Independent retailers are a huge economic engine in local communities. But in order to find out their role on the U.S. economy, SCORE researched the subject and compiled the latest 2019 retail statistics into an easy-to-understand infographic.
2019 Retail Statistics
Titled “Small Retailers Can Compete and Win,” it is a timely report because July is Independent Retailer Month. This is an annual “shop local” event which encourages consumers to support their local independent retailers.
Just how much are local retailers responsible for growing their local economy? The 2019 retail statistics and quotes throughout this article, which come from the Independent Retailer Month site, provide some insight.
“Each $100 spent at local independents generated $45 of secondary local spending, compared to $14 for a big-box chain.” — The Institute for Local Self-Reliance
When it comes to numbers, small retailers with 50 or fewer employees make up 98.6% of all retail firms. And they hire 39.8% of all retail employees.
These retailers have an average monthly revenue of $22,341, with an average gross margin of 51%. And when they make money, they reinvest more than large chains locally.
“Local retailers reinvest 130 percent more of their revenues than chain retailers and 676 percent more of their revenues than Amazon.” — 2018 Home Sweet Home: Locals vs. Amazon study
Speaking of Amazon and online retailers, ecommerce only comprises 9.46% of retail sales. And according to SCORE, 55% of online shoppers prefer buying from retailers with a physical store presence vs. online only.
So, while online retailers are getting all the headlines, consumers still want the experience of shopping in physical stores.
Getting Consumers to Shop at Local Retailers
The experience of going out shopping can’t be duplicated on a computer. But small retailers have to make the experience more attractive because, at the end of the day, low prices are a huge incentive.
SCORE says “Retailtainment” events attract, engage and retain customers. In 2018 more than 4 in 5 (82%) of shoppers attended a retail event and 58% said they will go to one in the future.
Some of these events are: exclusive access to items or sale (87%); party (81%); product demonstration or tutorial (80%); game or competition (71%); and pop-up shops (69%).
By attending these events, not only will you enjoy the social experience, but your support will generate local economic activity.
“A study in New Orleans found that if residents and visitors were to shift 10 percent of their spending from chains to local businesses, it would generate an additional $235 million a year in local economic activity, creating many new opportunities and jobs.” — Civic Economics
How Can You Compete with Online Retailers?
When you talk about online retailers, Amazon is the first name which pops up. But it is important to remember, the company only accounts for about 5% of U.S. retail sales. So, there is a great opportunity out there.
“For every $10 million spent on Amazon it creates 14 jobs vs 57 jobs when $10 million is spent at independents!” — The Institute for Local Self Reliance
While price plays a big role, convenience is one of the biggest reasons online retailers are doing so well. If you start providing the same frictionless shopping experience and give it a more personalized touch, you will see more customers walking through your doors.
On a blog titled, “How Brick-And-Mortar Stores Can Compete with Amazon,” SCORE provides some great tips. In it, Natalie Berg, coauthor of “Amazon: How The World’s Most Relentless Retailer Will Continue to Revolutionize Commerce,” says brick-and-mortar retailers can exploit Amazon’s weaknesses.
Berg adds, “Put more personality into [your] store. Stores are transitioning from the transactional to the experiential. The store of the future will be a place [where] consumers can eat, play, work, learn, discover and borrow things.”
This means you should focus on areas where Amazon falls short. You can curate a selection of products, have unique items, and make the shopping experience enjoyable.
As Berg says, “Amazon is great for purchasing, but not for shopping. They’ve taken the touch and soul out of shopping and made it simply transactional and functional.”
At the same time, you should also provide some of the options online retailers offer such as click and collect and accepting more payment options. The key is to make the online experience of your retail store an added value for your customers.
More 2019 Retail Statistics
For more numbers, take a look at the SCORE infographic below.
This means that retailing is still good. I guess it is because nothing beats getting the product in your hand before buying it.