Business ideas for 2021: Localisation

There have been few good things to say about 2020, but try this on for size: more and more British people have discovered the ease of shopping locally and supporting their communities, and – so reports suggest – they’re planning on continuing to do so.

Yes, whether by force or by choice, many of us have exchanged urban centres, crowded supermarkets, and faceless online marketplaces for the small, familiar independents on our doorsteps, and discovered they can provide (nearly) everything we need.

This isn’t a David vs Goliath/zero-sum game situation – there’s room for all manner of retailers on the high street and online. But if, as we predict, this shift in consumer behaviour endures, 2021 will be a great year to take advantage of booming local economies.

And that’s great news for startups and small businesses, which is what we’re all about.

Want to read about more top business ideas? Check out the full list of the best business ideas for 2021. 

Why is localisation a good business idea?

There’s no doubt that workers stuck at home had a big part to play in increasing local spend. More than half of the UK’s workforce worked from home during the pandemic, and an astonishing 91% would like to continue to do so, according to data from Ezenki PR and OnePoll.

But does that mean they’ll carry on shopping locally? Apparently so: 40% of respondents to a survey from American Express said the amount they spend at local businesses had gone up since March 2020, and 78% of those same people intend to increase their local spend in 2021. Additionally, so far, town centres have recovered a much higher proportion of their pre-COVID footfall than city centres.

Indeed, the American Express sponsored Small Business Saturday campaign, which encourages people to shop at local independents, recorded a record high of £1.1bn spent on the day of this year’s event – the first time it’s ever gone above the billion pound mark.

Likewise, a survey from gift wholesaler Sass & Belle found that 97% of shoppers are making an extra effort to buy presents from small and independent businesses this year.

There’s even a name for this change in our shopping habits: The Polo Mint Economy, so called because of the hollowing out of central shopping locations as consumers drift towards the outer regions.

So, how can the aspiring entrepreneurs of 2021 capitalise on localisation?

Localisation: Business opportunities

Do we really need to say it? Start a small business!

There’s never been a better time to start a small, independent shop in your local area. A butcher? A bakery? A candlestick makery?

And it’s not just where we shop that has changed. As we’ve all had a lot more time to reflect on what we’re buying and where we’re buying it from, the gradual shift towards more ethical and environmental shopping practices that was already occurring has seen a significant acceleration during the pandemic.

There’s a growing preference for the kind of authentic, artisanal, high-quality products and experiences that small shops excel in. According to Sass & Belle, 65% of shoppers are making a conscious effort to buy eco-friendly gifts this Christmas, and 27% are aiming to buy cruelty-free presents.

Help other people shop local

It’s also great to see startups that are helping people to find and support local businesses.

The Neighborly app is a local social network that helps people connect with each other and support their local communities, and functions as a marketplace for any local traders to sell their goods and services. Users are encouraged to leave feedback and reviews to help foster a sense of trust and community.

There are also sector-specific apps like Bookshop, which launched earlier this year to help independent bookshops compete against the likes of Amazon by both directing people to their nearest bookshop, and evenly distributing its revenue among the independents on its platform.

It should be noted that, while Bookshop was hailed when it arrived in the UK in November, not all independents think it’s all it’s cracked up to be. Nevertheless, that leaves plenty of room for new startups to enter the market with better alternatives.

Localisation: Insider opinion

Patrick Clover, CEO and founder of hospitality marketing tech business Stampede, says: “Good localisation means engaging with a community on their terms. It is the opposite of globalised businesses that say and sell the same things to anyone and everyone.

“I think many consumers are seeing the limits of hyper-globalisation. They want more authenticity from their chosen brands. My wants and needs as an Edinburgh local are not the same as a Texan, so why would I want the same products, services and communications as someone living in the US?

“When a brand speaks to their customers in the wrong language or wrong tone of voice, it feels insincere and can be quite repellent. More brands are understanding the benefits of really understanding their local community, and communicating to their customers almost as peers.

“I think the biggest difference today versus ten years ago is that localised businesses can compete with globalised businesses on a more level playing field – maybe not on cost, but outdoing them on service quality.

“As all industries have digitised, even local, physical businesses can use data to better understand their customers. They can use this data to create promotions, events and communications that are tailored to their community.

“We work with five-star hotels and local neighbourhood boozers, yet both succeed or fail based on how they communicate with customers. They say different things in a different tone of voice, but both have to be authentic and personalised.”