New Study Shows One Way that Locals Crush Amazon

Amazon isn’t known for losing, but there’s at least one way that local brick-and-mortar businesses undeniably outperform the online mega-retailer. Just two weeks after Amazon’s quarterly earnings report showed huge growth, a new study by Civic Economics reveals what those earnings mean for communities and local economies across the country – and they don’t mean much. The 2018 Home Sweet Home: Locals vs. Amazon study reports that local hardware and home improvement retailers recirculate 676 percent more of their revenue in the local economy than Amazon.

For the study, Civic Economics compared three retail segments: independent retailers; national chain retailers, such as Lowe’s and Home Depot; and Amazon, as an indicator of online retailers. Specifically, the study measures how independent hardware and home improvement stores stack up against their larger competitors when it comes to recirculating money to local communities through labor, procurement, profits and charitable giving.

On average, local retailers recirculate more than 30 percent of their revenues locally, while chains and online retailers recirculate just 13.2 percent and 3.9 percent, respectively. In other words, the study’s main findings reveal:

• Local retailers reinvest 130 percent more of their revenues than chain retailers and 676 percent more of their revenues than Amazon.
• If Amazon were to capture even 10 percent more of the home improvement market from local retailers, local communities would see a loss of $9.3 billion in local economic activity.

The 2018 Home Sweet Home: Locals vs. Amazon study represents the latest in a series of similarly revealing reports. In 2015, Independent We Stand teamed up with Civic Economics and the North American Retail Hardware Association to publish the first Home Sweet Home study, which revealed that DIY and home improvement projects go further for the local economy when consumers shop at locally owned hardware and home improvement stores. In 2017, the Home Sweet Home: Pros’ Edition study echoed those findings with respect to professional construction projects.

This year’s Home Sweet Home: Locals vs. Amazon study, also supported by the Paint & Decorating Retailers Association, was the first project in the Home Sweet Home series to consider online retailers and, namely, Amazon. A staggering 90 percent of small business owners say that Amazon has a negative impact on their business, according to the Institute for Local Self-Reliance. The Home Sweet Home: Locals vs. Amazon study shows that when these small businesses struggle, their local economies struggle just the same.

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Source: independent.org