Louise Grimmer in The Mercury | Talking Point: Plugging in to the new economy

A GROWING number of small businesses are reporting positive spin-offs from the rise of the sharing economy and increased use of social media by tourists and travellers in Tasmania.

Visitors choosing Airbnb are often attracted to non-traditional accommodation options because they are seeking a more authentic experience – they want to “live like the locals”.

They want to discover more and make a deeper connection with a destination, and this requires alternative sources of information from mainstream tourism marketing.

Tourists seek recommendations from their hosts about the best local places to eat, drink, shop and enjoy cultural, historical and leisure activities.

Who better to provide an insider’s guide to Tasmania than a local? As a result, small businesses are discovered by tourists through word-of-mouth recommendations, as well as online reviews from those involved in the sharing economy.

There is growing anecdotal evidence of local Airbnb hosts providing their guests with a wonderfully diverse range of recommendations for local eateries and cafes, speciality shops and cultural experiences. Small or new businesses that may not necessarily feature in the traditional tourist brochures, or who are located outside the usual tourist hot spots, are enjoying increasing numbers of customers through recommendations provided by Airbnb and social media.

Given many Airbnb operators are located outside central business districts, this is a potential game-changer for small businesses on the city fringes, as well as in urban, rural and coastal regions to take advantage of increasing visitor numbers to their area. These tourists and travellers want to discover the hidden gems the locals know and love.

Airbnb has developed a series of online guidebooks described as “the key to the city … the definitive guide of the best local spots as told by local Airbnb hosts”.

These “curated” guides, combined with social media recommendations, are powerful tools for promoting local small businesses.

The other significant factor at play is the use of social media, online reviews and blogs by tourists themselves, and if you are a small business without a website or social media presence (Facebook, Instagram, Twitter etc), then your business is missing out on the conversations tourists are having with their friends, family and followers — all potential tourists themselves.

Research being done at the University of Tasmania has revealed that about half of Tasmanian small retailers do not have a website and about the same figure does not use social media.

Recently the Sensis eBusiness Report found 43 per cent of Tasmanian small business websites are not optimised for mobile use.

The use of social media, online reviews and blogs by tourists is a significant factor in the promotion of many small businesses. Illustration: PAUL NEWMAN

A combination of word-of-mouth, online and social media recommendations provide small businesses in Tasmania with an opportunity to promote their businesses, so it is vitally important small businesses improve their online presence.

As well as promoting individual businesses, word-of-mouth, online and social media recommendations can also assist small businesses gain benefits through using horizontal marketing. This is a concept whereby two or more businesses join for marketing purposes to attract more customers.

This can work in two ways.

A group of different types of business in a particular area work together to promote their location as an attractive destination.

This approach can have a significant effect on increased visitation, spend, and sense of community and is evident in some areas around the state.

The Mid-Town area in Hobart – the section around Elizabeth St between the city and North Hobart – is an excellent example of a group of traders working together to promote each other’s businesses and their trading locale.

Another example is in the wine industry. There are many interstate and overseas examples, but in Tasmania think of the Coal River Valley just outside Hobart, or the Tamar Valley in Launceston. Businesses in these regions, despite being competitors, have realised the power of horizontal marketing and economies of scale.

In marketing their own business and supporting competitors in their region, they are able to attract many more visitors (to the region, and as a result to their own business) than they could through individual marketing.

Alternatively, horizontal marketing is very effective when a group of traders selling the same product work together to create a map or trail for their products, allowing visitors with an interest in a specific product to visit different businesses selling the same thing.

This concept has been successfully adopted by the whisky industry in Tasmania, where the notion of assisting competitors to build a sustainable whisky market was originally championed by Bill Lark. Very early on, Lark recognised that competing distillers would need to work together if they were to create enough demand for their products to produce a sustainable industry.

He continues to mentor and encourage budding distillers around the state, and Tasmanian whisky is now recognised as some of the best in the world.

A Tasmanian Whisky Trail marketing campaign has been developed, which allows whisky lovers to travel Tasmania visiting distillers who are actually in competition with each other.

The “trail” concept could also work well in Tasmania with other types of businesses, for example bookshops, art galleries, providores, artisan producers and gourmet cooking schools.

Times are changing for small business, and the continued rise of the sharing economy and the influence of social media is set to deliver benefits for local small businesses in Tasmania.

Dr Louise Grimmer is a small business and retail researcher with the Institute for the Study of Social Change at the University of Tasmania.

This article was originally published in The Mercury on 4 October 2016.

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