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2014 Small Business Saturday Significantly Less Profitable Than Expected

2014 Small Business Saturday Significantly Less Profitable Than Expected

In what may have been one of the most unknown and unexpectedly successful marketing ploy in recent years, the tradition of “Small Business Saturday” recently took place on Main Streets across the country. The event was started by American Express in 2010, and in the past four years, it has become a “nationally recognized day,” according to Boston Globe correspondent Jennifer Smith. Small Business Saturday has created a sense of community and has fostered the growth of many small businesses, which might otherwise have gone unrecognized in their respective communities.

But as Forbes contributor Gene Marks notes, a study published at the beginning of December by The National Federation of Independent Business and American Express, shows that this year’s Small Business Saturday (which was held on November 29, 2014) was much less successful than in recent years.

According to the study, more Americans were aware of Small Business Saturday and participated in it this year (about 88 million shoppers went out, which is 14.9% more than the number of shoppers on last year’s specified day). Every public figure down to President Obama was showing support for small businesses, and this year’s event saw 40 state governments and 450 city legislatures pass individual resolutions to support local businesses.

Overall, consumers spent about $14.3 billion at their local businesses this year, up slightly from $14 billion in 2013. But such a small increase in profits doesn’t match up with the large increase in shoppers, as the study notes. Consumers who participated in 2014’s Small Business Saturday only spent an average of $162 per person, which is 11.5% less than the average expenditure, per person, during last year’s event.

In reality, it would probably be more surprising if the event kept gaining support each year. First of all, expertly positioning the day in between Thanksgiving and Christmas hasn’t managed to drum up the amount of business that Black Friday and Cyber Monday do, likely because small businesses can’t afford to offer the painfully low prices that chain retail stores can offer.

Second of all, online shopping is becoming the preferred method of researching and browsing products; even back in 2011, before mobile devices became so popular and so conducive for shopping, about $1 trillion worth of retail sales were influenced by online browsing.

Of course, plenty of small business owners have been able to profit from this trend, because more online sales allow for greater flexibility in terms of employee management and product storage. Nevertheless, there are still plenty of small businesses with strong online presences that simply can’t afford to accommodate packing and shipping their products, therefore requiring these businesses to depend on in-store sales.

It’s definitely worth noting that the concept of Small Business Saturday is still fairly new, and there’s plenty of room for small businesses to find their niche online. But perhaps this year’s event should be a sign to small business owners that the marketing ploys which were successful just a few years ago are not impervious to the influence of the digital world.

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