Why do customers shop at local small businesses?
– Stephanie Rabiner is a contributor to FindLaw’s Free Enterprise blog. FindLaw is a Thomson Reuters publication. This article originally appeared here. –
Despite hard times and shrinking profits, Americans still shop at locally owned, independent retailers.
A new small business survey from American Express polled 1,000 consumers aged 18 and older. Ninety-three percent of respondents believe that it’s important to support local small businesses. And on average, they spend about one third of their monthly discretionary income at these stores.
How can you capitalize on this information?
Survey respondents primarily shop at small businesses because of friendly employees and product knowledge.
Additionally, 87 percent of respondents share favorable opinions about a business, while only 69 percent share negative feedback. The majority use word of mouth and social media. Only 13 percent use sites like Yelp! and Citysearch.
Do you already have the right employees with the right knowledge? If so, the small business survey seems to suggest that you should work on peer-to-peer advertising. Yelp! receives a significant amount of attention these days, but social networking appears to be a better use of resources.
Bakery pushes own brand after years of white-label production
One way to counter the effects of the recession is to start a retail brand. That’s what entrepreneur Karen Trilevsky did.
The founder and CEO of FullBloom Baking Co, a 22-year-old natural foods bakery outside San Francisco, started rolling out her own line of branded snacks in 2008, after years serving as the behind-the-scenes regional baker for big customers like Whole Foods.
Trilevsky, 54, admited it’s been tough to create a market for new products in the crowded natural and organic foods space, which commands premium pricing –- sometimes as much as 50 percent –- over conventional grocery items. With all the belt tightening, she said customers are often reluctant to try new things.
“The grocery stores seem to be much more reticent to make changes,” she said. “There’s no risk taking going on.”
Even so, FullBloom has been able to carve out shelf space for its products, offering up snacks customers can’t find elsewhere in this premium niche of food retailing.
“By having these products more unique, it does enable us to price them where they belong,” said Trilevsky, whose lineup includes items like Kuko Bites, a chewy wheat and dairy free snack resembling macaroons, and Toasted Oatmeal Bars, which include whole grains, cherries and raisins.
Will chocolate chip cookies make the branded cut? No way, she said.
Boomer sees business in discarded mannequins
– Kara Ohngren is a writer and editor at SecondAct. This article originally appeared here. The views expressed are her own. –
Judi Henderson-Town felt trapped. For years she was unhappy as an account executive at such industry giants as Johnson & Johnson and United Airlines. She found corporate life “soul-destroying.”
“I wanted something more entrepreneurial,” said the 53-year-old Henderson-Town. “But I didn’t know it was an option — no one I knew growing up owned their own business.”
In the past decade she’s carved out her own eco-friendly niche and launched a San Francisco Bay Area business that recycles and then resells old mannequins. Henderson-Town has become a clearinghouse for businesses looking to dump old displays that previously ended up in landfills. “The retailer saves on the disposal fee, and we gain inventory — it’s a win-win,” she said.
Her business, Mannequin Madness, is now certified green and earned special recognition from the Environmental Protection Agency for recycling 100,000 pounds of mannequins in one year. By collecting used mannequins, cleaning them up and renting or reselling them to businesses, artists or others looking for affordable displays, she’s proving green business is good business.
The “A-ha” Moment
Startup Toovio offers “Minority Report”-type ad service for retailers
Big Brother has the capability to watch – and respond to – your every spending move. That’s the premise behind Toovio, a startup that has created technology to help retailers and other consumer-facing companies market personalized offers to their customers in real time.
Think of the scene in the film “Minority Report”, when Tom Cruise’s character is walking through a mall while his eyes are getting scanned and he is being bombarded by a slew of personalized 3D ads.
“We call it offer orchestration,” said Toovio’s CEO Josh Smith, 31, of the capabilities that allow companies to communicate custom offers over a range of channels that include checkout, website, kiosk and customer-service call centers.
“We have visibility into their (customers’) previous behavior,” he said. “There’s learning, based on whatever interaction is happening, and we’re getting smarter – hopefully driving revenue.”
Toovio, which already has a number of small to mid-sized companies in the U.S. and Europe using its technology, will next month test a service that takes advantage of mobile apps that consumers download on their smart phones.
