By shopping locally, consumers could help maintain and create jobs that sustain their communities year-round. Studies from REV indicate that 67 cents of every dollar spent at a local business remains in the local economy, compared to only 43 cents for non-local businesses. This local “multiplier effect” is significant because local businesses often source products from other small businesses, creating a positive economic ripple throughout the community. As stated by Forbes, Small businesses account for 99.9% of all businesses in the U.S. and employ nearly half of the American workforce.
According to a report from The Hills, The COVID-19 pandemic hit small businesses particularly hard, leading to the permanent closure of over 100,000 small businesses in the U.S. In response, the American Express 2023 Small Business Holiday Report revealed that 2 in 3 small businesses heavily rely on holiday sales to remain sustainable. This holiday season offers a unique opportunity for communities to support local businesses and help them bounce back and thrive by consciously choosing where they spend their money.
One of the simplest ways to support local businesses is to shop small on major shopping days like “Small Business Saturday.” According to Data Axle last year, consumers spent $17.8 billion on Small Business Saturday in the U.S., highlighting the community's power behind this event. By prioritizing purchases on these days, shoppers directly support local business owners and send a message that their presence matters.
Social media serves as another powerful tool for supporting local businesses easily and at no cost. According to Luisa Zhou, positive reviews can increase customer spending by 31%. Holiday markets and pop-up shops are additional avenues to discover unique local goods while supporting small businesses. According to Forbes, 87% of consumers are more likely to purchase from a small business after having a positive experience at a holiday market. These events provide opportunities to engage directly with entrepreneurs and often showcase products unavailable in large retail stores.
Many small businesses have adapted by creating online stores or listing products on platforms like Etsy, allowing them to reach customers far beyond their immediate area. Research from Optinmonster indicates that online retail sales are projected to grow at a compound annual growth rate (CAGR) of 14.6% from 2021 to 2028. This means that the online shopping industry is expected to continue growing at a rapid pace for the foreseeable future. This year, consider browsing local business websites or marketplaces before shopping on larger retail sites to find unique gifts while supporting your community.
Supporting local businesses during the holidays has lasting benefits. Regular patronage of small businesses strengthens the local economy and makes communities more resilient. Studies show that communities with a high density of local businesses have more stable economies and higher median incomes compared to areas dominated by large chains. By being mindful of where to spend holiday dollars, consumers can enjoy unique gifts while positively impacting their communities. So, this holiday season, take the time to explore local shops, engage with business owners, and invest in your community’s future.
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