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Boston Small Business Owners Ask: How Do Consumers Spend Their Money?

Feb 10, 2020 8:50:00 AM / by Larry Julius

Boston area consumers are expected to spend $100.9 billion at retail this year, according to Nielsen. This means that every household, on average, will be dishing out over $51,000.

To capture a larger share of these dollars, New England small business owners need to know the answer to two questions.

The first question is, where is this enormous amount of cash being spent?  The list below details the answer.

  • Motor Vehicle & Parts Dealers: $19,301,263,000
  • Food & Beverage Stores: $15,288,297,000
  • Food Services & Drinking Establishments: $15,022,512,000
  • Grocery Stores: $12,481,618,000
  • Health & Personal Care: $6,552,853,000
  • General Merchandise: $6,401,151,000
  • Clothing & Accessories: $5,876,706,000
  • Building & Material Supply: $5.752,475,000
  • Department Stores: $2,808,731,000
  • Furniture & Household Appliance Stores: $1.455.674,000
  • Radio, TV & Other Electronics Stores: $1,495,180,000

The second question a Boston area retailer should ask themselves is, how can I compel consumers to spend more of these dollars at my business?

Retail spending in Boston and New EnglandSuppose a local clothing store could increase its share of the money consumers are spending in this category by just one-quarter of one percent. This would result in an additional $14.6 million in sales,

Similarly, imagine if a local chain of  convenience stores could successfully win back just one-tenth of one-percent of the money being spent at large supermarkets. The owner would probably need new cash registers to ring up the additional $14.4 million in revenue.

No matter what a small business sells, to increase its share of spending requires the use of advertising.

According to "Seven Steps For Success", an advertising guide for Boston small business owners, a key function of advertising is to build mental availability, which nudges a consumer toward the purchase of a product or service. It also serves to provide public notice that a product or service exists and is available for purchase.

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The US Small Business Administration recommends that every New England small business advertise consistently.  “Think you have a great product?” asks the SBA. “Unfortunately, no one’s going to know about it unless you advertise.”  The SBA goes on to say, “Advertising, if done correctly, can do wonders for your product sales, and you know what that means: more revenue and more success for your business”.

There are many advertising media options available to Boston small business owners. These include local newspapers, television, and social media. When a company needs to drive sales, however, research indicates local radio is the most potent way to be effective.

Radio derives its potency to deliver paying customers from its ability to reach the most possible people.

Nielsen did a study to determine how different elements of an advertising campaign directly affected sales increases. Reach had the most significant effect.  More so than branding, targeting, or recency.

Last week, for instance, more adult consumers tuned-in to a Boston radio station than used any other medium.

Advertising In Boston: Media ReachBoston radio reaches 90% of all consumers in each of the categories on the Nielsen retail spending chart. 

For example, Tampa radio reaches:

  • 92.1% of all consumers planning to buy a vehicle during the next 12 months
  • 90.6% of all consumers planning to buy furniture or mattresses over the month.
  • 89.7% of all consumers who use a local restaurant each month
  • 89.2% of all consumers who shopped in a local grocery store last week
  • 89.3% of all consumers who shopped in a local department store during the past three months
  • 90.6% of all consumers who shopped in a local clothing store during the past three months
  • 92.6% of all consumers who shopped in an automotive store
  • 89.4% of all consumers who shopped for building supplies, paint, or hardware during the past year
  • 89.7% of all consumers who shopped in a local electronics store

Radio's ubiquitous reach among consumers is the reason why Deloitte, the world's largest business consulting firm, recommends radio "should be a big part of the mix for those buying advertising."

"Radio’s weekly reach," according to Deloitte, "has been remarkably stable in the United States. Not only has reach hovered around 94 percent for the last few years, but that number is essentially unchanged from the 94.9 percent figure in spring 2001 (when Apple introduced the iPod)."

"Further, an August survey found that, of those who report listening to live radio, over 70 percent say they listen either every day or on most days. A majority of radio listeners are tuning in as part of their daily lives."

More Great Advice For Boston Small Business Owners

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Topics: store traffic, retail, best way to advertise, newspaper advertising, radio advertising, consumer spending, small business owner, online advertising, social media advertising, television advertising, small business, pandora, spotify, digital advertising

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