BrainTrust Query: Main Street Needs Small Business Saturday
Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Doc blog.
I recently viewed comments on an article about the American Express Small Business Saturday, Nov. 26, and why several downtown businesses weren’t participating. Many of the merchants wrote about the high fees charged by American Express as reason enough why they wouldn’t participate.
Are you kidding me?
AMEX is promoting the heck out of this day; sure it’s a marketing program but so what?
Based on American Express spending data as of Dec. 2, 2010, small retailers that accepted American Express Cards — including those that sold apparel, bikes, books, electronics and flowers — saw an estimated 27 percent increase in sales on American Express Cards in 2010 compared to the same day after Thanksgiving in 2009.
Now, compare that 27 percent to any potential expenses. Let’s say a store does $50,000 a month. If two percent of its customers pay with an American Express card, that would be about $1000 in sales. At a three percent discount rate, that would be about only $30 for the month.
It’s not a matter of losing business because a customer doesn’t have another card, it’s that the customer profile of AMEX customers is much higher than any other. Jewelry stores have known this for a long time.
Additionally each quarter, American Express provides five reports showing cardmember spending at your business, including:
- Who your customers are.
- Where they’re from.
- How they spend at your business and in your competitive marketplace.
Maybe you already take their card but haven’t participated in signage, your own press release or rallying your local merchants to publicize the day. That’s like having a new car in the driveway and not giving it gas.
Local businesses, Main Street organizations and Chambers of Commerce could look at:
- Providing maps to participating merchants
- Creating a QR code to post in the window linking to participating businesses
- Putting out red welcome mats to show their participation and build on the buzz.
American Express Small Business Saturday isn’t a panacea; it won’t fix that surly customer you always get in looking for a deal. It won’t make your employees show up on time or give you free shipping from a supplier. But it will definitely expose your store to more customers.
Discussion Questions
Discussion Questions: Does Small Business Saturday make sense for independent retailers? If stores are planning to participate, what should they be doing to maximize results?
I am not sure of the time it takes to apply and be approved for taking the American Express card, but if I were a small retailer I would have made sure I had done so and was ready for Small Business Saturday. There are not many times a small business owner gets to participate in a TV ad campaign.
True, it is not free — you have to be willing to pay the higher American Express fees, but it seems a reasonable expense to potentially gain new customers. I agree with Bob that if you already take the card and don’t promote the event you are losing a great opportunity.
Small Business Saturday makes sense for indie retailers. Amex is promoting it like crazy. Shoppers, whether loyal customers or folks looking for a quick bargain, will be out in force. Why wouldn’t retailers want customers spending money in their stores?
You know, my father was an independent retailer and he put 2 kids through college without either of us paying a dime. Sure they were state schools but still, he paid for everything. At some point, around 15 years ago, I realized he would never be able to do that today.
We need something more than “Small Business Saturday” sponsored by American Express. We need “Small Business Strategy” supported by legislation to give the independent retailer at least some of the perks and breaks enjoyed by the largest retailers. Or maybe shift those perks and breaks from corporate retailers to the independent retailer.
Any time a company with the draw of an American Express works to promote more business for you, there is no good reason not to grab onto it and enjoy the ride. If more business is the goal, what does it matter which credit card the customer uses? The goal should be to invite them back a second time to use the card.
Independent small businesses have a very hard time doing anything as a group for one good reason: they are independent and not a group of anything. The business world loves to group all independents together and that’s simply not the way it wants to be. For one thing, American Express in itself is very big business, so their lead for “small business” Saturday is perceived as being self-serving and insincere. It’s up to each individual independent business to create business for themselves and one has nothing to do with the other. That’s what makes them independent and small.
I should start by saying what AMEX is doing is not a bad thing. It’s a good thing. Of course it is. However, let’s not forget why they do it.
I think if we look back on past discussions about this effort, we’d be reminded about how poorly it was done. This time around, it’s being promoted a bit more, but certainly not better. But at least this year, I’m aware of it. Nevertheless, the message is so poorly delivered, I can understand the small business reluctance.
Supporting and buying local has real and tangible benefits. Unfortunately, they are always overcome by price. No matter what, the bottom line is price. All of the tangible benefits of local and small businesses are tossed under the bus by cheap goods. If that were not so, there wouldn’t be news reports of people camping out already as of Sunday at Best Buy for the deals to break 4 days from now.
It isn’t that I don’t think that consumers know what is inherently in their best interest, it’s just that a cheap TV overrules their better judgement.
Lastly, with respect to Paula Rosenblum’s comments, neither large nor small businesses should be subject to winning or losing based on legislated perks and breaks. No one in a legislative position locally, state or federal should be picking winners or losers based on their judgement. They have proved they are inept at that and the playing field should be level without legislative interference.
Is lack of merchant enthusiasm really a problem? Bob may have seen some online grousing, but other information suggests an enthusiastic merchant base and growing publicity:
Local merchants are gearing up:
–Orlando Sentinel: Orlando Merchants Warm up to Small Business Saturday
–WLKY-TV Louisville, KY: Locals Gear Up For Small Business Saturday
–San Diego Business Journal: ‘Small Business Saturday’ on Its Way to North Park
–KCAU-TV Sioux City, IA: Local Shops Excited About Small Business Saturday
–WDBJ-TV Roanoke, VA: Local businesses gear up for a special Saturday
–and many more
Plus there’s a near doubling in Facebook likes (1.2MM in 2010 to 2.3MM today) and even big bad large corporations are backing the program (Facebook, Google and Twitter on facebook.com/ShopSmall; Travelers Insurance, etc.)
There are plenty of ways local businesses can draft off the buzz:
–In-store: Post window signage, add a $10 gift card for every $100 spent, Raffle off prizes.
–Online: Add a webpage touting plans (not too late to get indexed on search engines), offer digital coupons, promote in-store events on Facebook (and get $100 in free ads)
It’s not too hard to find disgruntled comments about any idea, thanks to web anonymity. But if there are a few merchants concerned about fees, no one says the programs need only apply to Amex holders. Overall, this program looks like a winner.
I am involved, but nobody wants to buy groceries with the deal. They will spend it on clothes, and gifts for Christmas. If I had another type of business, than it would be pushed hard here, but it is not the choice destination for this Saturday. Oh well…Happy Thanksgiving to all.
I’m with Paula. Every little bit helps, but it’s clear that the tax breaks that huge companies enjoy just don’t trickle down to the mom and pop deli that plays by the rules.
I’d love to see the Small Business Saturday campaign expanded to several days per year. Let’s all go local.
Amex may be a point higher than Visa or MC; but, they’re also the only ones promoting this event and other events too. Creating barriers to sales (e.g., not accepting AMEX) is a good strategy to remain small.
Most importantly, small business must stop acting like they’re a victim. There are opportunities to create distinction in virtually every marketplace.
If this is really the swell deal Bob claims it is, perhaps the retailers who refuse to participate are demonstrating the thinking that keeps them small.
I think this has everything to do with the segment of retailing in which the business owner operates. Apparel and many other non-food items tend to be thought of for this promotion. Food and drug stores may have more of a challenge attracting shoppers.
I’ve not seen any Amex marketing for the event yet, possibly because I’m not an Amex cardholder. So, that leads me to conclude that Amex is not using this event to expand their customer base.
For retailers, the question is: what is it worth? Think in terms of expected sales gains and total participation cost. My guess is that most independent retailers would not even consider such a marketing program, without a provider such as Amex. So maybe the answer is “priceless,” or can we use that here?
I like the idea of Small Business Saturday and think it’s an interesting and inventive play by AMEX. Ignorance isn’t bliss in this case.