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The Real Reason Customers Want to "Buy Local" -- and How to Leverage It

Talia Wunder had a career in accounting before opening a retail store full of local-only products in Santa Paula, California, in May 2011. Since Wunder is a former bean counter, I figured she would be the right person to ask about how much her local-only angle has helped her bottom line.

And the ex-accountant was positively giddy about the numbers from her first month as proprietor of The Best of VC Marketplace, which sells only products "made in (or invented in, photographed in, painted in, etc.) Ventura County," according to the website.

"I've been open four weeks and I'm amazed," Wunder says. "I covered all my expenses in the first month. I think that's a huge sign of success. And I haven't done any advertising. All I've done is word of mouth. I'm really incredibly pleased with how it's going so far."

Lest you think Wunder is an oddity, consider that a February survey of small retailers by American Express OPEN Retail Economic Pulse found that a sizable majority (57 percent) planned local campaigns in 2011. A similar amount (55 percent) felt "Buy Local" campaigns could help small businesses compete.

They may be onto something. A March 2011 issue of the Journal of Marketing Management had an article by New Zealand researchers reporting on a study of locally sourced store brands that found some benefit from being locally sourced. The benefits increased for stores that were also locally owned, researchers found.

The Buy Local movement didn't start this year, of course. One well-established program is the Buy Fresh, Buy Local campaign launched in Iowa in 2003 by the Center for Energy and Environmental Education at the University of Northern Iowa. Andrea Geary, local food program manager for the Cedar Falls initiative, says the dollar volume of purchases by retailers that partner with the program has grown by at least 10-fold since the program's start.

So what is it, exactly, that's so appealing to consumers about buying products locally? If you believe some advertisers, it's the "green" connection. But the environment may have little to do with it.

Geary, who advises farmers and also deals with wholesalers, retailers and consumers, says what people really want is the human connection -- they want to know a face behind the product. "It's about building relationships," she says. "People are hungry for that. No pun intended. It's what is driving the local food industry, making the connection between the food going in your mouth, the soil it's grown in and the people who are growing it." Geary says it's critical to tell the story of locally sourced food products when courting buyers.

Of course, in the food industry news stories such as the still-developing German E. Coli contamination episode also generate spikes in locally grown purchases, Geary says. Local producers can address fears of food-borne contamination by inviting buyers -- not just consumers, she stresses, since institutional buyers as well as wholesalers and retailers are also interested in buying local -- to visit production facilities to see how products are created.

Food products are the most popular items at The Best of VC Marketplace, Wunder says. The store stocks gourmet packaged edibles, chocolates, coffee, jewelry, art, photography, note cards, plants, scarves, purses and books by local authors or about the area. She's had to back off her original aim of selling only products manufactured or grown locally, broadening the definition to include items sold by companies that are based in Ventura County but do some manufacturing elsewhere.

That doesn't seem to be a problem for shoppers, she says. "I think people want the personal connection," Wunder says. "They want to know who their shop owners are, instead of the big corporations where you just get a computer when you call. Even more than the local part of it, I think it's the human connection."

Mark Henricks is an Austin, Texas, freelance journalist whose reporting on business, technology and other topics has appeared in The New York Times, The Wall Street Journal, Entrepreneur, and other leading publications. Learn more about him at The Article Authority. Follow him on Twitter @bizmyths.

Image courtesy of Flickr user paulswansen, CC2.0