A recent study of 1,004 US adults, conducted by Big Village Insights using its CARAVAN Omnibus service, has shown that American consumers are greatly concerned about the impact on small businesses from the recent COVID-19 epidemic and resulting quarantines. In our survey, three-quarters (75%) of consumers interviewed indicate that they are worried (4 or 5 on a 5-point scale) about the survival of small businesses following this crisis, with Gen X (ages 40-55) and Baby Boomer (ages 56-74) segments both being higher at 79%.
Among those concerned, the most common reasons cited were the negative economic impact on local communities of small business failures (70%), followed by concerns about a lack of competition in the economy if small business failures were widespread (52%), concern that fewer small business will lead to local communities being less vibrant (52%), and the fact that small businesses are a key source of jobs (47%).
In addition, nearly two-thirds (64%) of consumers surveyed said they have made an extra effort to purchase from small businesses in their local community during the COVID-19 epidemic, with those reporting household incomes over $100,000 annually being even more likely to say this (74%).
This research shows that a significant proportion of consumers are making intentional changes to their spending habits to do what they can to ensure that small businesses survive. As with many trends we are seeing during this crisis, such as working from home, video conference calls, and contactless payment technologies, this behavior isn’t necessarily new (the term “shop local” has been around for years) but it does appear to be accelerating due to recent events.
Behavior such as this and the thinking that drives it, combined with the tenuousness of global supply chains, may herald the coming of a new era of localism. In the end, this might be one of the lasting effects on consumer behavior that comes from the current crisis. Only time will tell.
Written by Seth Hardy, SVP at Big Village Insights.