Following on from decades in which the retail industry was on a steady path towards supersizing, the pendulum has started to swing the other way. Consumers across Europe, the UK and the US are embracing “localism”, directing their cash away from megastores and multinational brands and choosing instead to shop small. In this report, we look at the context of the trend, which subtrends are influencing it in 2022 and whether it can survive the high inflation and global food prices impacting consumer spending power now and into the future. 

What is Localism?

According to Think with Google, localism is “a consumer preference for brands and businesses located geographically nearby that engage the specific needs and behaviours of local communities and tap into location-specific culture.” It is also known as the “Shop Local” trend.  

Localism: the context

Even pre-pandemic, the beginnings of a consumer shift away from big brands and superstores towards small, local shops was beginning to disrupt retail. COVID-19, like it did with so many trends, accelerated localism at an unprecedented pace. 

People across the world, already becoming more curious about the retail opportunities in their close community, were forced to stay home and, as a result, started thinking and shopping local. Research from Deloitte found that 59% of British consumers used local stores and services more regularly during lockdowns. The localism trend has changed not only how we consume but also how we engage with brands. 

Post-COVID, consumer values have tended towards a more ethical, sustainable, personal style of shopping and the localism trend, encompassing all this and more, is at the forefront of the new wave.     

This does not, however, mean a return to how we shopped before malls and the internet; rather it is an evolution that incorporates online shopping, social media and tech as tools to promote a new, more localised type of consumerism. 

As restrictions eased and the world began to open up, the ‘shop local’ trend has seen a further boost as consumes show a renewed commitment to local communities. Accenture found that 56% of consumers are patronizing neighbourhood stores or buying locally sourced products, reflecting the trend’s staying power. 

This is fuelled also by increased consumer dedication to sustainability, ethics and provenance. Indeed, a BCG survey found that COVID-19 prompted nearly 95% of respondents to say “they believed their personal actions could help reduce unsustainable waste, tackle climate change, and protect wildlife and biodiversity.” And it seems that localism is the way forward.  

The trends influencing localism

Consumer ethics

In the mind of the consumer, there is a strong correlation between buying locally and buying ethically. Localism has been and continues to be fuelled by the increase in conscious consumerism: buying authentic, locally-made and sustainable products that directly support the community. Even at the beginning of the lockdowns, the trend had seen a big boost with a report by Kantar in May 2020 showing that 65% of consumers preferred to buy from their own country and 42% stating they were paying more attention to the origin of products. In 2019 the Edelman Trust Barometer showed that 81% of people believe that whether a brand does “what is right” is a dealbreaker when it comes to choosing to buy from them. 

Sustainability

Similarly, the retail trend towards sustainability had a big part to play in driving localism forward. Shopping at local businesses reduces carbon emissions by cutting down on transport costs and packaging as well as, in many cases, providing direct support to local farms rather than industrial food facilities. 

Community support

The pandemic brought out a sense of community as people came together faced with the difficulties brought about by COVID-19. Seeing local shops and businesses suffer from strict lockdowns made customers more aware and appreciative of them. It promoted a sense of community and togetherness and when restrictions were lifted people started making more of an effort to patronise businesses close to them. In this way, they connected with the shop workers and owners on a personal level, forming habits that are likely to stick into the future, particularly as people continue to work from home. Barclaycard found that, although overall consumer spending dropped in early 2021, independent stores such as greengrocers, butchers and bakeries saw growth of almost 40%.  

Consumers are gaining awareness of the benefits of supporting their local community. A survey by Mint showed that 57% of Americans chose to shop local to keep money local while 28% stated that they shopped small because it meant they got better service. The return to local business and shopping represents a change from the past few decades in which small and large towns alike have been witnessing the ‘death of the high street’. 

As consumers rediscover the joy of shopping local and reconnect with their communities, it is possible that this could be a path to economic recovery. Shopping, particularly for people in the UK, is a popular passtime; research from Attest showed that 60% of Brits go shopping weekly or daily. If the shop local trend continues, it may lead to a rebirth of high street and town centres; populating them with location-specific shops and services and giving them back a sense of identity and personality. Indeed, research from ThoughtWorks found that less than half of UK shoppers expect to buy their food from major retailers or supermarkets in the future. 

Increasing awareness of food systems

In the years preceding the pandemic, the trend for cheap, fast, readily available food was putting greater distance between the consumer and their food, with many shoppers unaware of the hidden costs of low prices and convenience. 

