Research: Local Spending is More “Local” Than You Think


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Consumer Survey Front PageFor years, marketers like myself have relied on the old adage that says “80% of consumer spend occurs within 20 miles of home.”

On the surface the stat makes a lot of sense, largely because it’s how most of us shop.

The problem is, that stat is a myth. Plenty have cited it, but the source data was never there. This writer was called on it by an editor, only to find no evidence of any study or research.

We wanted to change that. My company is reliant upon generating consumer interest in local merchants. We need to know where people are going for routine purchases.

Plus, some things have changed in recent years. People are compressing into urban areas, which requires less travel but presents many more merchant options.

And even though it’s still only comprising about 8% of discretionary spending, ecommerce has to be accounted for.

So, we put together a national consumer survey, with specific questions about just how far people will travel to spend their money.

Over 2,000 responses later, here’s what we found:

90/20 is the New 80/20

What we found is that the classic 80/20 statistic is accurate, but a bit of an understatement. 90/20, or even 85/15, is more accurate.

93% of consumers say they typically travel less than 20 minutes to make everyday purchases.

87% won’t go beyond 15 minutes.

Breaking spending down into specifics, the more frequent the purchase, the less consumers will travel – 6 minutes for gas and 8 for groceries, but 19 minutes for clothing and 17 for movies.

And when you remove proximity as a factor, people look to price and quality (each was cited by 32% of respondents). Fitting with the data collected in our loyalty statistics database, just 6% were influenced by brand reputation and 7% by customer service. (On a related note, customer service doesn’t stand out as a purchase influence, but it’s the top reason people defect from brands.)

What Does This Research Mean?

On one hand, it confirms a local, in-store bias that consumers still have for routine purchases. There are just some things that ecommerce hasn’t quite mastered, like instant gratification, returns and exchanges, and real-time personal assistance.

On the other hand, it means these merchants have a narrow scope in which to focus their efforts. That’s a positive (it’s always good to have a solid, target audience to pursue) and a negative (what if you’re in an area with limited population?).

And for businesses in the B2B and online space, knowing where the majority of discretionary spending occurs provides a big target for influence and engagement. If your business can help people save on these purchases or enhance the convenience factor, you stand to win a lot of favor.

We’re going to be digging into the data and what it means for businesses (including online and B2B) in a free webinar on November 16 at 11am EST. Everyone who signs up for the webinar will receive the research summary early.

Brandon Carter
Communications pro with Access Development, a loyalty and rewards leader with the largest discount network in the world. Expertise in public and community relations, copywriting and strategy. History of service with technology, sports, consumer products, non-profits and more.


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