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Support the village: What SMEs can do to encourage consumers to buy locally

by OnDeck Australia,   Oct 20, 2020


The COVID-19 pandemic has caused challenges for the Australian economy, but it has also revived the shop local movement as Australians begin to opt for local products and experiences. 


Small businesses such as cafes, newsagents, and bakeries are the lifeblood of our communities, and by encouraging residents and visitors to ‘buy local,’ they can also help keep money circulating through their regions.


Kate Mather, the principal of South Coast Artisans Online Shop, says, “Consumers are shifting to safety and convenience during this time, and this is playing into the hands of local SMEs.”

NSW South Coast-based entrepreneur Kate designed the online shop to support local businesses impacted by bushfires and COVID-19. The online shop features many small to medium-sized enterprises. These businesses range from potters, fashion designers, candlemakers, jewellers, photographers, freelance writers, kelp farmers, beauticians, and card designers.


Types of ‘Buy Local’ initiatives


Gift card loyalty

Gift cards that are limited to businesses in a specific region or town are a valuable way to encourage local spending. Gift cards can be purchased directly from local SMEs or online and given as presents, charity aid or used as raffle prizes. Gift cards work exceptionally well when supported by a business chamber, local council, or large local organisations such as charities, clubs and other larger private businesses.


Dijana Thompson from BDT Business Consulting advises a ‘specials’ day to announce the gift cards is a great way to launch the campaign. “Typically, the campaign will kick-off with significant discounts for consumers who are members of the loyalty campaign,” she says. “They might get bigger discounts limited to that day only.”


“When using the card, consumers will also earn reward points for future purchases with participating businesses,” added Dijana, who has worked on many buy local campaigns.



Community currency creates recognition

While each currency program is unique, it generally involves the charitable distribution of cash-style vouchers, which can only be spent with businesses in a particular town or region. Local SMEs exchange the spent vouchers for cash with the entity that organised the currency campaign.


While these schemes might sound like a barter trading exchange, Dijana says research indicates community currency campaigns have tended to work best in regional areas. “This is just another type of reward system to encourage consumers to shop locally,” she explains. “If these vouchers are in place, it encourages the consumer to go to ‘John the Baker’ for bread rather than a big supermarket.”



Regional marketing campaigns

Dijana says successful buy local campaigns require as a bare minimum an identity logo, a website, and social media campaign. In southern Sydney, the St George Business Chamber of Commerce’s “Buy Local/Stay Local” campaign provided participating SMEs with social media support, including the #buylocalstaylocal hashtag, and an advertising tool kit including posters, stickers, and shopfront branding. Moreover, the campaign received traditional media support through local radio station 2NBC 90.1 FM and St George and Sutherland Shire Leader newspaper.


“To make the most of these campaigns, participating SMEs must create customer stories demonstrating how the personal touch is important for shoppers,” advises Dijana. “For consumers, the message is simple. By buying local, you are rewarding yourself as the money you spend will be reinvested in your local area.”



Procurement policies

Procurement policies that encourage big business support for local SMEs have a significant impact.


Councils and larger businesses can lead the way in supporting their region through the implementation of local procurement policies, says Dijana, that give local SMEs a chance to tender when they considering the acquisition of goods and services. “Where contractors are needed, large and small businesses are encouraged to use local SMEs.”




Prepared by OnDeck Capital Australia Pty Ltd ABN 28 603 753 215 (“OnDeck”) for general information purposes only. Content may belong to or have originated from third parties and OnDeck takes no responsibility for the accuracy, validity, reliability or completeness of any information. Information current as at October 2020. You should not rely upon the material or information as a basis for making any business, financial or any other decisions. Loans issued in Australia are subject to the terms of a loan agreement issued by OnDeck. Loans are subject to lender approval. OnDeck® is a Registered Trademark. All rights reserved.



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