pattern of how retail is changing, and have a retail strategy to address it, supplying locally made, grown or produced goods can be a powerful way to deliver a positive customer experience, increase loyalty and generate additional sales and revenue.

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This trend is driven by a ‘perfect storm’ of factors that have all come together in 2022.

  • Local economy first – shoppers understand the havoc that the pandemic wreaked on local retailers, want to contribute to rebuilding the local economy. In Ireland, research shows that 93% of shoppers want to buy local, primarily to support the local economy. In Australia, shoppers admire the way that local suppliers adapted to the lockdowns, and over 50% want to support them. In the US, the ‘shop small’ movement is growing, with 57% of Americans wanting to keep money local.

  • Sense of locality – the demand for locally sourced goods is part of an overall trend, accelerated by the pandemic, towards a greater sense of locality, particularly in younger people. In the UK, more people are considering buying food directly from food producers, and only 32% of under-25-year-olds believe the future of food shopping will take place in a traditional supermarket, down from 58% in 2018.
  • Environmental sustainability – shoppers’ have an increasing awareness of the carbon impact of transporting the goods they buy, and are making choices based on the source of their purchases, and the distance that goods travel to the retail store.

  • Cost of living – with fuel prices increasing, shoppers are driven to locally produced goods as a more cost-effective option. In the UK, 63% of respondents in a survey ‘strongly favour’ shopping locally, with the majority of them (72%) saying that this is driven by price.

Demand equals opportunity

The positive message for retailers is that whenever there is strong customer demand, there is opportunity. Stores that have a retail strategy to meet this demand can create an enhanced customer experience, driving loyalty and increasing sales and revenue.

So, what steps must a retailer take to make the most of this demand for local?

Firstly, a retailer must review the provenance of the items they sell, and how they can incorporate more local suppliers and goods. This may mean significant changes to their supply chain, setting up relationships with new suppliers and changing the product mix. But these can be introduced gradually – even a few locally sourced goods will offer a retail experience that attracts customers who want to support the local economy and from there, retailers can increase the range to keep those customers coming back and attract more.

Of course it’s not enough to stock local products, customers have to know that they are local – so signage and labelling is essential. 2D barcodes can give customers detailed information about the provenance of goods and the suppliers who provide them.

Promotions management  – along with labelling, promotions can be used to communicate about local goods. Promotion types might include tastings or cookery demonstrations for local fresh produce, or ‘meet the maker’ events. Local shoppers are often motivated by environmental concerns, so retailers should send promotion types to the shoppers’ mobile device using digital pass software, rather than on paper.

Flawless inventory management – retailers need to have full inventory visibility, to track stock through the supply chain. This is particularly for fresh produce, where time from farm to fork is a big drawcard for ‘buy local’ shoppers.

Retail data analytics – any new retail strategy should be assessed and measured, so retailers must monitor the impact that selling local goods is having on their sales and revenue.

Loyalty programs – selling local goods is a great retail strategy for building customer loyalty and an effective loyalty management system will keep them engaged, creating a sense of belonging and community.

The greater demand for locally sourced goods is a significant factor in how retail is changing in 2022, and in all likelihood beyond. For those retailers who can incorporate local products in their retail strategy, and implement the right retail management solution, there is a big opportunity to generate a positive customer experience and increased loyalty.

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