I will tag this post ‘local’

There is a battle going on over what ‘local’ really means. I figured that it would be rather good fun to jump into the fray. So here I go.

I was informed of the rising storm on the fourth of August, sometime in the evening. A twitterific update by one of the JFP’s self referential accounts indicated that ShopLocal had ‘declared war’ and linked to this JFP article with the details. This is what had happened.

A JFP article criticized ShopLocal, the Clarion Ledger and the parent company of both, Gannet, for the misleading use of the word local. ShopLocal responded in a post which tried to belittle the JFP and claim that ShopLocal itself was local. This then led to the twitter post and article which came to my attention.

Its a bit odd, the ShopLocal post. The title asserts that they are local (it actually says that explicitly, “ShopLocal IS Local” you can tell they are serious because even the ‘is’ is capitalised), but their article provides absolutely no support for it. Their article is dedicated to saying that national chains can actually in some sense be considered local (more on that later). They end on the surprisingly weak point that they “support” local retailers. By this, presumably, they mean that they take local retailers money in exchange for advertisement. Support really isn’t the right word, they provide a service, for which they get paid; they are not investing in local businesses, they are quite literally taking their money. I will allow them this massive discrepancy and focus on their two separate claims.

The claim that ShopLocal supports local businesses rests heavily on their definition of local. By clarifying the definitions as they are used in daily parlance, I will disprove both main claims made by ShopLocal. The three definitions of local they provide are absurd. The presence of a business is the only factor in determining if it is local:

National-local: These are stores that have a national footprint, but still on a granular form have local market presences across many communities and cities.
Local-local: These are stores that are only found in one region. Examples include a small up & coming chain or a successful multi-location family business.
Hyper-local: These are stores that are only found in one (1) and only one town. Typically, these are referred to as mom & pop type operations.

It is easy to see that the only consideration is the distance from a certain town in discerning if it is local or not. So presumably this makes every Wal-Mart a local store, because, they are, after all, located in only one place. Actually, this makes every business a local business wherever it is located. Toyota becomes local – they have a dealership here, Nissan even has a plant nearby! This is kind of like HSBC’s marketing slogan “The world’s local bank.” Even though it is based in London, every HSBC branch is a local business, according to ShopLocal. Furthermore, if you have internet banking, HSBC has a presence wherever your computer is. The ‘local’ locations are endless! This means that while I was in Bristol, England, Trustmark National Bank (based in Jackson, MS) had a local presence in England – making it both local and international at the same time!

To define “local” we must look at what people mean when they use the word. The meaning is easily multifaceted. There are considerations like the distance of a business from the reference point (community, city, etc) which ShopLocal understands. People refer to places as local when the management has a local presence, understands the clientele and can respond to community needs and wants. This is roughly having not only local management, but also locally autonomous management. Lastly, the local business model that many people cite comes from a more economic standpoint – a local business is one that invests in the community in which it is based.

In Bristol, my Local (pub) was about a 90 second walk from my house. This is clearly very local in the grand scheme of things. The problem is, there were four other licensed establishments (excluding the restaurants!) which I had to pass in order to reach my Local. Did this make The Cat and Wheel less local than the others? While distance and location play a role, its not the whole story. While being a local business implies that the business is located in the locale in question, the implication is not an equivalence: merely existing in the locale in question does not imply that the business is local.

Pretty much any store, no matter how large the chain, has locally based management. When Brookshires grocery store opened in Jackson, they imported some managers from Texas to run the individual stores. The managers lived and worked in Jackson from that point on. When people talk about a business being locally operated, what they really are talking about is where the autonomy of management lies. Local management can react to the communities needs, desires and tastes; this generally means a management more responsive and dedicated to the community it serves. With a large corporate chain such as Wal-Mart, there is little autonomy of management at the local level. Each store looks the same and sells the same products. Local management is a matter of corporate paperwork, shift scheduling and signing off on deliveries from the corporate truck fleet. Local Wal-Mart management cannot actually manage the store in a way that reflects the community around it. Local products and local tastes are not found in Wal-Mart stores. Sure, they sell Mississippi Blueberries in some stores but that took negotiations by the state Agriculture Commissioner to achieve. On the other end of the management spectrum there are chain stores which really only carry the brand. In the Shell station in Macon, MS, the local management is fairly autonomous from Royal Dutch Shell corporate headquarters in The Hague (click here to listen to that in Dutch). Sure, the station carries only Shell gasoline, and pushes Shell credit cards on you, but they also have a deli which serves up breakfast, lunch and dinner for the town. Besides the branding, the stations management is free to shape the store to local taste, and adapt to feedback from local customers (and yes, I do realize that the management probably does not even live in Macon, and probably manages many other stations, but my point remains). Even with locally responsive/autonomous management, nobody would mistake the Macon Shell for a local chain. If you ask for something at CVS, the management will have to get permission from higher management to carry the item; if you ask for something from Deville, they will pick up the phone and place an order without having to ask permission.

Investment in local communities is what motivates many people to patronize local businesses. Somewhere on the interwebs there is more exact information on the topic, but the general idea is as follows. For every dollar in revenue, a locally owned and operated business will make a larger contribution to the local economy than an out of town chain. Take this example of two fairly identical stores, one a locally owned drug store, the other being an out of town chain. Since each is about the same, their taxes and utilities will be roughly the same. So for a dollar spent in each business, say, ten cents goes to taxes and utilities. We can now ignore that ten cents. Another fifty cents may go to covering the wholesale cost of the product bought – so that goes to the product maker/distributer. Chain stores can often lower this cost as they own distributers or can negotiate better prices from the maker, but thats pretty much irrelevant in this simplistic example. Say another ten cents goes to pay wages of the workers. The remaining thirty cents is profit, this goes to the owner of the company. With a chain, this goes to headquarters, way out of town (or to shareholders worldwide). With a locally owned business, this stays in town, with the owner returning that money to the local economy when they shop, eat out, and donate to charity. So thats the idea, when you shop locally, the local economy does better. Instead of acting like a drain for local dollars, local businesses act as a fountain, supporting businesses all around them. The idea is, this is a good thing. As a bonus, if a business uses local suppliers, those suppliers support the community even more. Why politicians spend their time trying to attract companies to open branches locally is a mystery – encouraging local entrepreneurship would grow the economy and boost tax revenue much faster.

The other day, I used an online service provided by a company called Google. I used this service to find the website of Deville Camera and Video, a locally owned business. So, I guess that ShopLocal would say that Google is supporting local businesses. We cannot really, on anyones definition, debate that Deville is a local company (they even have a big sign when you go in the store that says they are, with proof, and thanks the people who support them – the ones who give them money in exchange for goods). Google has done pretty much what ShopLocal would do: provide me with information on this establishment, including a list of all services they provide. If you aren’t convinced, Google even has the power to suggest local businesses that I have not even heard of when I only know the business type and location (just type in something like “camera shop in jackson, ms”) thus encouraging me to patronize these businesses. Google has done this without taking money from Deville though, so I guess they are just more altruistic in their support of local business. Should we call Google a local business? (What about local.google.com? Its got local in the URL!)

Google is not based in my house, it does not invest in my house and I do not have a say in the searching algorithm. Google is not local. ShopLocal is based in Chicago, the owners and operators are in Chicago and they do not actually support the Jackson community. ShopLocal is in no way local to Jackson. It doesn’t even appear that one could say that the retailers who advertise on their site (see below) could even be considered to be local businesses. There is a difference between having a local address and being a local business.

**UPDATE** Time has an nice article on the buy local point. This is besides all of the stuff in the JFP.
http://www.time.com/time/business/article/0,8599,1903632,00.html