BrainTrust Query: American Express Small Business Saturday – Good for Independent Retailers
Commentary by Bob Phibbs, The Retail Doctor
Through a special arrangement,
presented here for discussion is a summary of a current article from the Retail
Doctor’s blog.
American Express is holding an event Saturday, Nov.
27 and they want shoppers to party at their local independent bricks & mortar
shop or restaurant. There’s
something in it for everyone: the store, the customer, Facebook users and,
yes, American Express.
Stores: By registering for Amex’s promotion on its Facebook page at www.facebook.com/SmallBusinessSaturday,
stores will receive a $100 credit for taking out a Facebook ad (the
first 100,000 merchants who sign up). Amex also provides a video, articles
and a PDF guide to using social media. Independents can also download
a nifty window sign that shows they are participating. American Express is
also asking people who visit the site to give a ‘shout out’ to their favorite
local business via Twitter #SmallBizSat or their own Facebook page.
American Express customers: Cardholders get a $25 credit to their
account as long as they register their eligible American Express Card at www.smallbusinesssaturday.com prior
to Nov. 27 and use their registered 
AMEX card to spend $25 or more at participating
small business merchants on Nov. 27. Eligible merchants include any independently
owned small businesses that accepts the American Express Card.
Facebook users: Even if they don’t own the card, if a Facebook
user chooses to "Like" Small Business Saturday, American Express
will donate up to $500,000 to Girls Inc. to teach young women to be
the entrepreneurs of tomorrow.
American Express: For years, American Express has been shunned by some
independent businesses due to the discount rate; since their handling charge
is higher than Visa or MasterCard. When I was working in a retail store, the
owner witnessed a customer about to buy nearly a grand of merch with an American
Express card and we had to say, "Sorry, we don’t take AMEX." The
customer left without his purchase. We had American Express the next day. That
owner saw the value of welcoming their affluent card carriers.
This is a great
example of using a promotion to connect with customers using social media.
American Express gets more merchants as a benefit and provides value to their
cardholders. But their message is about how they will help grow
their retail partner’s business. That’s the same message retailers
want to have with their own customers: it’s all about how they can help their
customers do more, get more, be more with their help — not constantly
looking at their customers with dollar signs in their eyes.
Discussion Questions: What do you think of American Express’ Small Business
Saturday promotion? How beneficial is it for independent retailers? Which stakeholder
group do you think will benefit the most/least from the promotion?
This promotion has great potential for independent retailers, their customers, as well as American Express. Independent retailers have the most to gain with the resources provided by American Express, not the least of which is the video, articles, PDF guide to using social media.
The other real benefit is the timing, the day after Black Friday. This provides independent retailers their own stage without trying to directly compete with the advertising clutter and prices of the big box retailers. A win-win for everyone!
This will be a great deal for the consumer. Think about it, most of us have multiple AMEX cards. If you register three cards that would be $75 back right? Is AMEX picking up the tab for this? The hard part I see is finding where these retailers are located and who is participating.
The best scenario for the consumer would be to find a small business such as a grocery store and simply buy $25 worth of groceries with each of their AMEX cards. I got a feeling this might be harder than it sounds. It’s a good deal for the retailer because they will be able to get customers they would otherwise never see.
What a creative idea. Everybody wins. I’m surprised that this has been so poorly marketed. I was completely unaware that Amex was running this promotion until I read the article – nothing from Amex, no broad band media, no signage in the stores. It will be interesting to see the results.
Out of the box thinking and an innovative idea. Hopefully it will be a success for all, and other companies will use this as an idea for innovative marketing ideas.
I just registered four cards. Now the big problem. Which retailers are participating? The web site sends me around in circles and never provides a published list of retailers. Do I just drive around aimlessly to see if there is a sign in some window? Sounds like a waste of time treasure hunt at this point. Not worth $100 of my time.
This is a great idea and a win all the way around. I was just talking with another RetailWire panelist about finding ways to help independent businesses become more successful. After all, we can’t ALL work for large corporations. My father was a single store retailer and was able to put my sister and I through college. I’m not sure he could do the same today.
I hope this is a portent of great things to come.
We have a number of clients who are participating, and most of them have pretty low expectations for how it will do. There wasn’t a lot of lead time, and as others have pointed out it’s challenging to understand which companies are participating.
On the other hand, it’s been a great way for these retailers to counter all of the Black Friday hoopla put out by the big boys. I believe the biggest benefit for these retailers will be an extra visit this weekend from their regular customers, and many of them may not have come in on Black Friday Weekend.
American Express says they’re committed to this program for the long run, and as long as they follow through I think we’ll have a big hit in about three years.
On a side note, I know one retailer who is supporting Small Business Saturday but still refuses to accept AMEX. Go figure.
Great concept. Big miss executionally.
