Small businesses seems to be in the cross-hairs of a major cultural disconnect. On the one hand, there’s a lot of lip-flapping going on these days about the importance of small businesses. Despite that support, though, many small businesses are struggling to attract customers, financing, and profits.
So what’s really happening here? Do consumers really give a hoot whether they shop at small, local businesses, or are they simply looking for the cheapest price at the big-box store out on the highway?
According to a new American Express OPEN survey, many consumers do care about small retailers, or at least what they perceive small companies can provide.
The American Express OPEN Small Business Saturday Consumer Pulse reveals that 87 percent of respondents think small businesses are critical to U.S. economic growth, and 89 percent believe they contribute to local communities. A whopping 93 percent say it’s important to support local small businesses they value.
Supporting businesses you “value” seems obvious to me. The better question might be whether consumers actually value individual small businesses, or just the abstract concept of small business. When asked why they shop at small businesses, no single answer dominated, with 23 percent citing the Cheers theme song (they know me and greet me by name), 22 percent appreciating knowledgeable staff recommendations, 10 percent enjoying camaraderie with the regulars, and 8 percent out for the rewards and discounts of being a regular themselves.
Still, those numbers are very high, and very encouraging. But not all consumers put their money behind their beliefs. Only about three quarters (73 percent) consciously shop at local small businesses because they do not want them to go away. More to the point, just a third (33 percent) of discretionary income is spent at locally owned independent businesses — an average of $100 a month for their favorite company.
Perhaps that’s why despite all the love, 46 percent thought small businesses were worse (or much worse) off than they were five years ago, while only 24 percent thought they were better (or much better) off. If anything, though, consumers are more positive than small business owners themselves.
Can anything turn the tide? The survey asked about online resources for finding local businesses, and found that social networks like Facebook and Twitter and daily deal sites like Groupon were the most popular (21 percent each), followed by reviews sites like Yelp (17 percent), traditional media outlets like the New York Times (15 percent), and location-based services like Foursquare (8 percent). But 29 percent said they didn’t use any such resource and another 12 percent weren’t sure.
What does this all mean? It means small business owners may be liked, but they have their work cut out translating those generalized warm-fuzzy feelings into cold hard cash.