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: Does Small Business Saturday make sense for independent retailers? If stores are planning to participate, what should they be doing to maximize results?