It is that time of the season in which many travel to the mall to purchase gifts for their family and friends. As many scour the internet and the newspaper for coupons and deals on merchandise, they begin to plot their plan of action, as if they were generals prepping their battle plan to conquer the world of retail. The dawning of commercials and circulars enticing consumers with blockbuster early bird door-buster deals and discounts only rallies the troops to ready themselves to part with their hard earned cash. It has become a custom in the United States to stand on a line beginning at 4:30 in the morning, the very day after Thanksgiving, in being one of the first people in that zip code to buy that new trendy item, thus officially ushering in the holiday consumer season.
As soon as the market and financial economist wrap up their turkey dinner, they transform into worker elves in the night, reviewing and revising sales projections and financial modeling, twisting and torqueing the hype around record sales of this gadget and that retailer, hoping and wishing that their information is right, then quick to get their sound bites on news radio and television. By the end of the day of what has become “Black Friday”, all hope that one of the largest retail-consumer events was successful enough to shake the earth from its axis, providing for new records to break next year.
I find this to be very disturbing. Not because of the power of American Free Enterprise system, which I adore and love; disturbing in the sense that so many have fallen out of touch with the economic engine that fuels their local community. Of all of the “Black Fridays” I have bared witness to, not once did I see in a local community, people lining up at Joe’s Hardware Store, or Jane’s Family Clothing Store to support them in making many purchases that would keep the doors of their local merchant open and alive. On the news you never see video clips of people camping the day before at the local Five and Dime establishment. What are viewed are droves of people stampeding the doors of a big box store.
Many would ask why this is so troublesome to me. I would ask them, “How much of that money that you spend on that trinket that you just bought from the big box store actually stays in the local economy?”
In an era of tough economic and financial times, where our great nation faces the “Fiscal Cliff,” most people are not even asking the right questions, “What is it that one can do to help begin to reverse the negative trend?” The one power “We the People” can exercise is our consumer rights. We exercise those rights in the way we spend our money and where we spend our money. Knowing how many communities are also facing fiscal crises, we should be spending as much of our money locally as we can, as our way to contribute in stabilizing local economies.
So listen up small businesses, if you’re going to win over the consumer into your court you need to know what you’re up against. As a consumer it is also important to know how your contribution will make a difference. Statistically speaking, when it comes to the economic engine, 80% of the economic engine of our country depends on small business (fewer than 100 employees, family owned, locally driven) as the delivery system of goods and services reaching consumers hands. Most people choose the merchant they are going to support based on two decision making instincts: the feeling of whom they can trust (the positive relationship and experience); and by power of auto-suggestion (which is triggered by the bombardment of repetition and invasive advertising). Small businesses need to have an approach that is more comforting, more personable, in catering to a patron’s needs. As a smaller retailer your best weapon is the relationship with your clients and the community.
Some people will bark at the idea and make claims that mom and pop shops will not have the things we desire, and we are foolish to think that local family owned retailer could be competitive with a larger institution. I tend to argue. I want you to consider some of the next taking points that may show where you do save money, time, and energy shopping locally.
There are several benefits of purchasing from the local small business. The obvious is that most local merchants do not have long lines or waits due to the personal service they provide. Being that they are local, chances are you won’t have a long drive to their establishment, saving you both time of waiting in traffic and gasoline from traveling to the out of the way location. I had done a small study in just purchasing a pair of jeans. From a local merchant the jeans were $40. I drove less than fifteen minutes to the establishment. I manage to transact business and purchase the jeans within another fifteen minutes after making sure I was comfortable with my product selection. I received first class service, where the clerk was very attentive to my needs and sincerely thanked me for being a patron of their store. During the time I spent in the store, I got to know the clerk, who was a related to the owner of the store. I learned how the store began. I also got to see all the wonderful letters and certificates of appreciation they had posted throughout the store, displaying how they contributed to many local community causes. I knew that dollar was going to stay within the community, and keep a person employed who believed in the brand of the store.
I decided to perform a field study at the big box store. I commuted an hour to the mall, where the same pair of jeans I had paid $40 for previous was on sale for $34.99, at the mall. It was an hour commute and about 30 miles from my home. I spent another fifteen minutes to find parking, and walked another ten minutes before entering the store. It was about fifteen minutes before a clerk even noticed that I was struggling to find the jeans in my size. She did not care to assist me other than making the comment “they are somewhere in that area,” and took off to go on break. After another ten minutes, I finally found the pair of jeans I was looking for and went to the service counter; spent another fifteen minutes on line. When I reached the set of cashiers, they did not acknowledge that I was a customer. I was treated as an inconvenience, as they were more engaged on discussing getting off work early so they could go “party”. I then spent another ten minutes walking back to my car to face a 30 mile commute back home. After all said and done, I got home and noticed a scratch in my car door from the shopping cart that another mall shopper just let drift into my vehicle.
I had done the calculation of fuel cost and time, versus the savings. My trip to the local business was fifteen minutes, less than seven miles, which equated in fuel cost of $1.23, (my car gets around 20 miles to the gallon), and $40 for the jeans. My total spent was $41.23 and 45 minutes of my time for purchasing locally. The trip to the mall cost me $5.25 in fuel, and $34.99 for the jeans, for a total of $40.24 and 3 hours fifteen minutes of my time. As a CEO of a company, my time is very valuable. I know that I could have better allocated the 2 hours 30 minutes extra time spent on going to the mall would have been more productive elsewhere. If I was an attorney that had an hourly rate of $475 per hour, I would have lost $1092.50 worth the business by trying to save a meager 99 cents on a pair of jeans. However, I had to go to the mall because the jeans were “on sale”.
I know you cannot get all of the things you need locally. I am realistic and I have done the math on the difference on high items like computers and plasma televisions and major appliances. And in many cases the local merchant does loose out because they don’t have the bulk buying power the big box stores have.
So this holiday season, consider purchasing from a family owned small business establishment. Chances are a portion of the proceeds you spend at their store will go to that local PBA Little League team, or to the local community food bank. Your buying power just might the consumer dollar that puts another one of your unemployed neighbors back to work. And just think of all of the time you could gain, put to better use. In the process, you never know, you just might become friends with the local merchant who might give you a discount for returning to their store.
Samuel K. Burlum is an investigative reporter who authors articles related to economic development, innovation, green technology, business strategy, and public policy concerns. Burlum is also a career entrepreneur who lends his expertise as a consultant to start-up companies, small businesses, and mid-size enterprises, providing advisement in several areas including strategic business planning, business development, supply chain management, and systems integration. He is also author of The Race to Protect Our Most Important Natural Resource-Water, Main Street Survival Guide for Small Businesses, and Life in the Green Lane-in Pursuit of the American Dream.