 "Photo: Paige Nelson / Staff Photographer")
After being hurt by the unstoppable juggernaut of globalization, many small businesses may have found a solution to their woes: Hyper-localism.
The most unlikely businesses are prevailing and adapting in an increasingly connected world. After all, international companies seemingly have the upper hand with superior technology, knowledgeable personnel and established distribution networks. However, by appealing to broad geographical areas, these companies left a large stone unturned.
Rather than try to compete directly with global brands that offer standardized products, smaller companies are carving niches by specifically focusing on their own neighborhoods.
Look no further than the news industry for examples of hyper-localism at work. According to Scott Lewis, the chief executive officer of www.voiceofsandiego.org, Web sites dedicated solely to local coverage have stepped in to fill the void left by larger news services.
“We’re looking at the unbundling of content where people get news from different places,” Lewis said. “In the past people turned to their local paper for everything, but now everyone gets the crossword from here and the sports section from there.”
As a result of fickle consumers scouring the Internet for a variety of news sources, many traditional newspapers have suffered staggering losses. However, consumers are more inclined to follow locally generated content because the news is perceived to be relevant and “close to home.” This phenomenon can be seen with voiceofsandiego.org , which holds a magnifying glass over the community.
“We’re ferociously local,” Lewis said. “I think we’re successful because the national media is robust, but San Diego is lacking in local coverage.”
Although the site is nonprofit, according to www.fastcompany.com, many companies are eager to advertise in hyper-local publications. Despite the downturn in Internet marketing, the demand for local online advertising is expected to increase 5.4 percent and reach nearly $13.3 billion by next year.
Not only is the current niche landscape profitable, but the local news market may also be immune from being poached by media chains. Although technology has made reaching across the globe easier, newspaper chains are at a disadvantage when attempting to accurately capture the diversity of places such as San Diego. For example, the idiosyncrasies among different areas in San Diego such as North Park, Poway and Pacific Beach, to name a few, might be lost to an outsider.
Local companies in other industries are also adopting a laser-tight focus when it comes to business. For Craig Barrett, owner of Barrett Engineered Pumps, a company that distributes pumps for industrial, commercial and municipal applications, hyper-localism is the best way to create long-term relationships with customers.
“I know of 100 companies like us and we have the smallest territory, but I don’t think you can get too far because repeat customers are 85 percent of business,” Barrett said. “For my business it’s about finding a core with tremendous potential.”
Pinpointing that core might be no more than a click away. Small businesses have traditionally differentiated themselves with local know-how, but until recently they faced advertising difficulties associated with companies operating on a shoestring budget.
However, sites such as www.hellosandiego.com and www.wikicity.com have given small businesses inexpensive options to reach the community they’re targeting.
“Newspapers typically spend 60 to 70 percent of their budget on distribution, but online can do it for 10 percent,” Lewis said.
The world is growing flatter as people and businesses are increasingly connected by technology. However, for many small businesses, hyper-localism represents a recession-proof strategy. Look for the trend to continue well into the future.
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