Small Shops Promote 'Buy Local' Saturday With Discounts

After the crowds have shopped at large stores and sprawling malls on Black Friday, many smaller businesses are hoping Saturday will be their day.

Small Shops Promote 'Buy Local' Saturday With Discounts
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Thousands of small stores, restaurants, spas — and even dry cleaners — across the U.S. will offer their own discounts and promotions to draw holiday shoppers on what's known as Small Business Saturday.

(Read more: How to Access More Capital for Main Street)

American Express created the day three years ago, it said, to help small businesses struggling during the recession. The credit and charge card company encourages cardholders, who have registered in advance online to make purchases with their cards in exchange for a $25 rebate paid for by American Express, if they buy something at a participating business.

American Express won't say how much the promotion costs, but Susan Sobbott, president of American Express OPEN, the company's small business division, said it is a considerable amount.

But even small merchants who aren't officially part of the event hope to get a bump in revenue during a weekend when they used to be all but forgotten in an avalanche of deep discounts offered by big stores and online retailers. Perhaps more importantly, the day has become an opportunity for small businesses to build a corps of customers who will keep coming back year-round.

Promoting Saturday Sales

In Dixon, Ill., 51 small businesses have banded together to recruit local artists and performers to create a party-like atmosphere on Saturday, and they're also planning other events for the holiday season. A year ago, the combination of the American Express rebate and the events helped give the participating businesses a collective revenue increase of more than 50 percent on the Saturday after Thanksgiving, said Lisa Higby, owner of Distinctive Gardens, a nursery and garden center there. But the benefit goes beyond a one-day jolt.

"It gives us a yearlong impact, much greater exposure for our business," Higby said.

American Express may have intended to give small merchants — and card usage — a boost in a tough economy, but Small Business Saturday is also helping small merchants get a bigger share of the spotlight and spending between Black Friday and Cyber Monday, a shopping holiday dreamed up to get people excited about shopping online on the Monday after Thanksgiving.

For some retailers, the sales they get after people push back from the Thanksgiving dinner table represents a significant chunk of profit for the year. That hasn't been so true for most small businesses. Ninety-one percent of the 1,003 small business owners said, in a survey commissioned by Bank of America, that the day after Thanksgiving has little, or no, effect on their profit.

"Black Friday doesn't do anything for us," said Leslie Leahy, owner of The Hitching Post, a gift shop in Reading, Mass. In fact, it's pretty quiet in town because so many people are at the malls and big-box stores, she said.

'Buy Local' Weekend

To make the most of Small Business Saturday, many small business owners offer discounts as part of a marketing strategy for the entire holiday season. Leahy had good results last year. Revenue at The Hitching Post rose 28 percent on the Saturday after Thanksgiving a year ago from the same day in 2011. She doesn't give discounts on her merchandise, but the $25 rebate from American Express drew customers.

This year, she and other retailers in town are joining for a "buy local" weekend. She'll be serving drinks and treats for customers. American Express sends organizing kits to 50 chambers of commerce around the country to help communities create joint Small Business Saturday events, but many come up with ideas about how to promote the day on their own.

Some small business owners will have the kind of early bird specials that Black Friday is famous for.

Eden Organix, a spa in Highland Park, N.J., will give customers a 10 percent discount on the products it sells from 9 a.m. to noon, says owner Valerie Robinson who is promoting the event on Facebook, Twitter and on her own website. She doesn't expect to get a big revenue boost from the day — she's more concerned about drawing new clients and cementing her relationship with current ones.

"We want to build more of a loyal customer base," Robinson said.

The event has helped some small business owners turn a day that was often a disappointment into a successful one. The Saturday after Thanksgiving is usually one of the slowest days of the year for retailers in Tribeca, the residential neighborhood that is part of New York's financial district.

Many people are away for the weekend so business drops at Babesta Cribz and Babesta Threads, two Tribeca stores. Owner Jennifer Cattaui is taking part in Small Business Saturday for the third time, expecting that she'll get enough of a revenue increase to give her stores a normal take for a Saturday.

This year, Cattaui will give customers 20 percent off everything in her Threads store, which sells clothing, accessories and toys, and 10 percent off the furniture and strollers sold in her Cribz store. And she will have some giveaways, such as accessories for strollers.

She's also joining with about 20 other local businesses to promote one another. The stores, which also include a wine store and bakery, will give customers maps showing them other stores taking part in Small Business Saturday.

"By virtue of banding together and promoting ourselves as a unit, it will up the entire amount of traffic," Cattaui said.

Many Small Merchants Offering Discounts

Small businesses that don't accept American Express cards are having promotions of their own. Benny's, a chain of 32 stores in New England that sell housewares, toys, hardware and clothing, is offering special prices on merchandise ranging from Christmas tree lights to electric fireplaces. Co-owner Arnold Bromberg said the 88-year-old company has done this on Black Friday as well as Saturday for many years.

"You always have to have something different on the two days after Thanksgiving to get customers in," he said.

A search of the special web page set up for Small Business Saturday reveals many businesses that most people don't think of as places to buy gifts, including restaurants and dry cleaners taking part. One such business, Dublin Cleaners in Dublin, Ohio, has experienced a sharp increase in business over the last three years on what is typically the store's slowest day of the year.

Owner Brian Butler says customers want to take advantage of the $25 rebate. Last year, his Saturday after Thanksgiving revenue was up 300 percent from the same day in 2009, before Small Business Saturday began. The revenue increase was enough to offset the $4,000 to $5,000 in transaction fees he paid to American Express for the year.

Although the Thanksgiving weekend is shopping-focused, American Express purposely created the program so that any small businesses could take part. The company has found that restaurants are the top choice for consumers wanting to use the $25 rebate, followed by bakeries, clothing stores, gift shops and bookstores.

Butler isn't offering any discounts on dry cleaning, but uses the $25 savings from American Express as a way to build his customer base. He starts by sending e-mails to customers and advertises on Facebook and Twitter about the savings. One Tweet reads: "AmEx will pay your tab in our store. No strings!!!"

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