The company, working with a hardware provider, will partner with retailers to position communication devices throughout their stores. The devices detect when a customer is approaching by way of the phone’s GPS and serve up a deal.
“As the consumer enters the field of vision of the device…it can message them,” said Smith, whose venture employs 15 in Tampa, Florida, and is targeting small to mid-sized companies. “It can actually be a dialogue, a full-blown Q&A, it could be HTML scripting, images, video. The content is very robust and it’s interactive.
Small businesses offer bin Laden specials
As Americans took to the streets to celebrate the death of Osama bin Laden, C. J. Grouse was rushing to print thousands of new t-shirts to take advantage of the occasion.
“This is probably the biggest bounce we’ve seen from an individual news story in the last five years of doing this,” said Grouse, 43, who launched RoadKill T-Shirts with his brother in 2005. “We had our designs up yesterday by noon and we sold over two thousand of the different designs in 24 hours.”
Grouse said his most popular seller has been a shirt with an Uncle Sam icon and the message: “We Got You Osama bin Laden May 1, 2011″. Other shirts include a bin Laden likeness behind red crosshairs and the slogan “Burn In Hell” and one inspired by Facebook, with the words: “Osama bin Laden Is Dead. 311,275,382 People Like This”.
Grouse said he normally sells about 2,600 t-shirts through the website every day, but expected to “more than double that” with the bin Laden merchandise.
“It’s driving traffic to us that we may not have seen in the past,” he said, noting the Cornelius, North Carolina-based company has done well in the past with shirts based on the death of pop superstar Michael Jackson and with the recent antics of actor Charlie Sheen. “We’re seeing business pretty much equal to a back-to-school peak for us. It’s been pretty impactful for the last two days.”
Restaurants were also jumping on the public euphoria surrounding bin Laden’s death by offering drink and food specials to patrons.
Seattle-based coffee house, Candi Shack, is offering cups of java for $1 as their “Osama bin Laden Shot In The Dark” special.
PeopleDeals offers its spin on group buying
It appears there’s no end to the number of startups the group-buying space can contain. The latest entrant offering a better mousetrap is PeopleDeals, which allows small and medium-sized businesses to create deals that increase in value the more they’re shared across social networks.
Whereas Groupon-type deals are basically a two-for-one model that doesn’t change, PeopleDeals makes the price cheaper after a certain number of participants share the virtual coupon across social platforms such as Facebook and Twitter. To illustrate, a pizza joint could offer an online deal for 50 cents off a slice, then as soon as it’s shared with another person it increases to 60 cents and then to 70 cents after it’s shared five more times, up to a maximum of $1 when 20 or more people share it.
“The key is the business owner decides. At any given time they can make it go from 50 cents to $5, or from 50 cents to 70 cents,” said Darin Myman, the CEO of Red Bank, New Jersey-based social network PeopleString Corporation (PLPE.OB), which launched PeopleDeals last week. “When they (customers) share it with their friends and their friends share it they’re becoming your new social media.”
PeopleString, which Myman said originally raised $500,000 from friends and family when it launched two years ago, began trading on the secondary market in January, which “allowed us to get into the market in a timely fashion.” He added the company now has 1,100 sales reps, a million users and is already profitable.
Myman said PeopleDeals is a more cost-effective way for small businesses to use social coupons, as it charges merchants a subscription fee of $80 a month or $649 a year that lets them run a maximum of 10 deals simultaneously (they are charged more for each additional deal above 10). A typical Groupon deal for a $25 coupon that nets them $50 worth of food, ends up costing the merchant $12.50. Should the deal explode in popularity, the business owner is able to stop it immediately or keep increasing the discount.
“One thing that we capitalize on is the loyal customers spreading your word. Hey look, I go here, help me save more, but you could save more also – it’s a team sport,” said Myman, noting PeopleDeals should be available on Android smartphones at some point this week and eventually on iPhone and BlackBerry devices. “I think we disrupt the industry for both the traditional Valpaks and clipper magazines out there and also the new guys like the Groupons and the Living Socials.”
