Small Business Saturday Hits Its Stride

NEW YORK ( MainStreet) -- In six days, thousands of small businesses across the U.S. that take the American Express ( AXP) card will promote Small Business Saturday -- an initiative meant to rival big-box retailers vying for consumer dollars on Black Friday and Cyber Monday as the holiday season kicks into full gear.

This is the second year American Express is running the promotion meant to encourage consumers to shop -- hopefully by using their American Express cards -- in locally owned, non-chain stores. But this year the initiative has seen significant expansion, a foreshadowing of the potential of this growing movement.
American Express saw a 28% rise in sales volume for Amex-accepting small-business merchants on Small Business Saturday 2010 versus the same day in 2009.

Small Business Saturday was created last year by American Express in response to what the company says is businesses' most pressing need: more customers.

"Year 1 was about claiming the day. Year 2 is about empowering small businesses to own that day," says American Express OPEN spokesman Scott Krugman.

"I think Year 3 you do start to see the snowball effect -- it becomes a part of the holiday tradition nestled between Black Friday and Cyber Monday," Krugman says.

And it's clear the movement works. American Express saw a 28% rise in sales volume for Amex-accepting small-business merchants on Small Business Saturday 2010 versus the same day in 2009. Although the company does not have sales projections for this year, given the growing support of the movement representatives say it's sure to be significantly more. A poll of consumers has 89 million saying they plan to shop locally on Small Business Saturday.

This year, social media titans Google ( GOOG), Facebook and Twitter have shown their support for Small Business Saturday by encouraging businesses to share their stories and business information as promotion.

American Express is giving $100 in free Facebook advertising to the first 10,000 business owners who sign up. For consumers, American Express is offering $25 statement credit to the first 200,000 cardholders who registered their cards to shop at locally owned small businesses on Saturday.

FedEx ( FDX) is also encouraging consumers to shop locally. All month long it's been giving away "Shop-Small" American Express gift cards, each worth $25, to consumers through its own Facebook page and offering a special 20% savings to businesses that use FedEx Office Print Online to print Small Business Saturday materials through the event.

The Small Business Saturday page on Facebook also features an interactive map where shoppers can quickly find the independent businesses in their communities promoting the initiative.

More than 200 advocacy organizations have decided to support the movement.

One such organization is Independent We Stand, which promotes the benefits to local economies of buying from small independent shops.

American Express has "the resources and demonstrated commitment to promote the importance and benefits of supporting small businesses," says Independent We Stand's spokesman, Bill Brunelle. "It's a great example of a major brand that gets it and is willing to do something about it. We need more companies like Amex to step up like this."

Locally owned businesses reinvest in the local economy at a 60% higher rate than chains and Internet retailers, he says, so the initiative will also help revitalize economies.

There's also appreciation that the movement is not just for direct retailers.

"Small businesses need sales no matter what. Whether they are retail- or service-oriented, they need business," says Jean Card, a spokeswoman for the National Federation of Independent Business.

"We anticipate this getting to be more well-known as each year goes by," Card says. "Our hope is that someday it is as big as Black Friday. I think there is potential for that."

All Creatures Veterinary Services in Long Beach, N.Y., is taking advantage of the event.

"We do pretty large volume on Saturdays . Maybe clients will be encouraged to purchase some other form of pet product -- maybe some dog treats or cat chow, so it's beneficial to both the client and us. And it's good will in the neighborhood," says Michele Knox, All Creatures' office manager.

Not everyone agrees with American Express' initiative.

The Business Alliance for Local Living Economies, a nonprofit organization looking to promote socially responsible businesses, is made up of more than 80 community networks in the U.S. and Canada, representing more than 22,000 independent business members. It is instead promoting the Shift Your Shopping campaign through the week of Nov. 25-Dec. 4, as is the American Independent Business Alliance.

Janneke House, executive director of Cambridge Local First , a community of small businesses in Massachusetts, says they were approached by American Express but chose not to participate "because a lot of our local businesses do not carry American Express because the fees are so high," she says.

She says the initiative would get even more traction if Amex agreed to eliminate the interchange fees for even just one day.

Cambridge Local First has instead joined with BALLE and supports Plaid Friday -- a California Bay Area-born movement that encourages the local shopping experience (while wearing plaid, as a contrast to "Black" Friday efforts that benefit mainly larger retailers).

"Instead of showing up to a big-box store at 4 a.m. with that rush to get the best deals, it's all about the experience of shopping. You're supposed to enjoy that day by taking your family, stopping at the cafe to grab coffee and just enjoying," House says.

American Express OPEN's Krugman wants to make clear that the initiative is not just about padding the card company's coffers. "You don't have to take the American Express card" to participate in the day, Krugman says. "That's not what it's about. It's about a general movement to shop local and make sure that small retailers and local merchants have more business driven to them during the holiday season."

Even businesses that choose not to support the Amex initiative will benefit from a halo effect, he says.

"If you are a Main Street merchant, you are going to benefit on Nov. 26," he says.

-- Written by Laurie Kulikowski in New York.

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