Research by the Food Standards Agency and Bright Harbour found that the pandemic changed both consumer behaviour around eating and buying food and their thoughts about food systems themselves, with many reporting more awareness of elements like supply chains or the global complexity of our food systems. Thanks to empty supermarket shelves, reports of Covid outbreaks in food facilities and labour shortages, the report found consumers showing a deeper engagement with the workings of the food industry.  

The localism trend is helping to close the gap between consumers and their food. People are more aware of the ‘air miles’ of what they eat and place more value on buying locally produced food. This also promotes a greater connection with the community; consumers want to hear the story of the food they’re buying and, as a result, there is an increased focus on transparency and movements such as ‘farm-to-fork’.

Connection to food

Furthermore, the pandemic and the lockdowns made consumers’ worlds much smaller and, as a result, food started taking on a larger role. With people eating at home more than ever and showing an increased interest in cooking as well as a greater preoccupation with their health, consumer attention turned to the quality and origins of their food. 

In its study ‘2030 Britain’, ThoughtWorks reported that less than a third of Gen Z believe the future of food shopping will take place in traditional supermarkets and more people than ever are considering buying food directly from food producers, both online and offline. ThoughtWorks also found that 39% of shoppers will consider supporting local farmers when buying food and 40% stated food provenance as an important issue. Farmer knowledge and information around the implications of what we choose to eat is more readily accessible than ever, ensuring consumers will continue to be empowered to make better choices for our food systems.

Even before the pandemic, there was a trend towards buying local and now there is more choice than ever. As knowledge around buying locally and sustainably increases, technology is being developed and is helping to break down barriers to accessibility. Not only is it easier for consumers to physically seek out producers and farmers, there has been huge growth in e-commerce for local businesses and companies seeking to connect consumers with producers.    

Opportunities online

Naturally, the pandemic saw a huge rise in online spending and, although megabrands like Amazon saw massive revenue increases, there was also growth in e-commerce for small, independent businesses. Consumers began to discover and buy from smaller brands online as it became easier and easier to buy on social commerce platforms, particularly Instagram. Platforms like Instagram help small brands connect with new customers in their area thanks to precision-targeted ads. Social commerce has not only created a new, exciting revenue stream for small, local and independent brands but also made people more likely to buy based on product rather than brand. Research from EGC Group reported higher and faster conversion rates for online shoppers due to a simpler, one-click checkout process and also reported that consumers are more and more likely to buy from new brands. 

Accenture reported that consumers are also looking for products that feel authentic and artisan and are therefore increasingly likely to buy from online retailers that champion these types of products. Etsy, an online marketplace for small, independent makers, saw a massive boost in sales during the pandemic.  

The future of localism

Research from Barclaycard in 2021 showed that, post-pandemic, 71% of shoppers said they now think more carefully about how they spend their money and 92% of them plan to be more mindful of their spending habits. In 2022, with rising rates of inflation and an increasing cost of living, will the localism trend survive? Admittedly, there is often an increased cost when buying from smaller, independent retailers compared to a supermarket or larger retailer. However, many elements of the localism trend would suggest that, despite rising food prices, consumers will nonetheless continue to favour shopping local. 

The post-pandemic consumer awareness of food systems has shone a light on the fact that if something is cheap, that cheapness is impacting someone somewhere along the supply chain. The increased value people are placing on transparency and community would suggest that consumers who have the means will likely still direct their spending locally towards business that align with their ethics and sustainability. Naturally, many lower-income consumers will probably look to budget stores and supermarkets to provide them with affordable food but there is increasing evidence to suggest that some, instead of changing where they shop, will change what they buy, opting for fresh local fruits and vegetables and reducing their meat and fish consumption. In many cases, it is more economical to buy directly from the producer than from a retailer and developments in technology and e-commerce are facilitating this more than ever. Furthermore, as access and knowledge increases, consumers across all income brackets will be able to make smarter choices when it comes to getting the most for their money.    

Opportunities for field marketing agencies based across Europe

If the localism trend is here to stay, it could mean a shift in strategy for multinational clients to approach local markets through a network like the EFMP, giving them European reach through local experts. With customers increasingly engaging with the nuances of their region, district or even town, it is important to be aware of the specific elements contributing to consumer behaviour in each place. If spending is moving away from large, homogenised stores and retailers, it will be necessary to have a thorough understanding of how the smaller, local and independent retailers operate and how they are impacted by market conditions and the EFMP parners in the region will be best placed to do this.  

Furthermore, as we have seen, the localism trend ties into a number of customer values that could modify their future spending behaviour, particularly in situations like those we are currently facing, with rising inflation and food prices running high. Campaigns should reflect the community and togetherness aspect that has a strong influence over localism as well as promote the sharing of knowledge and information on how to find and support small businesses in the nearby area.