In 3rd year, Small Business Saturday gains some traction

The holiday season is no time to exclude others.

But three years ago, that’s exactly what officials at a major credit card company saw happening — at least in the world of shopping.

“Large national retailers have their day in Black Friday, and online retailers have their day in Cyber Monday,” said American Express spokesman Scott B. Krugman. “We thought it would be really powerful if small business owners had their own day during the holiday season.”

Enter the newcomer: Small Business Saturday, a national effort to drive traffic to independently owned shops and restaurants, now in its third year.

Merchants across the state have embraced the campaign and lauded its potential to invigorate Maryland’s Main Streets, despite seeing little increase in traffic on the first two Small Business Saturdays.

“The benefit of it isn’t just to have people come in on that day,” said Hannah Rodewald, who owns The Pleasure of Your Company, a custom invitations and gift shop in Lutherville’s Greenspring Station, a cluster of about two dozen small shops. “It’s more of an awareness that small businesses are very important to the community.”

Retailers said they’re optimistic Small Business Saturday will whet the public’s appetite for a localized shopping experience, but so far, several barriers to participation have produced mixed results.

Many Marylanders said they haven’t heard a thing about it, although some shop owners and consumers said they thought the concept was more pervasive this season because of expanded marketing efforts.

“It seems to have really matured,” Rodewald said. “I think this might be the year. You have to repeat something a couple times before it really catches on. I just feel like more people know about it this year.”

But there’s also widespread confusion about one element of the Small Business Saturday campaign: a monetary incentive for shoppers.

American Express customers who register their cards at shopsmall.com and spend at least $25 at a qualifying small business on Saturday will receive a $25 credit to their account a few weeks later. Eligible merchants also must register.

Customers associate the holiday shopping weekend with mega-discounts, experts said, so the credit entices them to shop even if prices aren’t dirt-cheap.

Details murky

For many people, details of the offer are murky, said Sima Blue, who owns Trillium Ltd., a clothing boutique in Greenspring Station.

Some shop owners said they didn’t know why they should register as a “participating” business. One said she didn’t know the campaign was national, and several shoppers said they’d heard the phrase “Small Business Saturday,” but didn’t know it was tied to American Express.

But that’s sort of the point, officials said. Though the incentive is exclusive for cardholders and stores that accept American Express, “Small Business Saturday itself is much larger than any statement credit offer,” Krugman said.

Though $25 purchases aren’t game-changers for retailers, officials said the point isn’t to inflate sales for one day. Rather, the program aims to address what small business owners say is their biggest obstacle: getting new customers through the door. Then, the ball is in merchants’ court to intrigue customers with unique products and win them over with exceptional service, owners said.

Business owners and American Express officials said they hope the Saturday after Thanksgiving becomes an annual event where all consumers shop local, regardless of what’s in their wallet.

A solid network of small businesses bolsters the entire neighborhood, they added.

“If you buy at a local store, all that money stays in the community,” Rodewald said. “But it also helps all the different cultural and nonprofit agencies in the community … because I don’t know a small business owner who’s not generous with local organizations.”

‘Wildly successful’

Patrick Donoho, president of the Maryland Retailers Association, said he’s been very satisfied with the Small Business Saturday effort.

“Quite honestly, it’s been wildly successful from my members’ standpoint,” Donoho said. “Even though it hasn’t been executed as well as it probably could have been, the concept is just wonderful. My sense is that there’s a pent-up desire for it from the consumer.”

American Express and the National Federation of Independent Business released a survey that seems to confirm the concept’s growing popularity. Of respondents who said they knew about the idea, 67 percent plan to “shop small” this year, compared with the 44 percent who said they did so last year. The survey also found 80 percent of merchants said they expect higher year-over-year sales on that day.

This year, American Express reached out to the U.S. Chamber of Commerce, which coordinated with local business associations to launch their own events. Main Street Maryland, a state-run program, is offering additional discounts at shops in many of the state’s 26 designated Main Street communities, and several regions have organized promotions, including Annapolis and Cambridge.

Baltimore’s Pigtown neighborhood is hosting the city’s only Small Business Saturday event. Ben Hyman, executive director of Pigtown Main Street, said merchants there are hopeful the day’s festivities will attract customers to come to the area, even though the retail selection is slim.

Many of the two dozen businesses along Washington Boulevard are professional services, but there are several restaurants, such as Cafe Jovial.

Didi Kassa, who owns the coffee and sandwich shop, said she expects an increase in customers Saturday. She hopes the event will have the party atmosphere Hyman intends, which she said could help portray Pigtown in a more positive light.

“It would help the neighborhood,” she said. “It would help a lot. It will expose us to people who have never met us before, and it will increase my sales. I’m struggling with that right now.”

Small Business Saturday still doesn’t have nearly the name recognition of its time-honored predecessor, Black Friday, or even the more recent Cyber Monday. During the week of Thanksgiving, several Marylanders who said they were American Express cardholders responded with blank stares to the mention of “Small Business Saturday,” and nationwide, only 34 percent of people surveyed were familiar with it,

Cardholders weren’t directly notified of the program via an email blast or similar tactic; American Express’ Krugman said he isn’t sure why not. Several people said they learned about the credit, and the concept, mostly through word-of-mouth, although some said they saw posters or TV commercials.

More marketing

American Express provides multiple online tools to help business owners do further marketing, including social media tips and printable poster images. Rodewald said she doesn’t plan to advertise the offer at her shop — that’s American Express’ job, she said, adding she expects sales to increase regardless of whether there’s a sign in the window.

But down the hall, Blue said the more exposure her boutique gets, the better.

At least for now, while shoppers are driven by the money-back incentive, “you want them to know that you have [the program] in your store, because it might bring them in,” Blue said.

Many retailers said it’s important for the event to target any and all small businesses.

“I have to give credit to the folks at American Express, because not every one of our merchants accepts American Express,” Hyman said. “A lot of our small businesses are cash only, and the company could easily just say, ‘You’re not part of this.’ But that’s not their approach.”

Blue wondered how long American Express would continue the credit program and whether it made money for them, noting the company brings in revenue from encouraging shoppers to use its cards.

“Let’s say I have three times as many people use their American Express cards as usual,” she said, adding the company charges higher fees than other credit card issuers. “Well, that benefits American Express. Now, if that brings business in on the 24th, that’s fine.”

The notion of a day devoted to small business hasn’t entirely taken hold. The NFIB survey found less than half of independent merchants plan to incorporate Small Business Saturday into their holiday strategies.

That might be an illustration of merchants’ independence, several people said. Small business owners understand the potential benefit, but might need guidance applying the mentality of Black Friday to their individual enterprises.

“[That individuality] makes it harder to pull off a day like this,” Krugman said. “A nationwide ad campaign from a large company has tremendous impact. You don’t have that scale with a small company in one community. In order to create that, you have to have small businesses across the country do it together. And that’s what we’re seeing.”

If merchants continue promoting the benefits of local shopping, many people agreed Small Business Saturday could be here to stay. But, they said, it’ll never be Black Friday — and that’s a good thing.

“I don’t think it’s going to be an event where people are camped out the night before to get a great deal at a small merchant,” Hyman said. “Our merchants can’t really offer that, and that’s not what this is about.”