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From the perspective of consumer convenience and value, there’s no doubt that big box stores, online shopping, and food delivery services are a huge advance. And yet, just about every city and town has an active shop-local movement. What is it that we like so much about patronizing local businesses?

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Three marketing and business scholars, Alain Debenedetti, Harmen Oppewal, and Zeynep Arsel, suggest that the answer lies is looking outside typical economic analysis and considering the gift economy. Typically, when scholars talk about gift economies, they contrast them with cash exchanges. Instead of direct trades, gift economies involve achieving status and creating mutual obligations through gift-giving relationships. Debenedetti, Oppewal, and Arsel suggest that many local businesses operate through a mixture of cash and gift economies.

The authors spoke with French customers who expressed strong attachment to particular local businesses. They found that these connections emerged when people felt that the business was something outside the commercial world. This meant feeling a sense of trust, being sincerely and personally welcomed, and having access to the business’s “back-stage areas, activities, and stories.”

Customers learned about restaurant owners’ personal histories, shared their own stories, discussed authors, and got personalized recommendations from bookstore workers. They enjoyed the authenticity reflected in non-corporate spaces. As one women described her local coffee shop: “The place is so tacky that you feel like being in this woman’s home. You know, it is decorated with awful paintings, but I like it.”

Debenedetti, Oppewal, and Arsel write that customers perceived the businesses as providing something beyond a product or service. They quote a man who frequents a small restaurant and grocery store in his village, recalling that his family marked important moments there, including the first Christmas after his father’s death. “This place is a kind of extension of our house, with the benefits of a restaurant,” he said. “In a sense, the owner takes care of us.”

In turn, customers not only supported the businesses by spending money, but also through the gift economy. They tipped generously and offered practical and emotional support to the proprietors. One man described how, at a wine bar that felt like a friend’s home, he stayed late one night drinking wine and helping the manager to wash the dishes.

Loyal customers also acted as “ambassadors,” recruiting their friends and family to patronize the place. A DJ explained that he only invited fellow DJs to shop with him at his favorite music store, with the expectation that they would share his passion for it. “Participants are proud when they bring someone who fits with the place,” the authors write. “Thus, ambassadorship helps to sustain and reinforce the relationship between the place and the attached customer, as well as the bonds between the focal customer and her or his close associates.”

This process, building complex interpersonal relationships within a commercial context, might help explain why so many of us still want to patronize local businesses.

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Journal of Consumer Research, Vol. 40, No. 5 (February 2014), pp. 904-923
Oxford University Press