It’s November. Swimming pools probably do not come to mind very often this time of year. Yet when Carbondale Economic Development Director Steven Mitchell thinks about shopping, especially during the holidays, he thinks of swimming.
“I look at it like it's water in the pool. You can do three things with water in the pool: you can pour water into it from outside, you can dip water out of it and pour it back in or you can dip water out of it and pour it out. When you're spending money locally by shopping locally, instead of dipping money out of the pool and putting it outside, you're dumping money into the pool and porting it back in. By not sending your money outside of the area, you're actually helping the economy simply by doing that,” he explains.
Let’s take the water analogy one step further. University of Illinois Extension Educator Susan Odum has been tracking what she calls “economic leakage” in 16 Southern Illinois counties since 2012. Odum analyzes and then shares with civic groups and others about the flow of dollars in and out of rural areas. For that reason, she is a huge proponent of doing business locally.
“When people go online or out of state to make purchases, it’s very unlikely that that money they spend will ever come back to their own region,” she says. “We talk about what that means for the community when dollars leave. It goes and doesn’t have the opportunity to come back to multiply and broaden the tax base.”
Odum calls the need to encourage others to shop local a “community development issue.” She says that economic research has shown that local spending has a multiplier effect, meaning that the impact of every dollar spent is much more than $1. For example, when someone buys tires at a local service center, that business is responsible for paying property and other taxes, utilities and salaries to employees as well as other expenses. Those employees, in turn, purchase clothing at a local shop. The clothier also pays taxes, employees and for repairs to her building. The repairman buys a pickup truck from a local car dealer who also pays his employees. It goes on and on.
If instead, the original tires are purchased online, the buyer pays with a credit card and the money does not leave the area without any sort of re-circulation.
“Studies have shown a multiplier of as much as seven in larger communities, but for many of our areas, it may be more like a multiplier of 1 or 2 simply because there are not that many places anymore to turn the money over and keep it going,” Odum says. “However, every time you do keep the money local, it supports the community, supports the tax base again and goes back into the community. When the money leaves, that multiplier is zero.”
Keeping dollars locally during the holiday shopping season is the thinking of “Shop Southern Illinois,” an effort of area chambers of commerce which encourages holiday shopping in any community in the region.
Mitchell says this area-wide mindset is a good thing.
“From a regional standpoint, we have to understand that not everyone can or should spend all of their dollars in one town. If I come to Carbondale and I can't find what I'm looking for, then I should drive Murphysboro or Carterville or Marion or to Anna or anyplace else in Southern Illinois,” he says.
Programs like the “Local Fir$t” campaign led by the Union County Business Women are making a difference and convincing residents to shop locally. Charlotte Clover of the organization says the effort has changed the way people think about where they spend their money.
“I think a lot of people have made a change in their shopping habits. They shifted some of those items that they can buy locally are now buying those locally where they didn't before because they were unaware of really the difference that it truly made,” she says. “They didn't realize how much it impacts things. Even though they were saving money when he went across the bridge to shop or to buy gas, they didn’t realize how it might affect our roads and bridges in our own communities, but I think they do now.”
Odum adds, “If we don’t spend our money in local places, why would others want to come here to spend theirs? When we shop online or in other communities, we’re cutting off our ability to support ourselves.”
She says that another reason to support local business is that the businesses support the community in many ways.
“I’ll often speak to local youth groups or classes about shopping locally and I always ask the students if they’ve ever been involved in any fundraisers for things like a graduation event, a band trip, 4-H or some other group. Without fail, the students say that they’ve done these fundraisers. I ask them then who do they ask for money and they always say, ‘well, we go to the local businesses.’ Then I ask them if they could write letters to Amazon or some other online company asking for their support and they look at me as to say ‘why would we do that, those companies aren’t here.’ I tell them that it is exactly my point. Local businesses are the ones that support you.”
Efforts to promote local shopping are bolstered by the Small Business Saturday campaign begun in 2010 by American Express. The day, observed on the Saturday following Thanksgiving, encourages shoppers to do business with small, locally-owned shops and businesses. Its estimated that 108 million shoppers visited small businesses during the 2017 day, spending $12.9 billion.
But for many locally owned businesses, the desire is to see consumers think about shopping locally all year long.
“Certainly, Small Business Saturday and the holidays are a time where a lot of additional money is being spent, especially in the retail sector,” Odum says, “but it really is something that we need to be doing consistently throughout the year. It’s not something where we can just go spend a little extra money in a small business on Small Business Saturday and think that that business is going to be good all year round. Companies can't make enough money in two or three months to support them year-round. We can't really think of it as just a holiday thing – shopping small. We have to go back in January and in March and continue to shop with them.”
Kelly Halstead-Reed, owner of women’s clothing boutique Bling It On in Herrin says there are many benefits to shopping locally.
“You develop a relationship with shop owners,” she says. “You get referrals and find out about other places to shop in the area. So many people don't really keep that benefit in mind. I think all of us should be aware of finding other businesses and have that forefront in their mind whenever we are doing our shopping.”
Halstead-Reed cautions about what happens if shoppers turn away from local stores.
“You find that the businesses decrease the number of employees or maybe they have to get a smaller location. It affects the economy,” she explains. “It's a trickle-down effect and it affects everything in the area.”
She says area business owners need to do their part in making shoppers want to do business locally.
“You have to make sure people know what you’re doing and what you’re offering,” she continues. “You have to be involved in the community and most of all, you have to offer good, old-fashioned customer service.”