Factors Contributing to Inshopping Behavior in Rural Trade Areas: Implications for Local Retailers

Abstract

Competing with giant discount and chain stores represents a key challenge facing independent retailers anywhere. In smaller communities, the competitive nature of the rural market has dramatically altered in recent years. Better traveling conditions along with attractive regional shopping centers entice consumers to travel beyond their local market and spend their dollars outside their community. This phenomenon, called outshopping, results in lost sales for the local small-sized retailer and lost sales tax dollars for the community (LaForge, Reese, and Stanton 1984; Papadopoulos 1980). Previous studies suggest that outshopping is a common activity in rural communities, with numerous ramifications for the local market system. In the small or rural community, the extent to which consumers shop outside their own local market has been shown to influence significantly the stability of the local trade area, which is largely made up of small independent businesses (Awes, Leistritz, and Stone 1992; Johnson and Gengenbach 1994; Stone 1995). In evaluating retailing patterns across the United States, Johanson and Fuguitt (1984) found that smaller communities suffered more severe loss of retail sales volume than medium- to large-sized communities. Johnson and Gengenbach (1994) found that within a single Midwestern state, 52 rural counties experienced a 50 percent trade leakage from outshopping during 1992. The trend of trade migration to larger population centers continues to reduce the survival rate of small independent retailers in rural areas. Hoy and Vaught (1980) found that lost sales dollars have a more profound impact on small independent businesses and that the rural entrepreneur encountered greater difficulties than all other types of small businesses. In the Midwest section of the U.S., where retailing is especially dependent on the spending power of the farm family, the local small town business base has shrunk so greatly that independent small retail enterprises are down from approximately three-fifths of all business establishments to only one-third (Strange 1996). To date, we know more about why consumers spend their money outside the community limits than we do about their reasons for choosing to shop with local retailers (Anderson and Kaminsky 1985; LaForge, Reese, and Stanton 1984; Samli and Uhr, 1974). Shopping behavior occurring within the consumers' trade area is defined as inshopping (Samli, Riecken, and Yavas 1983). Little emphasis has been placed on identifying characteristics or motivations of consumers who choose to inshop. In the micro sense there is considerable value in identifying inshopping dimensions for small rural retailers struggling to survive in the local trade area (Carusone and Moscove 1985; Ozment and Martin 1990). On a macro level, small retail businesses are a significant force in the American economy. Recent figures show that small-sized retailers (those with less than twenty employees) make up 15 percent of the nation's retailers and provide 16 percent of the nation's retail positions (U.S. Department of Commerce 1991). In addition, 17 percent of the nations' strongest small businesses are retailers (U.S. Small Business Administration 1993). The intent of this study wits to examine rural consumer inshopping behavior in relation to factors explored in previous studies as explaining consumer outshopping. Additionally, consumers' perceptions of community reciprocity were explored to determine whether there was a link with inshopping behavior. Purpose The purpose of this study was to determine: (1) whether consumer demographic, lifestyle, and socioeconomic variables contributed to an understanding of why consumers inshop; (2) whether rural consumers' shopping behavior could be explained by levels of satisfaction or discontent with local retail facilities as identified by Samli, Riecken, and Yavas (1983); and (3) whether consumers' perceived level of reciprocity in the community was a relevant factor in the small community social and marketplace exchange environment. …

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