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Closing knowledge gap key to driving local sales

Business

As South Australia’s confidence builds exiting the emotional strain of COVID-19, the conversation around the importance of supporting local businesses hangs in the balance.

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According to the Square Holes monthly mind and mood survey the vast majority of South Australians have supported local businesses over the past few months. But parochialism alone will not guarantee sales – price and a lack of knowledge about a product’s origin are also influencing buying decisions.

“More than eight in ten South Australians visited local independently owned shops,” Square Holes founder and managing director Jason Dunstone said.

“This level was consistent across age groups, across gender and across regional and metropolitan areas.”

The representative survey of 400 South Australians aged 18 plus found notable differences emerging for online shopping at local independents, going to cafes, restaurants and ordering take-away.

More than three-quarters of 18 to 34 year olds support local businesses but this level of support declined in older age groups. South Australians aged 65 or more indicated lower levels of support for local businesses.

Dunstone said the vast majority supported local products and businesses over the past few months, with 37 per cent claiming to buy local products at least weekly and a similar proportion shopping face-to-face at local stores.

“A larger proportion of younger South Australians, aged 18 to 34, supported local independently owned shops online at least weekly,” Dunstone said.

“They displayed similarly strong support for local cafes and restaurants in the especially challenging months.”

Survey respondents also had a general understanding and regard for the products and services produced in South Australia.

“As an example, when asked which regions best match different food and beverage products, Adelaide Hills emerged as our gourmet leader, followed by Adelaide and the Barossa,” Dunstone said.

Food and beverage strongest product associations with regions (in rank order)

Dunstone said there is still a knowledge gap, with on average one fifth of South Australians unable to match a region with the 15 food and beverage categories.

Bigger gaps in understanding were found for gin and other spirits (33 per cent did not know), organic farming (34 per cent did not know) and red meat (33 per cent did not know).

“The inability to find suitable local products and services was noted as a prominent reason for not buying local, second only to price,” Dunstone said.

Price was noted as the main reason for not supporting local, with this consistent across age groups, gender and regional and metropolitan areas of South Australia.

“While there was a small willingness to pay more for local products, Square Holes’ research illustrates a relatively tight willingness to pay more,” Dunstone said.

“Local brands are expected to be price competitive, as households are finding times financially hard and need to save money.”

Square Holes is currently finalising research in relation to which brands people love, like a lot, or are passionate about. The research, first explored in 2010, will be the basis of future Square Holes InDaily Mind and Mood updates, but one finding on buying local stood out.

The top five brands named spontaneously in SA were all large market dominant brands:

  1. Apple
  2. Cadbury
  3. Adidas
  4. Nike
  5. Samsung

The only local brand in the top 10 was Coopers, a South Australian icon with a long-established strategic priority of brand building locally and beyond.

“While Square Holes research over recent months indicates South Australians are proud and passionate about many of our local brands, there is a sense that our local brands are often more niche, rather than having broad market appeal,” Dunstone said.

“The research participants noted that even with the best intentions to support local, the brands they actually support tend to be large global marketing behemoths who have made it easy to buy a trusted quality product or service.”

There is also a desire for our local brands to go global, and many of South Australia’s iconic brands were noted as having success interstate and overseas.

South Australia’s place in the global economy will be expanded on in next week’s mind and mood insights and more on the views surrounding local brands can be found on the Square Holes website.

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