Just found out about PeopleDeals moments ago, Groupon is not my favorite anymore http://www.peoplestringsignup.net
Small firm produces royal wedding comic
Many Americans can’t seem to get enough of the royal wedding. That’s good news for Darren Davis, president of Bluewater Productions, an independent producer of comic books with a celebrity bent.
This week his Vancouver, Washington firm is releasing both a comic book and graphic novel of the royal romance of Britain’s Prince William and bride Kate Middleton.
“In a weird way, I wanted to create my own memorabilia,” said Davis, 42, whose 10-year-old company has produced biographies of famous personalities ranging from Ellen DeGeneres to Hillary Clinton and Glen Beck. “I watched Princess Diana get married.”
Bluewater’s 32-page comic will retail for $3.99, while the longer, 40-page graphic novel will sell for $7.99. They will be sold in comic-book stores throughout the U.S., as well as mainstream book retailers like Barnes & Noble – even such unlikely outlets as Jo-Ann Fabrics and Crafts.
“There are people who are collecting royal memorabilia; parents buying these for their kids,” he said. “There are also people buying them because they want to collect non-fiction comics.”
Davis expects to sell at least 25,000 copies of each version. His most popular comic book yet was a biography of Justin Bieber, which sold 65,000 copies and was available on shelves at Wal-Mart.
Already Bluewater is planning a second printing of “The Royals: Prince William & Kate Middleton.”
Scoutmob tries to outdeal Groupon
Despite Groupon’s virtual stranglehold on the group-buying space, David Payne thinks it’s vulnerable.
The co-founder of rival startup Scoutmob said Groupon’s margins aren’t sustainable and feels he has a better solution for deal-crazy consumers and businesses.
“When people look at this space they see it as a zero-sum game,” said Payne, who has heard all the naysayers since launching his Atlanta-based company last year. “They see it as Groupon’s raised a billion dollars in private capital and some (other) companies have raised one, or ten or twenty (million)… how can they compete?”
Payne said the group-buying, or “local,” space is large enough to accommodate newcomers such as Scoutmob, DailyCandy, Gilt City, SCVNGR, GroupPrice and others. He added that Scoutmob is part of this “next wave” of deal sites that are following in Groupon’s oversized footsteps and changing the business model to better suit their clients.
“I think what’s happening is that Groupon started allowing local merchants to really monetize and drive traffic in a measurable way and that was a baby step into something much larger,” said Payne, whose service uses Groupon-type deals, but makes them free to consumers and charges business owners $2 per converted customer, compared to the 50-percent cut taken by Groupon (on a typical $25-for-$50-worth-of-food coupon, Groupon pockets $12.50).
Scoutmob works primarily as a free mobile app on an iPhone or Android device. Users scan deals by city (currently available in Atlanta, New York and San Francisco) or neighborhood and then redeem the virtual coupon when they arrive at the business, just as they would do at a bar using Foursquare. An invoice is issued to the business for every confirmed check-in.
Its 500,000 users pale in comparison with Groupon’s 70 million or with Living Social’s 26 million, but Payne said Scoutmob is at least doubling its user base every six months and projects hitting 1.5 million by year end.
Deal site like this are popping up everywhere! In my opinion it’s a good thing because it may mean that one of them will offer a deal closer to where I live…
You see, I thought for a lon time I was missing the Groupon boat because I live too far away from town. But after doing a little research, I found http://steals4all.com a site that gathers all the daily NATIONAL Groupon deals available to buy, regardless of where you live.
Now I can get an exhausted list of national deals that I can buy. Now I just hope one day these types of sites will venture off into my little community.
PixSpree lets you dress like a Kardashian
When Joshua Lopour’s girlfriend spent an hour online searching for a dress she saw worn by a celebrity, he thought there had to be an easier way.
“That was our ‘a-ha’ moment; that’s when we said people need this,” said Lopour, who created Orange County, California-based PixSpree, a software tool that allows users to scroll over a photo of a star and instantly find out what they’re wearing, how much it costs and where to buy it. “It’s basically a roadmap of saying you can go find this here, you can go buy this here. You don’t have to sit there and spend an hour of your valuable time trying to find something; why don’t we just tell you where to get it.”
