42% of Americans are willing to pay more to support small businesses
(BPT) - Americans are evenly split on their shopping habits, shopping both big and small - 29% favor local or small businesses, while 29% prefer national retailers. Though price remains top-of-mind for many shoppers (62%), speed is a major factor, too: 53% say they want to get an item as fast as possible, no matter where it comes from, according to a new study by Empower, a financial services company.
Shoppers appreciate the personalized customer service (36%), high-quality and craftsmanship (34%) and locally made products (56%) found at the stores in their neighborhood. Lower prices (85%), greater product variety (71%) and more flexible return policies/warranties (64%) motivate consumers to pick big-box retailers.
Key takeaways
- Best of both: 29% of Americans prefer big chains, 29% favor local small businesses; 82% of Americans say they shop at both big chains and small businesses for different items.
- 53% want to get items as fast as possible, no matter where they come from.
- Half of Americans say bigger chain stores offer convenience (56%) and more loyalty programs or rewards (51%).
- 3 in 5 (61%) prefer to buy gifts from small businesses because they can find more unique and personal options.
- Eating at local restaurants (75%) and shopping for produce at local farmers' markets (51%) are ways consumers support their local economies.
- Monthly spending at local small businesses averages $106, with Gen X ($113) and Millennials ($110) splurging more.
Purchasing preferences
Economic pressures can play a role in where Americans are shopping around: 44% report purchasing items less at small businesses due to inflation. Three-quarters of spenders say they buy online from big box stores to get better deals.
Beyond price, 6 in 10 Americans prefer to purchase gifts for others at local shops because they can find more personal and unique options. Three-quarters support small businesses in their town by eating at local restaurants (non-chains) and shopping for produce at farmers' markets (51%). Other local finds consumers are on the hunt for include books and media (51%) and home goods or decor (44%).
The return or warranty policies at big chains offer financial peace of mind for many (49%), while shoppers are looking for electronics and appliances (92%) and sporting goods (81%) at national retailers.
Baby Boomers (41%) and Gen X (31%) are more likely to prefer shopping locally, while Millennials and Gen Z are more flexible - 42% and 46%, respectively, say they have no preference. Gen Xers spend the most per monthly average across both local and big chain stores, followed by Millennials, while Gen Z and Baby Boomers report lower spending overall.
Average monthly spending at local small businesses, by generation:
- Gen X: $113
- Millennials: $110
- Gen Z: $96
- Baby Boomers: $88
Average monthly spending at big chain stores, by generation:
- Gen X: $379
- Millennials: $338
- Gen Z: $298
- Baby Boomers: $259
The appeal of small businesses
More than a third (35%) are willing to pay extra at a local store for a product they could also buy at a big chain. On average, consumers are comfortable paying up to $14 more, with 10% ready to spend over $30.
Convenience is another important factor, especially for younger generations. Over half of Gen Zers (56%) would shop "small" more often if faster shipping options were available.
Online platforms like Etsy have also gained traction. About half of Americans (51%), including 54% of both Gen Z and Millennials, use these channels to support small businesses.
Additional reasons shoppers value small businesses include locally handcrafted products (56%), building relationships with owners (39%), and personalized service (36%).
The allure of big chains
Big chains attract shoppers with competitive prices, convenience, and loyalty rewards. Gen Zers are the most likely to seek rewards and discounts - 61% prefer shopping at national retailers to take advantage of these perks. When shopping online specifically, Gen Xers (79%) are more likely to buy from chain stores because of deals offered.
Methodology
Empower commissioned an online survey of 1,009 Americans in October 2024.
RO4003692-1124
Source: BrandPoint
