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Why shopping small is more important than ever

Ned Ehrbar
Producer

After all the Black Friday deals are done drawing customers into big-box retailers across the country, owners of more independent shops will be looking for some love, too. That’s why American Express (AXP) launched the Small Business Saturday initiative in 2010 to help local stores struggling during the recession by encouraging customers to bring more holiday shopping to small businesses on the Saturday after Thanksgiving.

Since its inception, customers have spent an estimated total of $85 billion at independent retailers and restaurants, according to American Express. “We commissioned a county-level economic analysis to provide a closer look at the economic benefits of shopping locally,” Walter Frye, American Express’ VP of Global Brand Engagement, tells Yahoo Finance. “The analysis found that approximately 67 cents of every dollar spent at a small business remains in the local community, so consumers’ local impact during the important holiday shopping season could be significant.”

Ninety-one percent of consumers polled for the 2018 Small Business Saturday Consumer Insights Survey believe it is more important than ever to support small businesses this holiday season, and 83 percent plan to do at least some portion of their holiday shopping at a small, independently owned retailer or restaurant, either in person or online.

“Small Business Saturday is interesting because it doesn’t seem to be, on the surface of it, something that would work,” Sarah McNally, owner of bookstore McNally Jackson in New York City, tells Yahoo Finance. “But it works. It oddly just works. Every Small Business Saturday, all of my stores do extremely well.”

What it’s like for the little guy

For McNally, being a small-business owner has been a constant learning experience. “I was 29 when I opened this store. I wasn’t thinking about money, I was thinking about books,” she says. “I feel like I’m being forced to play outside of my core strengths in a lot of areas. I need to know a lot about the real estate market. I’m a book person, but suddenly I also have to be a real estate person. There’s a lot you have to know about money.”

At nearby Teich Toys and Books, owner Allison McGowan has faced some challenges as well. “Like all retail stores, we struggle from competition with the internet,” McGowan says. “But we consider ourselves toy experts, so if you come into our store we’re going to help you find the perfect gift for a child in your life. You can’t really find that on the internet.”

McGowan, who opened her store four-and-a-half years ago, embraces Small Business Saturday and looks forward to it every year. “In my experience, we’ve gotten a really positive response to Small Business Saturday,” she says. “People want to support small businesses, and when there is something there to remind them that the holidays are coming and they should shop locally, they definitely respond.”

More than just a store

Both owners stress the importance of community relations when it comes to running a small business. “You have something like a bookstore, as soon as you open it, it becomes a public trust,” McNally says. “When I say I own McNally-Jackson, it always feels ridiculous. Bookstores are representative of community spaces that are part of the public trust. It’s almost like opening a church or community center, to a certain degree.”

For McGowan, being able to identify with her customers is key. “There are lots of families in this neighborhood, and they’ve been incredibly welcoming to us,” she says. “I’m a local mom just like my customers, and so when I am choosing stuff for the store, I’m coming from that perspective of being a local mom and what I know my community is looking for. And people really seem to appreciate that.”

Shop small, eat small

Retail stores aren’t the only businesses that benefit from Small Business Saturday. The initiative also spotlights locally owned restaurants and cafes. Carlos Suarez, owner of Rosemary’s Restaurant and three other eateries in Manhattan’s Greenwich Village, has observed the changing habits of diners around the holiday season. “Five years ago, I don’t think many restaurants were open for Thanksgiving, and now it’s actually quite common, and all our restaurants are packed on Thanksgiving,” he tells Yahoo Finance.

“Operating restaurants here in the West Village is a lot of fun. The neighborhood here is amazing,” he says. “Obviously it’s not for the faint of heart. It’s a pretty grueling business, given the hours. It’s nonstop. But the decision to get into this business was entirely fueled by passion for hospitality and for food. It’s that passion that I find so rewarding in working in this industry.”

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This story was originally published on November 22, 2018 as Why you should shop locally on Small Business Saturday