- Seventy-six percent of U.S. Amazon Prime members — and 77% of all consumers — are willing to go out of their way and pay more for a holiday purchase at an independent, small local business than buy from Amazon, according to a new survey from Funding Circle, a small business loans platform.
- Another 60% of surveyed consumers said they are willing to pay 10% or more because they like the idea of supporting a local business and its local jobs, and keeping the money within their communities.
- The impact on localities of this sentiment is strong, with 67 cents of every dollar spent on small businesses staying in the local community, according to the Small Business Economic Impact Study from American Express, also released this week.
In another sign that Amazon will probably not devour the entire retailing universe, the study from Funding Circle found a strong preference among Amazon's best customers — Prime members — for buying from small businesses in their community.
The survey reported that consumers would shop even more at small businesses if they offered more convenience, by 51%; better selection, by 38%; and a better shopping experience, by 31%. Last year, 74% of consumers reported doing at least part of their holiday shopping at small businesses, and most said they plan to spend the same amount this year. However, these shoppers are not beyond checking the price of items on Amazon while shopping at a small merchant, with 49% doing so in the past month.
But even when they found a better deal online, 45% of shoppers still made the purchase locally. Meanwhile, Amazon hosts nearly 20,000 small and medium-sized businesses on its platform and they account for half its retail sales.
The Amex study was timed to precede next week's Small Business Saturday (Nov. 24), which the company started in 2010. Amex defined small businesses as those companies employing less than 100. Last year, the number of consumers shopping on Small Business Saturday declined to 108 million from 112 million the year before. The study found that U.S. small businesses total $4.8 trillion in gross domestic product.
Confirming the Funding Circle study, the Amex survey reported that 91% of consumers believe it is more important than ever to support small merchants during this holiday season. Eighty-three percent expect to do some of their holiday shopping at an independently-owned retailer or restaurant, and 94% value the contributions of smaller companies to their communities. This will be true even when they shop online, with 65% saying they will probably look for independently-owned retailers to make their e-commerce holiday purchases from. This includes 59% who will shop on Small Business Saturday, and 40% of consumers reported they will purchase from a small retailer online on Cyber Monday.
"Shopping small has a significant and positive effect on local communities, and we hope Small Business Saturday will help to amplify that effect during the crucial holiday shopping season," Elizabeth Rutledge, Amex Chief Marketing Officer, said in a press release. "When we spend local, small businesses thrive. And when small businesses thrive, we all thrive."