Posted by: nickgerlich | January 27, 2008

Live Locally, Buy Globally?

Today’s Amarillo Globe-News carried the banner business news that our fair village will soon see a doubling of the number of Starbucks. While this may seem like an enormous market expansion for the Seattle coffee giant, consider that we only have 4 in town at present. In fact, our current SBX index is one store per every 46,250 people (or 0.02 stores per thousand), a far cry below that of coffee-saturated San Francisco (with about one store for every 10,000 people, or 0.1 for every thousand).

Local coffee retailer Roasters is up for the challenge, says owner Craig Gualtierre (a former student of mine). He also plans at least one more new store in the next year. “There’s no storm for Roasters when a chain comes into town,” Craig said in the newspaper report. “Amarillo is firmly local – very local,” he added.

Buy LocallyAnd that is what has me concerned. He is right. Amarillo is staunchly loyal to its homegrown businesses, ardently supporting the local operators even if there are better alternatives. Amarillo National Bank, Toot-n-Totum, and Donut Stop are three other local examples that have stood strong. It is little wonder why many national chains are reluctant to come to this town, when people dig in their heels and make them feel unwelcome.

This is even more of an issue in the era of e-commerce, which has the effect of completely removing geographic boundaries. In a nod to Thomas Fredman (The World Is Flat), e-commerce does not know local from distant, nor does it care. In the retail selling space known as my living room, I can scan the bazaars of far flung cities, and buy whatever my heart desires. It matters not if a product is available locally, for FedEx can get it to me from virtually anywhere overnight.

How seriously is this changing the dynamics of marketing? Very. would be but a minor player in the book business were it not for the fact that they have sites in 7 nations, and can ship to many others. Having access to a virtual inventory of millions of titles, along with all the other merchandise they sell, bests anything a local competitor could provide.

Except for good old-fashioned customer service.

And therein lies the rub. If local businesses are to prosper in the dotcom era, they will have to rethink their business model. The competitive threat is far greater than just another Wal-Mart opening nearby. And people need no longer feel obligated to buy locally just because it is the hometown darling. Just like Roasters brews a great cup of coffee, they can survive and thrive in a Starbucks marketspace. And the local bookseller, who suffers from a poverty of space and inventory, can still do things an invisible but powerful competitor could never begin to do.

Just don’t try to make me feel guilty for not automatically patronizing the local guy. Things are different now, and xenophobia just won’t cut it in the 21C.Dr “Shop Free Or Die” Gerlich


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