Only a fool would deny that the economy, both locally and nationally, is in the tank. By every measure the future looks mighty bleak, with or without a stimulus. Rising unemployment, sagging industrial production, ever-tightening credit and the collapse of the housing market all add up to a very grim picture, particularly if you are a retail merchant located in Ocean Beach, San Diego, California.
Although, according to the Ocean Beach Mainstreet Association, the community made it through 2008 with small net gain in new businesses, this year looks to be a rough one for many of our local stores. Two well known storefronts on Newport Avenue have succumbed due to economic pressures since the start of the year, and an increasing number of local retailers (who obviously are not anxious to publicize their precarious situation) have turned to OBMA looking for any help they can get in weathering the economic firestorm. It’s probable that the number of vacancies along our commercial districts is likely to increase in the near future.
Some local retailers have responded by offering deep discounts, bundling products to increase perceived value and generally tightening their inventories and/or payrolls. All these things are good steps towards retaining a customer base. None of them address the seemingly impossible-and always difficult– task of adding new business. It’s a generally accepted truism that 90% of all sales come from within a retailers’ existing customer base. Another way to look at this situation is that the cost of recruiting a new customer is ten times the cost of retaining an existing one.
Yet the reality is that many customers that live or shop in our community simply have fewer dollars than they had a year ago. And, for many local businesses, these fewer dollars are simply not enough to keep their doors open. The survival of small business in our community depends on its ability to compete successfully with other shopping choices to keep dollars in the community and draw customers in from other parts of the region. On the surface, this looks to be an impossible strategy. How can OB merchants compete with the marketing power of the mega-malls and national retail chains? It’s likely that Macy’s spends more on advertising in a week in the Union-Trib than local merchants collectively spend in a year on all media.
It’s easy to look at the current situation and get very negative very quickly. One local business (sorry, you’ll get no more free publicity here) has taken the “everyman/woman for himself” approach and is (alas, still) waging an email and letter writing campaign seeking to get governmental intervention to shut down or curtail activities that it deems as a threat or competition.
The answer to all these challenges lies under our feet and all around us. We just don’t see it as a solution. Yet.
Growing fuel prices (yes, they’re headed back up) the specter of climate change, a growing social movement to protect the character of our communities, along with big box bankruptcies, baby boomers seeking non-franchise purchasing experiences, and community consensus that our unique character is valuable all offer up clues towards a solution to this predicament.
The personal economic affects of globalization and the resulting loss of jobs have led to a rising understanding of the advantage that demanding “local” provides, to our area economies, our own families, our neighbors and friends. Supporting “local” gives people the good feeling of “making a difference” and playing a responsible role in the sustainability of our communities, while also stimulating that sense of pride and authenticity. It says we have a choice in the matter, and that choice matters. “Localism” is not only good for our economy; it represents a sense of social responsibility. And, as perverse as it may seem, “localism” is a trend that has arisen due to the cultural and social alienation that results from the globalization of the economy. Put simply, people have a fundamental desire to experience a personal connection that’s missing from their lives.
Translating this sentiment into an economic strategy is bigger than simply creating an ad campaign that says “buy local”. Think about it. Buy local what? Most of what’s sold in local stores gets there thanks to the economies of scale that globalization offers. And local retailers simply lack the purchasing power to compete on price with big box retailers. As much as it is a mantra for some small business advocates that killer customer service can level the playing field when it comes to competition, in real life the only advantage that businesses like those that populate the commercial districts of OB lies in the personal connections between the owners/managers and their customers.
Tapping this “local” sentiment is about creating a mood, an attitude and connecting with people’s larger (ethical/moral) concerns. It’s about taking all the “parts” and creating something bigger than their “sum”.
What needs to happen is for the local business community to take advantage of the “brand” awareness that is all around them. The term “OB” implies something that, with a gentle corralling, can be used to drive local economic growth. The “Gaslamp District”, “Little Italy” and “Hillcrest” all have connotations that have been successfully been used to market their business districts. (And, yes, I know that the term “OB” has also been used to designate and market the local business districts.)
The key is to make the term “OB” designate something more than a geographic location. It needs to be (and imply) a state of mind. And to do that a story needs to be told: a story about an independent, artsy-craftsy spirited community that’s proud to be different. (The specifics on this script are the kind of thing that OBMA could do.) Every merchant that has any advertising or any kind of public communication (website, business card, etc.) needs to incorporate this story into their message. At its simplest we’re talking about a “tag line” and the NAME of the community (Ocean Beach or OB). ( Shame on you Winston’s for running that nice full page ad in the City Beat that says you’re located in “San Diego”.)
This (call it neighborhood pride) is also something that needs to be included into the daily life of the community so that becomes part of the fabric of peoples lives. The folks at OBMA told me that one of their most popular functions is the publishing of a business directory. Let’s take that further by creating OB Facebook, OB MySpace and OB Twitter. And integrate all the fantastic things that do happen in this community into those vehicles, along with the mediums for communication that already exist. Finally, the wall of separation with regard to issues that affect the community between different organizations must come down. It’s unreasonable to expect that people will agree on every issue, but on those issues where concurrence does occur, people and organizations need to make that extra step and support each other. (Yes, OBMA–for example–, you were missed at the City Council budget hearings about the future of our library. And standing up for community institutions IS part of marketing the dream.)
This isn’t any miracle cure. There aren’t any miracle cures. The failures of the recent ponzi schemers that have contributed to our national economic woes should be sufficient warning to us all as far peddlers of “miracle cures” go. But a little neighborhood pride could be just the ticket for long term success.