Does Small Business Saturday pay off?

Andrea Pena: It’s not all about profit margins; it’s about getting people in the door.

What started as a credit card company advertising campaign has spawned a multibillion-dollar shopping habit across the United States and the United Kingdom, but does Small Business Saturday live up to the hype?

Multiple area retailers agree the day no doubt means big business, but the timing and steep price declines don’t always deliver vastly increased store revenue.

“That whole weekend is busy,” said Bryan Simpson, co-owner of Five Pound Apparel LLC. “Black Friday used to be the day, but now Small Business Saturday is our busiest day of the whole year.”

Simpson said the Missouri-centric, philanthropic clothing retailer, with locations in downtown Springfield and Farmers Park, has a line at the cashier from the minute it opens to the minute it closes. He declined to disclose Small Business Saturday sales volumes, but said the number of purchases in his store that day have increased the past three years.

Retailer drawbacks
A day after the nation’s largest shopping day – Black Friday – this year’s Small Business Saturday is slated for Nov. 28. The close proximity can be a blessing and a curse for retailers.

“There is so much energy on Black Friday and so much energy that goes into Black Friday, I wish, as a retailer, there was more of a cushion between the two days,” said Meghan Chambers, owner of Farmers Park clothing retailer Staxx and children’s clothier Jellybeans. “I think people are excited, and there are those dedicated ones who will always shop, but it loses some momentum because it follows the biggest day of the year.”

However, Chambers embraces the weekend, noting it’s the most important of the year for her. Last year, she even opened for the first time on Thanksgiving evening – what has become known as Gray Thursday – for a “nightcap” and pajama party.

“We were only open two hours and we took in about half the sales we usually do all day Black Friday,” she said, declining to disclose sales numbers but noting she plans to continue the tradition this year.

Fellow south-side clothing retailer Modern Society also has sales plans to keep up with big-box retailers, but co-owner Andrea Pena said that isn’t always best for business.

“People see these big-box retailers with these amazing deals, so we have to do something to drive them here,” she said, noting Black Friday brings in roughly four times the sales of Small Business Saturday for Modern Society. “The Small Business Saturday mentality helps, but retailers makes less of a margin with these sales.

“This day isn’t about making a big profit; it’s about getting people in the store.”

Chambers said Black Friday has a long history of savings, but believes a lot of those discounts are a misconception, citing creative pricing by big-box retailers.

In the latest National Retail Federation survey, when asked which factors are most important in their holiday shopping decisions nearly three-quarters identified price discounts.

Origins
The lure of Small Businesses Saturday still attracts retailers that benefit from national marketing without lifting a finger. Started as an advertising campaign for American Express in 2010, the day officially became part of the holiday shopping weekend in 2011 when everyone from President Barack Obama to small-town mayors voiced their support.

According to a survey for American Express by independent marketing performance specialist Ebiquity, an estimated $14.3 billion was spent at small and independent businesses during Small Business Saturday last year. Comparatively, the NRF reports Americans spent more than three times that on Black Friday, coming in at $50.9 billion.

While the NRF hasn’t yet released Black Friday projections for 2015, its recent survey found holiday shoppers plan to spend an average $463 on family members’ gifts, up from $458 last year and the highest in the survey’s history. Average spending, including personal expenses, is expected to reach $805.

Downtown Springfield Association Executive Director Rusty Worley couldn’t estimate how many downtown retailers take part in Small Business Saturday, but said last year, such retailers as Springfield Hot Glass reported their best ever sales.

“The traffic downtown is several times that of a normal Saturday,” he said. “People know supporting local businesses pays dividends to the local economy.

“This day is an opportunity to take a look at those local retailers you love and those you want to know more about.”

For Chambers, while the day is stressful and has drawbacks, it also has a purpose.

“We do bring in a lot of sales on Black Friday and that’s important, but it’s also important the community support Small Business Saturday,” she said. “Small businesses are the start of major businesses. We make the business world go round.”