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01.31.2003 "Trends to Watch in 2003"
Getting a handle on what is relevant for the consumer on "all things local" often proves difficult. Perhaps a couple of observations would help explain implications of this trend.
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First, and contrary to conventional marketing and branding wisdom, applying the mantle of "local" is not a particularly effective tactic for those seeking to create highly differentiated products or experiences commanding the highest price/profit premiums. Instead, "local" proves most useful for purveyors of highly differentiated goods and services when it fosters unique narratives of a genuine spirit of authentic place and tradition.
Take a Parmesan cheese produced by a small, family-run dairy located in Appleton, Wisconsin and a Parmigiano Reggiano produced by a large cooperative in the town of Parma, Italy where the tradition of Parmesan cheese evolved for hundreds of years.
In the international marketplace, the designation of "local" has little relevance for the cheese from Appleton, Wisconsin. By contrast, the cheese from Parma, Italy makes a very different appeal to "local," in this case, an appeal to the indigenous spirit of place and tradition. It doesn't matter that the cheese is made by a large industrial food cooperative because the appeal here is to the "local place" of Parma, Italy and the "local" tradition of making Reggiano. This product is positioned to be easily distinguished in a crowded marketplace. A simple visit to a neighborhood market in the US will confirm that the Parmesan Reggiano will fare better than the Appleton Parmesan, with the Parmesan from Italy commanding, on average, 100 to 150 percent price premiums.
What motivates consumers toward local products? There are a host of societal and cultural factors that affect consumers and, therefore, drive changes in the marketplace. One of these changes is a shift toward companies/products/brands/services that embody values. "All things local" is a lifestyle - something demographics alone could not help marketers understand.
Consumers want to buy into products and brands that foster and support the lifestyle-oriented communities they value. Buying local gives them the direct link to extend and expand into their own community, empowering them and giving them the sense of belonging. They want to feel as if they know producers on an intimate level. They prefer to patronize companies founded by people who share a similar lifestyle interest, similar values.
There is a strong emotional benefit associated with buying products produced in one's own community. From a world perspective, core consumers are driven to purchase by a personal benefit that is derived from the feeling that one is "doing the right thing." For core consumers, acting in a way that they perceive to implicitly be "right" gives them personal satisfaction. This is one reason why core consumers are most likely to buy local organic products and shop a local co-op.
Consumers in the periphery are not as concerned or only have a mild interest in "local." Mid-level consumers occasion a farmers' market looking to their social network of friends, family and colleagues for knowledge on locally better (e.g., fresher, quality, etc.) products and also seek acceptance for their purchase decisions.
The Real Deal
As we've mentioned, the message "buy local" evokes an image and elicits an expectation of authenticity. It is no longer enough to merely sell items; forward-thinking retailers must also create, manage and sell authentic experiences if they hope to differentiate their stores in a way that has significant relevance with consumers. But, authenticity is intrinsically elusive, hard to create and, like seafood, is only good when it's fresh.
Authenticity refers to the desire among consumers, particularly those at the core of any given world, to obtain products that are "the real deal." Quality markers - such as ingredients and narratives of origin (e.g., local) - and the context within which a purchase is made are those factors that have the most influence on the perception that a product is or is not authentic. As a core consumer said, "Authenticity means something genuine; it's real, not just for show, something with human spirit in it. Authenticity is fairly hard to find."
We often hear from consumers in the core that they only shop small, local community-based stores in their search for truly authentic goods. By contrast, products found in mainstream channels are scrutinized very carefully before a core consumer will conclude that the product is authentic. Alternatively, the co-op many not seem authentic to a mid-level consumer who is used to shopping in conventional grocery stores. To them, their local grocery store represents what is authentic to their lives. Different worlds. Different consumers. Different lifestyles.
There is little doubt that "buy local" sends a strong message. However, the ultimate success of that message (e.g., selling more products, increased revenues, higher profit margins, improved quality image, repeat purchases, etc.) and its sustainability over time depends on any number of cultural, societal and lifestyle factors (among many others), all covered by this overarching principle, local or not: if it isn't any good, it doesn't matter.
Do consumers see "buying local" as a marketing ploy or the "real deal?" Consumers have told us in our research that buying local is important to them. Marketers assume it's a positive selling point, but is it?
We explore this topic in the upcoming Pulse Report, Buying Local from a Consumer Perspective.