Investing in Local: Small Purchases, Big Impact

When you buy a birthday gift for a friend, a bar of soap or a new pair of jeans at a local business, it might not seem like you’re making a big impact. However, taking the time to be intentional about supporting local retailers – even with small purchases – can pay large dividends for the community in the long run.

Many Chamber retailers saw a boost in sales during the pandemic, but that momentum has largely run its course. That, paired with the ease of online shopping and workforce shortages, makes it a uniquely challenging time to be a local retailer. Now more than ever, it’s important to think about where you’re spending money and make a conscious effort to support local retailers. 

“It’s a common mantra to, ‘shop local.’ Everybody talks about that,” said Nathan Sanderson, executive director of the South Dakota Retailers Association. “That’s a great sort of narrative, but that narrative only has an impact if we actually do it.” 

What does it mean to shop locally? 

There’s no hard-and-fast definition of what it means to shop locally, but a good rule of thumb is to look at whether the money you spend at a business is extracted from the community or reinvested in the community. 

Local businesses are the ones reinvesting in the community. That can look like the classic image of a mom-and-pop shop, but it can also look like a local owner of a national franchise or a corporation with strong local ties. 

Sanderson shared that statewide, the South Dakota Retailers Association has about 4,000 members, and about 1,000 of those are in the Sioux Falls area. 

One example of a local business the average person might not think of as “local” is Hy-Vee, Inc., an Iowa-based, employee-owned regional grocery store chain with six locations in Sioux Falls. The company is committed to carrying local products, and in their Sioux Falls stores you’ll find fresh local produce, salsa and other regional brands and products.

In addition, because of Hy-Vee’s ownership structure, profits are funneled back into the company’s employees – 3,400 of which are in Sioux Falls. 

“The money you spend at Hy-Vee in South Dakota – it stays in South Dakota,” Regional Vice President Jan Nichols said. “The more money our employees have, the more money they have to spend into the (local) economy.”

Nichols also noted that, since 2005, Hy-Vee has given back more than $3 million to local charities through the company’s Operation Helpful Smiles program. 

Many local businesses are reinvesting in the community in a similar way. You only need to look at who’s sponsoring local events, nonprofits, sports teams and charities to identify the companies that are actively engaged with local efforts as well as their customer base.

The more money our employees have, the more money they have to spend into the (local) economy.

– Jan Nichols, Regional Vice President, Hy-Vee, Inc.

“The individuals who are supporting those activities are your Main Street, local South Dakota businesses, whether that’s your grocery store, pharmacy, hardware store, shoe store, whatever,” Sanderson said. “And they can only support those activities to the extent that we support them.” 

Additionally, supporting local businesses also plays a role in supporting other community resources through the sales tax they generate. 

“To the extent that you want to have a nice swimming pool in your community, well maintained parks, local law enforcement, it behooves us all to think about how those entities are funded and support those local businesses,” Sanderson said. “Because that, of course, supports the local communities in which we live.”

Changing habits are worth the extra work

It’s important to recognize that supporting local retailers, franchisees and even Sioux Falls locations of chain stores can make a difference in the local economy, explained Jeff Griffin, President and CEO of the Greater Sioux Falls Chamber of Commerce.

“Remember that supporting local business is more than just a transaction – it’s an investment in the future of our community. When you shop locally, you’re helping to create jobs, strengthen our economy and maintain the unique character that makes Sioux Falls special,” said Griffin. “Shopping local has a ripple effect, both financially and in the spirit of community.”

Thinking twice before clicking on social media ads or “add to cart” on a global retail site may require a major shift in behavior for many of us. When it comes to convenience, however, the ease and efficiency of shopping can often be matched at the local level. Many local retailers have an online shopping option, which lets you shop from the comfort of your own home, compare your options and, often, you can then go pick up a purchase in-store the same day that you find it without waiting for it to ship from elsewhere. 

That said, local retailers work particularly hard at creating a positive shopping experience that makes taking the time to come into their shops worth the effort. You’re more likely to come across high quality, hand-selected items.

Alix Johnson, gallery director at Rehfelds Modern Fine Art & Framing, described the work that goes into finding unique items to sell, curating displays and providing excellent customer service. When people visit a local retailer, they’re really seeing a strong sense of the business owner’s aesthetic, too. 

She points out that purchasing locally not only results in financial support. “You’re also saying, ‘Hey, I think you’re neat. I like your style,’” Johnson said. “That is uplifting in a really unique way.” 

Local retailers also help shape the identity of the community, adding character and attracting both residents and visitors. And even in a competitive market, businesses can find ways to work together and support each other.

Johnson gave an example of talking with a customer and realizing their needs might be better met by another local retailer. By cultivating strong relationships with other business owners, she’s able to refer that person to another shop – a move that not only builds trust with the customer but strengthens the overall retail community.

For the consumer, there’s also a more personal shopping experience involved with shopping locally–an experience that is nearly impossible to find online. 

Chris Borchardt is co-owner of Crossroads Book & Music, Inc., a Christian book and gift store that’s been a family-owned Sioux Falls business for about 60 years. He’s seeing increased competition from online sites that sell discount books, but he also knows the extra effort to come in-person often pays off. 

“You get better customer service,” he said. “You get to talk to a human. You get to see and feel what you’re buying, and you may see something you didn’t even think about as a possibility.” 

Those businesses that pay special attention to what their customers want and need are particularly helpful, both in the quality and selection they offer as well as the expertise they are able to share with consumers.

Where do we go from here? 

With the holiday season approaching, supporting local retailers is as important now as it ever has been, Sanderson said. The last few months of the year can make or break a retail business, he added, and it’s important to support businesses now so they can ride out slower times and make it through to next year. 

It’s also important to keep the momentum going and support local businesses year-round. From groceries to gifts, the need for goods and services doesn’t end when the holidays are over. That feel-good feeling you get from doing your holiday shopping in Sioux Falls stores can carry on into the rest of the year.

“By continuing to support our local businesses throughout the year, we help ensure their long-term success and keep our community vibrant and thriving,” Griffin said. “Every purchase, big or small, contributes to the strength and future of Sioux Falls.” 

When you shop locally, you’re helping to create jobs, strengthen our economy and maintain the unique character that makes Sioux Falls special.

– Jeff Griffin, President & CEO, Greater Sioux Falls Chamber of Commerce

Consumers can continue to strengthen their own influence and encourage others to shop locally, too. Making recommendations on social media, spreading word-of-mouth about a hidden retail gem or gifting local gift cards to friends and family can make a large impact.

“Encouraging others to shop local is one of the most powerful ways we can support our community,” said Griffin. “When we share the value of local businesses with people we know, we help create a culture of support that keeps our economy strong and our city vibrant. It’s a simple step that makes a lasting impact.”