How Does Online Shopping Affect the Local Economy?

The modern age brought along many new things, some good and some bad ones, but they definitely affected our lives invertible. Not only that, but our lifestyle has also changed, we live faster than ever before, and because of it need something that will make our life easier and save us some of our valuable time. One of such things is online shopping, and it is getting more and more popular. 

We need to start by saying that, although it is not good for small businesses, online shopping is not all bad. However, just because it is easier and less time consuming to buy something online, it doesn’t mean that it is necessarily better. 

Because of online shopping, small businesses are having a hard time competing with them, so they are slowly starting to lose their customers, and eventually closing, which is very bad for the local economy.

Negative sides of online shopping 

First negative thing that needs to be stated when we talk about online shopping is a decrease in brand loyalty. Before online shopping was available, people would go to the local store to buy certain products from specific brands, because it was something they could rely on. However, when online shopping became more popular, people started comparing different prices of brands and products, before buying something, usually online, instead of going to the store. 

Second, and even more important, is that online purchases can take away taxes from the local economy. This is because not every online trader charges the appropriate, or sometimes any kind of local tax, or other taxes for an item their buyers purchase from their online stores. Hence, as a result, residents of a state may not pay sales taxes for their online purchases that they normally would have paid if they had made the same purchase in a store. This may be convenient for the customers, but it definitely affects the local economy in a negative way.

Moreover, online shopping impacts retail corporations. This goes way beyond just liking or following a company on some apps like Facebook or Instagram. When a brand posts an interesting post which promotes their mission and worth statements, it helps to form a deeper connection with their consumers. This strongly affects small and local stores as many of them don’t have accounts on social media and promote themselves through billboards and posters. As most people these days spend a lot of time online, online commercials have a stronger impact on them, and they notice them more easily. 

However, online shopping is not all that bad. While online purchases can take away from the local economy, they can also contribute to it in a certain way, and this can happen if local businesses enter the online marketplace. With this in mind, try to look if your local store has an online store the next time you wish to purchase something online. Then, instead of buying an item from let’s say Amazon, eBay, or some other popular online store, purchase a wanted item from your local store – this way you will help the local economy, and support small businesses. 

(1) “How Online Shopping Continues to Impact Retail Companies” Bluefoot [Online] Available at: https://www.bluefoot.com.br/how-online-shopping-continues-to-impact-retail-companies/ [Accessed on: 17 Sep 2020]