Predictions for Black Friday and 2013 holiday sales range from tentative to lackluster, thanks partly to a drop in consumer confidence following the government shutdown. But one thing is certain – major retailers aren’t taking chances. That means stores opening at 8 p.m. on Thanksgiving, holiday ads before Halloween and aggressive layaway programs and discounts through Cyber Monday.
With Black Friday turning into Black Weekend, there’s some fear that Small Business Saturday – a nationwide campaign launched by American Express in 2010 – may get lost in the blitz, along with the small businesses that can’t afford to slash prices.
But there’s a unique opportunity for small businesses, according to Ronald C. Goodstein, Associate Professor of Marketing at Georgetown University’s McDonough School of Business, who specializes in retail and consumer behavior.
“With consumer confidence down this year, people will give fewer gifts but more meaningful ones,” he said. “The competitive advantage for small businesses is the ability to provide personalized service. They can help customers pick that thoughtful, relevant gift in a way that Macy’s, Walmart or Target can’t.”
The best way for small businesses to win customers, he adds, is to join forces.
Thinking little and local
Power in unity is what drove Betsy Cross and Will Cervarich to launch Little Boxes, a two-day post-Thanksgiving shopping event in Portland, Ore., that rewards consumers who shop the city's local retailers.
Little Boxes was born in 2011, after Cross saw a Black Friday ad for a big-box store opening on Thanksgiving night.
“It struck me that you never think about small shops on Black Friday. I thought, ‘There has to be a way we can band together and be more powerful,’” said Cross, who co-owns the Portland boutique betsy & iya with Cervarich, her husband.
The campaign now unites over 170 businesses, which offer discounts and raffle prizes to customers. It’s also boosted bottom lines, with some store owners reporting as much of a 50% increase in Black Friday sales since joining Little Boxes.
Cervarich adds that the goal isn’t to compete with Black Friday or Small Business Saturday, but rather harness existing buzz. “There's no question that AmEx’s Small Business Saturday has helped focus the spotlight on small businesses. But one of the reasons we started Little Boxes was because it didn't seem right that shopping locally should come only after you've shopped big boxes.”
There are a number of similar initiatives brewing nationwide, including Seattle’s Gift Local Pledge and Dallas/Ft. Worth’s Spend and Win campaign. But even smaller communities are getting big benefits from building their own shop-local holiday campaigns.
The city and Chamber of Commerce in Fallon, Nev., created the Live Local Fallon campaign this summer to encourage residents to spend locally, rather than driving to nearby Reno. They’ve recruited 155 businesses to participate in a campaign where shoppers get stamps in a “passport” that makes them eligible for raffle prizes for every $15 spent. There’s a special push around Black Friday, during which incentives for shoppers will be tripled.
“We’ve been very concerned about the leakage of dollars getting spent outside Fallon,” said Rick Gray, executive director of the Fallon Convention and Tourism Authority. “We tried educational campaigns and ads. But until we came up with this tangible way to reward residents, we didn't feel the message was hitting home.”
But other non-retail small businesses prefer to avoid one of the busiest shopping days of the year. Visit Myrtle Beach is launching Travel Saturday this year. For 24 hours after Black Friday, gift-givers and deal-seekers can book discounted travel, lodging and entertainment for 2014 at participating small businesses in the South Carolina beach community. The idea is to spotlight a travel-centric economy on a day when consumers are likely to be at home, online and less occupied with retail deals.
According to Goodstein, this is the kind of creative thinking and unity that small businesses need to compete.
“Black Friday used to delight consumers and offer real deals. Now big companies buy in order to sell at sale price. They compete on lower margins, which means less quality,” he said. “Small businesses need to work together to lower prices [but keep quality high]. Offer consumers service and something special in a tough economy at a discounted price – you can’t beat that.”
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