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'Small Business Saturday' offers incentives for shopping locally

By Deborah Bloom, CNN
  • Program intended to boost local businesses
  • Sponsor American Express offers incentives to consumers, advertisers
  • Too early to analyze impact of first Small Business Saturday

(CNN) -- Despite the retail madness of Black Friday, small businesses traditionally see little difference in their sales. Bookstore owner Laura Keys actually recalls losing revenue last holiday season after Target, Wal-Mart and Amazon battled each other in a price war over last season's hardcovers.

"People are concentrating on malls and stores for the big deals," said Keys, owner of Blue Elephant Book Shop, an independent business in Decatur, Georgia. "We aren't exactly the focus of activity when everyone is looking for great deals on flat-screen TVs."

According to Cinda Baxter, American Express retail expert and former small business owner, Black Friday has evolved to exclude smaller merchants. "Since the big-box businesses came in with such financial strength in the last decade ... it's been impossible for independent businesses to compete."

To boost small business sales, American Express held its first-ever Small Business Saturday, where consumers are encouraged to spend locally. Baxter said Small Business Saturday is an opportunity for American Express to flex its financial muscle to help out local economies. "This is our way of working together ... to bring consumers back together with the independent businesses."

According to Civics Economics, analysis and strategic planning consultants based out of Austin, Texas, and Chicago, Illinois, 68 cents of every dollar spent at a small business stays within the community. Big retail chains keep 46 cents of every dollar within the community, the company says.

With online purchases, unless the product is shipped to the same ZIP Code as its origin, the local community keeps none of the profits, said Baxter.

To motivate consumers, American Express gave a $25 credit to 100,000 card members who register their card and use it to shop on Small Business Saturday. American Express also gave $100 worth of Facebook advertising to 10,000 business owners who signed up to participate on Facebook.

Despite Small Business Saturday's widespread publicity, some small business merchants such as New York boutique owner Ronen Jehezkel had not ever heard of the program. And although some retailers knew of Small Business Saturday, few reported noticeable sales increases.

Keys said two customers made purchases at her store on behalf of Small Business Saturday. "Our sales are up today for a normal Saturday. It's hard to identify exactly why but I think [Small Business Saturday] may be having some influence."

In Scituate, Massachusetts, toy store owner Jerry Burke saw little, if any, difference to clientele. "It's a busy Saturday this weekend regardless, but it didn't feel significantly busier because of Small Business Saturday."

Yet, Baxter said that the annual Small Business Saturday is just the beginning of American Express' effort to build up small businesses.

The company plans to introduce more local business-building initiatives. "We want to make sure the independent business owner has a stake in the game again," she said. "This is the way to do it."