Small Business Saturday is a great idea. Like any brand-created celebration, it may take some time to catch on with the public and with businesses. And there will most certainly be detractors who view SBS as another “Hallmark holiday” created to get consumers to spend, spend, spend.
But what should ultimately resonate with consumers far and wide is the need to support the small businesses in their communities. Calling that out on a four-day weekend devoted largely to shopping for holiday gifts can only help moms and pops nationwide–whether through rings at the register or simply highlighting the issues and importance of these entrepreneurs.
Folks at American Express would not allow Ace Hardware stores to participate, or True Value, saying they were “chains,” but actually neither is–all are individually owned retail units, part of dealer-owned cooperative distribution companies.
American Express is doing a huge favor for small and independent businesses. Now, it’s up to independent businesses to take advantage and not botch up the opportunity. Remember, just because a business is independent doesn’t necessarily equate that the business is smart or well operated. Independent businesses need to have an action plan ready to go in order to take full advantage of whatever traffic the Amex promotion creates. Some will. Sadly, most won’t.
Like everyone above, I agree that it is a great idea that has wins for everyone involved. I also agree that execution is not on par with the concept. That being said, it should be a great learning experience for all those involved and something that they can build on for the future.
It is about time American Express did something for its small business customers rather than charge them higher fees for no additional benefits.
Really poor execution. I never thought about it but I am a small business who takes AMEX (I sell books and other hiring tools online) Never heard anything about the promotion until the other day.
Wonder if someone buys something from my store on Friday and uses their AMEX card how I will get paid and how it works.
It could have been a nice thing to promote if I had more time.
If the first place I’m hearing anything, seeing anything, reading anything about it is here, how great can it be? No offense to RetailWire or its readers intended of course. It even appears that their merchants don’t even know about it? That says a lot in itself.
The only winner possible here is AMEX, if that at all.
I cut up my card long ago. There was no benefit to it then and I can’t see any benefit to it now.
If as a retailer, you’ve made a decision not to accept it in your line of choices, you’ve likely done so because you can not accept it and still remain profitable on the sale. No matter how many customers walk out of your store leaving an unprofitable sale behind, it doesn’t make the decision to accept it and ring up unprofitable sales a good one. For the consumer that holds an AMEX exclusively without holding other options? There’s an answer for that but it doesn’t indicate a smart consumer. To each their own choice.
There is no ‘real’ benefit to the consumer other than convenience in carrying any provider’s card. It’s a necessity for some purchases as media, but other than a form of media to execute some transactions there is no value whatsoever. Debt holds no value to the consumer. Airline points or anything else as a reward for the burden is ridiculous. Consumers expect retailers to offer the basic Visa and MasterCard choices and I’ve never had a problem purchasing with those where credit is accepted. Beyond those basic choices of providers, the possibility is real that the retailer just might not accept them. So why bother with an additional card when the first one does just fine and either are a necessary evil.
Retailers and consumers alike could be a lot smarter on the choices of cards and options for payment. Retailers should accept only cards that allow them to remain profitable on the sale. They could do a much better job in educating the consumer with respect to that. Consumers should also understand that it doesn’t help them either in the long run if the retailer is being clipped by your media. That is, if a retailer can’t be profitable accepting it, then there’s likely a real chance that there’s no benefit to you in using it.
Their $25 is no lure to me at all whatsoever.
Mel, really; no benefit to an Amex card? Seriously. They have the BEST product, the best reward program (Delta) and they are the most consistent with regard to customer service. Really, you cut up your Amex? Interesting. Card of choice for me, both personally and with the business. It allows me to pay for trips to Europe, the Far East….
Anyway, as always, this is a GREAT marketing idea for Amex.
While there are a lot of moving parts to this, the general idea of Amex embracing small businesses and leveraging its brand heft to support them is a great idea. Amex has continued to invest in Open and creating customer-centric activities, campaigns and communities for its small business customers. Yes they have had and continue to have a higher MDR but the strength of their brand and the way they leverage their data still sets the standard for branded credit cards. It is going to be interesting to hear what the small, independent merchants think after Saturday.
This is a brilliant promotion, and demonstrates the leadership of AMEX. The pettiness of a little higher rate for a proven premium clientele is a poor reason for not running a business well enough to plan the extra cost into the big picture of a business. If virtually all big retailers can accept AMEX anyone else should be able to figure it out. No sour grapes here.
Yes, the promotion may be too little too late to some degree, but instead, let’s choose to think of it as a good early test for 2011. I found out about it a week ago and put my clients on alert. AMEX provided promotional materials to participating retailers. Some retailers informed their customers in their email newsletters and updates.
I just wish this was conceived to be an EVERY Saturday promotion. It takes a little extra planning and effort to support independents but the math works out that it is the best way to stabilize and grow our economy from the bottom up, inside out. Thank You AMEX.