Online commerce not only competes on price with local retail these days, it’s also curating and recommending products like the department store buyer once did. Fab.com and Etsy have succeeded by facilitating the discovery of well designed products by small retailers and artisans to a mass audience. The upcoming Facebook Gifts product will recommend gifts to Facebook friends when an event, like a birthday, housewarming or birth announcement, is triggered. The breadth of curated product being offered to consumers threatens to overwhelm local retailers who need to compete not only on price, but attractive inventory. So how does the local retailer compete?
Two key reasons why consumers shop local is immediacy of purchase and physical confirmation of product, (i.e. making sure a shoe fits). Fab.com and Etsy can’t ship their products to you for delivery this afternoon — and it’s tedious for a consumer to filter product offerings based on retail location. That leaves room for hyperlocal retail directories like GatherLA.com, which curates designers in Los Angeles for discovery by local consumers.
I spoke with Jenka Gurfinkel, who manages strategy at GatherLA.com, which featured in last weekend’s LA Times: “The rise of Fab.com showed us how good design can be curated and packaged to a national audience. Katie Kay Mead, GatherLA’s creative director, leveraged her fashion retail experience and network to develop GatherLA as a venue to expose great design in L.A.’s diverse neighborhoods. At the local level, the discovery process of being able to touch and see inventory in one place is what will differentiate bricks and mortar from an online experience. On a global level, GatherLA has a second mission to show the world what is hot and happening in L.A., or other cities like San Francisco that we plan to launch in. It could set trends based on geography that may influence a new generation of designers”.
A third big reason why consumers shop local is to keep dollars in the community. A survey from American Express Open Forum shows that 93% of consumers believe it’s important to support local small businesses. Lesley Tweedie in Chicago is developing a commerce engine called LittleIndependent.com
Tweedie believes the “shop local” movement must move to online and mobile in order to compete toe-to-toe with big online retailers like Amazon that are constantly developing new ways — like iPhone price checkers or same day delivery — to disintermediate the local store. Merchant associations and chambers need to move away from staid chamber sites that nobody visits to promoting commercial movements like Buy Local Santa Monica. She points to corporations like American Express supporting SMBs with programs like Small Business Saturday, an initiative to get consumers to shop local on Saturday, November 24, as an antidote Black Friday and CyberMonday.
Tweedie, a bike shop owner herself, states that a majority of an SMB’s livelihood comes from simply being there. The community gets to know you by passing the store and word of mouth. The new challenge is to make sure that the store’s online presence is up to par with Amazon, something most stores can’t do on their own. GatherLA and LittleIndependent are two examples of a new kind of activism — retailers themselves developing the shopping channels that their peers can use so they all can enhance their local visibility.