Study: 92% of Consumers* Travel 15 Minutes or Less to Make Purchases
August 22, 2017 | Contributed by: Greg Sterling
“Roughly 80% of U.S. disposable income is spent within 10 to 20 miles of home.” It’s a stat that has been casually thrown around for years. At one point in 2012 I tried track to trace it back to the source but was unsuccessful. It turns out, though logical, it’s entirely apocryphal:
[M]y guess is that the original, primary source never existed. Someone probably made an observation or extrapolated from some isolated consumer survey data a number of years ago. Though probably based on flimsy data it made for a powerful local marketing slogan.
Over time, the “majority of consumer spending happens close to home” mantra was so often repeated as fact it took on the force of truth.
Someone at loyalty platform Access Development had similar curiosity and recently went searching for the source of the same data:
Much has been written about this statistic. Although this “80/20” rule may vary slightly from one citation to the next, the principle remains the same. Consumers are less willing to travel beyond a certain radius of their homes to make everyday purchases . . .
Several prominent consumer researchers have written about their unsuccessful effort to find the original source for this stat. Yet despite this, many respected sources like Fortune, Ebay, and MediaPost use this statistic without proper attribution.
In an effort to validate (or disprove) the assertion, Access undertook it’s own study. LSA’s Wes Young also wrote about this for his most recent Search Engine Land column.
Access conducted an online consumer survey earlier this year. There were 2,131 completes (US adults), recruited through a variety of channels including email and social media. What the company discovered was that the apocryphal stat was essentially correct — the vast majority of people are unwilling to travel very far to make “everyday purchases” such as groceries, gas, movies, auto services, home and garden casual dining and so on.
The Access findings are more nuanced and take into account the differences between urban and rural markets, where people may have to drive farther to get goods or services. Rural residents, travel more than 20 minutes on average to make “everyday purchases,” according to the findings.
However most people now live in urban population centers: roughly 83% of the US population now resides in cities (the last census said 81%). Among this urban population, “92% … typically travel 15 minutes or less to make their everyday purchases.” (Some purchase categories are within 20 minutes.)
This is a slightly different statement than saying “80% of U.S. disposable income is spent within 10 to 20 miles of home” but it amounts to effectively the same thing. Trillions of dollars are spent locally, offline vs. billions in e-commerce.
Accordingly, most people spend the vast majority of their incomes locally, within a short driving distance of home (or workplace). In fact the study found a correlation between purchase frequency and willingness to travel. The more frequent the purchase the less willing people were to travel to make it:
This has some meaningful implications for ad geotargeting. But it’s more interesting as the first empirical support (remarkably) for the common-sense notion that most purchases are made close to home or work. The study didn’t explicitly distinguish between home and work, but explored a willingness to travel distances generally.
Now we can confidently say it: “more than 90% of consumers make most of their purchases within 15 minutes of home or work.”