Dene Dryden | Dec 3, 2020 AT 2:31 pm
Photo: Image by Chelsea Ouellet from Pixabay
(KNSI) – With a holiday shopping season that intersects with a once-in-a-lifetime pandemic, a push to support local businesses has come about to react to the COVID-19 pandemic’s impact on the economy.
While the pandemic has hurt some industries, others are doing OK. It’s a mixed bag, says University of Minnesota Extension educator Ryan Pesch, but there is a noticeable trend.
“Some economists have dubbed what’s going on now the ‘nesting economy,'” Pesch said, alluding to how parents will “nest” their home to prepare for a new baby. “A lot of us are at home, and with that … grocery seems to be doing great. Home improvement seems to be doing well; a lot of contractors are quite busy.”
But Pesch said industries like retail and hospitality are facing difficulties because of reduced travel and pandemic-prompted restrictions. This has pushed many small businesses to build online retail platforms, allowing for shipping, local delivery and curbside pick-up options that they didn’t use before. The online retail scene has traditionally favored larger companies, like Amazon, over small businesses.
“I think we saw a lot of innovation by independent retail to try to not necessarily compete head-on with these big behemoths like Amazon, but finding some way of saying, ‘Hey, we need to do online sales somehow,'” Pesch said. “It was this issue where it’s like a do-or-die situation.”
An August consumer research report from Accenture saysmore than half of U.S. consumers are shopping more often from local stores and buying locally sourced goods. The majority of those respondents say they plan on continuing to shop at local businesses after the pandemic.
It’s too early to tell if that will be true, Pesch said. During the Great Recession in 2008 and 2009, there was also a push to support local economies by keeping your dollars local.
“But, what we saw as we came out of the Great Recession, past 2010 … people kind of went back to their old habits,” Pesch said.
However, COVID-19 has deeply affected many people, from themselves getting ill or having a family member or friend die from the disease. That might prompt people to stick with their adapted shopping habits.
“Maybe it was a strong enough of an emotional experience for people that people have forever changed how they purchase,” Pesch said, “and how they feel this need or want to buy local, support their local businesses and support the local economy.”
Money exchanged through local commerce doesn’t end with that restaurant or boutique. Pesch said local businesses could use those funds to buy advertising with a local agency, hire a local accountant for taxes and so on. Locally made products also make an impact.
“I like to think about the difference between going into a gift shop and, say, everything’s made in a foreign country, versus going into a gift shop where everything’s made within a three-county area,” Pesch said. “That second gift shop is going to have a lot more impact on the local income, local wages, local employment, simply because the supply chain of the item that you’re purchasing is made within that region.”
According to Adobe Analytics, U.S. online sales in November and December are expected to be 33 percent higher than last year’s holiday shopping season.