Lopour is not a programmer, but spent 10 years working in entertainment news, predominantly as a television producer for CBS where he worked closely with a number of celebrity bloggers and photographers. After enlisting friends to design the code, something Lopour said took a couple months to complete, PixSpree struck deals with a handfull of popular Hollywood bloggers, including Perez Hilton, and photo agencies such as Fame Pictures and Pacific Coast News, among others.
“I think early on we knew that being in the celebrity field was a win-win,” said Lopour, adding when he was in TV news the first question they often asked stars was about what they were wearing. “We knew people were interested in that kind of information.”
Photo publishers download PixSpree’s JavaScript plug-in that automatically embeds their code on the photos, displaying a “Shop” logo at the bottom of the pic that opens a pop-up window when users click on it. On a Kim Kardashian photo, the pop-up window shows the cost of her dress ($168), purse ($269) and even her fake eyelashes ($15).
“We don’t want to be in your face. We don’t want to be obtrusive. We don’t want to ruin the experience that a user has already experienced, so what we offer is something in addition to it,” Lopour said, adding that PixSpree takes a percentage of the ads served on the partner content sites it works with.
PixSpree didn’t have a problem finding funding, securing angel investment just two weeks after launching in the summer of 2010. Lopour said the money came from his mother’s friend, Klaas Lameijer, a Dutch investor who moved to Los Angeles two years ago.
Entrepreneur trades bestsellers for bracelets
– Melinda F. Emerson, known as the SmallBizLady, is an entrepreneur, professional speaker, small business coach and the author of “Become Your Own Boss in 12 Months“. In 2010, Forbes magazine named her as one of the Top 20 Women for Entrepreneurs to Follow on Twitter. This article originally appeared on Second Act. –
Until three years ago, Janet Hill Talbert worked as a vice president and executive editor at a major New York publishing house. It was challenging work, and Talbert enjoyed nurturing her writers, including many bestselling authors.
But the stress of the job took its toll, and she started making jewelry as a way to unwind after hectic days.
“I needed to make something that was my own,” Talbert says, “since I spent my days helping authors with their creative endeavors.”
At 45, after more than two decades working her way up from editorial assistant to top editor at the Doubleday/Broadway Publishing Group, Talbert walked away from her high-powered career. She is now a full-time jewelry designer and entrepreneur at her own company, On This Rock.
Talbert works with sterling silver, bronze and gemstones; her pieces often feature inspiring verses. “We are living in challenging times,” she recently told an interviewer. “And it’s my prayer that people will feel comforted, encouraged and inspired by the jewelry.”
Ms. Rabiner,
I enjoyed reading your post and was pleasantly surprised to read that consumers still shop at locally owned, independent retailers. The links and statistics provided were especially informative such as how you stated, “in a small business survey, ninety-three percent of respondents believe that it’s important to support local small businesses.” I was even more surprised that consumers spend about one third of their monthly discretionary income at these stores. I agree that these independent retailers’ main advantages over large retail chains are friendly employees and product knowledge. There’s a book, The Loyalty Effects (a Harvard Business School Publishing) that reiterated your point and showed successful companies in any field of enterprise had one common trait—they had low employee turnover rates. Additionally, I think the ability for smaller independent stores to cross-train employees is another significant advantage over large retail chains that have employees specialized in departments. From a consumer standpoint, you want to be able to walk in the store and ask anyone in there for the help you need rather than having to be directed to the right person. An even better situation is walking in a store and knowing the person working inside on a first-name basis. This level of familiarity and comfort provides a certain amount of loyalty and trust that can often supersede lower prices. What’s your view on cross-training vs. specialization of employees?
While, these small stores have certain advantages, I also think it’s still very challenging for local owned stores to compete with the convenience level of megastores like Wal-Mart and Target where a customer can buy all their desired products (clothes, food, electronics, and more) at one store. How do you think small retail stores can compete with the convenience levels that Wal-Mart and Target stores provide, especially as they continue to expand and become even more popular? Large retail chains also have much more resources in learning about their consumers. For example, are you aware of the checkout scanners and data-mining software that provides retailers with insights into local preferences and buying behaviors? I think these types of consumer research tools would be very beneficial and is becoming necessary for any sized retail chain, large or small.