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Card company makes small-business holiday

Retail: American Express encourages shoppers to buy from smaller stores

Posted: November 17, 2010 6:49 p.m.
Updated: November 18, 2010 4:30 a.m.

Kenneth Chenault, CEO of American Express, right, speaks while New York City Mayor Michael Bloomberg listens during a news conference in New York on Nov. 8. American Express and Bloomberg are trying to spur growth for small businesses by launching a program called “Small Business Saturday” to fall in between the better known shopping days of “Bl...

 

A Small Business Saturday shopping campaign was unveiled by American Express last week, encouraging consumers to shop at small brick-and-mortar stores in their community Saturday after Thanksgiving.

In scouring news releases, AP wire stories and scores of posts on the Internet, The Signal found the same message: American Express wants to give you $25 for shopping at your local small-business store Nov. 27.

Along the way, The Signal also found more than 207,000 people linked to this movement on Facebook as of Wednesday morning.

Shopping day rival
Kenneth I. Chenault, chairman and CEO for American Express, launched the Small Business Saturday campaign Nov. 8 in the city of New York with Mayor Michael Bloomberg.

The intent is to create a national shopping movement, in support of small business, to rival holiday shopping kickoff days Black Friday and Cyber Monday.

American Express OPEN, the company’s small-business unit, developed the concept to drive shoppers to local merchants across the country.

“Small business is the engine of job creation in the U.S. economy,” Chenault said. “It is also among the sectors hardest hit by the recession.”

American Express is posting a $25 credit to 100,000 card holders, who registered their AE card online, and spend at least $25 shopping at any locally owned, independent small businesses that accepts American Express.

Small-business owners can also download online promotional materials to promote their businesses on the inaugural Small Business Saturday.

For every person who “likes” Small Business Saturday on Facebook, the company is donating $1 to Girls Inc., an organization that empowers young women. The company has also agreed to donate up to $500,000 to the nonprofit.

Small business
According to U.S. Small Business Administration, small firms represent 99.7 percent of all employer firms and employ half of all private-sector employees.

Small businesses generate 60 to 80 percent of all new net jobs annually and create more than 50 percent of all nonfarm private gross domestic product.

For every local city and community, there is a more significant factor. For every $100 spent in locally owned, independent stores, $68 returns to the community through local taxes, payroll and other expenditures according to 3/50 Project.

Yet according to a recent study by American Express, consumer spending at small businesses dropped more than it did at large businesses during the recession.

According to the SBA and U.S. Census Bureau, the Los Angeles market ranks first in the nation as a hot spot for small-business owners.

Given the facts about contributions small businesses make to the local economy, and the heavy toll the recession has taken on small firms, this may in part explain why the recession has cut California deeper and longer than the rest of the country.

The 3/50 Project began in 2009 as a grassroots awareness campaign focused on reuniting consumers and independent, locally owned brick-and-mortar businesses in their communities.

The organization asks that consumers return to three local businesses they love and don’t want to lose, and commit $50 of their current monthly budget toward local, independent merchants.

OPEN Forum
The American Express OPEN’s small-business unit promotes products the company offers as it’s company credit cards, as well as services many other institutions offer such as receiving online payments directly to your bank account and scheduling electronic invoices.

The company initiated OPEN Forum (www.openforum.com) to connect small-business owners with each other and industry experts.  American Express has even developed customized tools for finding and following small businesses on Twitter, linking owners by industry.

The small-business segment of commerce is one area that American Express has been traditionally weaker in due to its higher merchant fees.

One could argue that the company benefits from all the reaching out that it is doing.

But it is difficult to argue against a campaign that benefits local businesses and attempts to stimulate the economy by granting cardholders money in the form of a credit for shopping at those small businesses.

A $2.5 million shot in the arm in support of cities and small businesses to encourage consumers to buy is a campaign many people can get behind.

Movement
More than a dozen advocacy, public and private organizations joined American Express in advocating for the Small Business Saturday movement.

Chenault said that supporting local business is more than just a one-day event and he believes the Small Business Saturday is a movement that everyone can help sustain.

“This is not a flash in the pan,” he said. “We are committed to this effort for years to come.”

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