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American Express Co
(An earlier version of this story ran online.)
Leslie Bowers’s customers arrived in droves the Saturday after Thanksgiving, increasing sales fourfold at Peace of the Earth, her Louisville natural bath boutique. They opened their wallets for Small Business Saturday, a marketing campaign created by American Express (AXP) in 2010 that offers cardholders a $25 rebate to shop at local, independent stores the Saturday after Thanksgiving.
Many of Bowers’s customers were enthusiastic about Small Business Saturday but unaware that AmEx was involved. “We were actually shocked at how few people knew,” she says. “People are actively participating, but they don’t know that American Express started it.” This year may go down in retail history as the year Small Business Saturday transcended its status as a corporate promotional campaign to claim a place on the shopping calendar, sandwiched between Black Friday and Cyber Monday—the latter the 2005 brainchild of the National Retail Federation. As in the past two years, AmEx led the marketing push with ads on TV, in print, and online, while local retailers got the message to their customers face to face and through social media.
If the day’s growing popularity means less attention for American Express, the credit-card company is fine with that, says spokesman Scott Krugman. “For Small Business Saturday to thrive, it can’t be about any one company,” he says. “It always needs to be about small business, frankly, whether they accept our card or not.” Krugman says AmEx’s Small Business Saturday transactions were up 21 percent from last year, about the same increase as in 2011.
Besides encouraging shoppers to use their American Express cards, the campaign aims to win over merchants, who pay higher fees for accepting AmEx than for Visa (V) or MasterCard (MA) swipes. The other corporations backing Small Business Saturday, which include FedEx (FDX) and Facebook (FB), get exposure with the business customers they covet. FedEx ran an AmEx gift-card sweepstakes, while Facebook promoted it on its site. The 2011 event “was a tremendous success, driving not only revenue for FedEx but brand awareness in this key target group,” Mike Glenn, the courier company’s marketing executive, told investors earlier this year.
President Obama has marked the day by taking his daughters to bookshops the past two years, even though the conservative National Federation of Independent Business, which led the legal challenge to his health reform law, is a leading sponsor. The day also puts local indie business groups arm in arm with the kind of multinational corporations they’re often wary of. “If [the sponsor] were a company that competed against our constituents in any sense, I think we’d have a pretty different perspective on it,” says Jeff Milchen, co-founder of the American Independent Business Alliance, which also promoted the event. “We certainly would not shy away from saying we want you to go to your local independent print shop rather than a FedEx.”
The marketing around Small Business Saturday portrays the day as a more pleasant alternative to Black Friday frenzy. No doors were busted at Warners’ Stellian, a family-owned chain of eight appliance stores in Minnesota, on Nov. 24. Yet sales were up about 70 percent from the same weekend last year—itself a good weekend, says President Jeff Warner. That boost came despite modest promotion. “We’re not going to open early. We’re not going to be a place where people are going to stand outside and wait,” says Warner. “We flat out said: ‘Don’t give up your holiday; we’ll be here when you’re ready.’ ”
The bottom line: Shoppers and merchants have embraced Small Business Saturday, which this year boosted AmEx card swipes by 21 percent.