Bloomberg's Businessweek called Small Business Saturday "the loneliest shopping holiday," but American Express is on a crusade to remind consumers that giving small businesses some attention this holiday season is what spurs job creation and a strong economy.
He's been chanting the same mantra for years.
"Small businesses create half of the jobs in the private sector and in fact they’ve created 65 percent of the net new jobs over the past 17 years,"American Express CEO Ken Chenault told CBS in 2011, a year after the Shop Small program started. "So what small businesses is all about is how the individual can help the economy. Because we need to create jobs and if people create independently owned small businesses in their community, they can make a difference."
While the program has created buzz, it hasn't matched the support big-box stores generate on Black Friday or online shops on Cyber Monday. Bloomberg called the comparison "brining a (handmade) knife to a gunfight." Still, Chenault has become somewhat of a house name when it comes to small business promotion, as Amex has touted the concept that started in 2010 by offering small rebates to cardholders who buy from local businesses on the Saturday after Thanksgiving. It's been slow, but the movement is on the move. But it's not certain where, yet.
Chenault believes support for small businesses is growing as a result of the promotional holiday.
"I think what's really incredible is that Small Business Saturday and Shop Small has truly become a movement," Chenault told CBS on Nov. 24. " "We're into our fifth year and the reality is that small businesses are really the backbone of the American economy."
Last year, Small Business Saturday generated $5.7 billion, at least from shoppers who were aware of the holiday, CBS reported. Chenault is so passionate about the holiday he's gone so far as to remind everyone, regardless of how they're paying for purchases to get out and shop local.
"Anyone can make a difference," he said. "This is frankly the one movement that I will tell you is not limited to American Express. You can use any credit card. You can use cash. You can use checks. All we want you to do is to support small businesses in your community."
But even as he took the spotlight off of Amex for a moment during the interview, the CEO got a chance to tout his company for being a leader in small business promotion, and furthermore a company with the "largest integrated payment platform." That starts with better security measures, he said.
"We don't just issue cards. We acquire merchants," Chenault said. "We have all that information in data so our fraud rates are 50 percent less than the industry."
Perhaps he's earned bragging rights as Amex has been named by Fortune Magazine as "one of the world’s 20 most admired companies," and Chenault himself has been named on the list of CEO of its executive fantasy lead in past years. The CBS interview also gave perspective from Google Chairman Eric Schmidt, who once said "Chenault "exemplifies the best leadership that I've ever worked with."
He's got the backing of the industry, now he just needs the backing of consumers and merchants. The CEO wants to remind shoppers that "anyone can make a difference," and to create a real difference in local economy, which inevitably boosts the nation's economy, it takes consumers caring enough to shop close to home. Invoking change is part of his leadership style.
"My favorite quote on leadership comes from Napoleon and I always preface it always saying, I don't want to wind up like him, but I really believe the role of the leader is to define reality and give hope," Chenault told CBS. "We know how difficult it is in the world we operate in today to define reality. But it's not enough to define reality. You've got to come up with strategies and tactics to define hope and that's critical. I think about that every single day."
Amex may have given created a Small Business movement, but it's up to the small businesses themselves and their patrons to keep the retail holiday alive. Take it from the perspective of Small Business Administration Chief Maria Contreras-Sweet who talked with Bloomberg about promoting the holiday in New York City.
"What I like about shopping small is that you get a sense of the uniqueness of the community,” she told Bloomberg while in a shop in Little Italy. Bloomberg's Patrick Clark took a stroll with the SBA chief during her early shopping tour and talked to a few merchants himself.
“I don’t think it’s going to be a big deal one way or another,”Nick Bari, a local restaurant owner told him. “It’s more of a gesture than anything else.”
Restaurants may not have seen much of an impact in the past from the holiday, but this year, the SBA has partnered with the National Restaurant Association to encourage shoppers to dine local, also known as "Dine Small."
"The rest of the responses ranged from skepticism to ignorance," Clark wrote. Some businesses owners laughed at the reporter, others were unaware the holiday even existed. The promotion is still on the newer side for retail concepts, and Amex's partnerships with big players like Facebook and Verizon could spread more awareness. But in the end, Small Business Saturday still needs more than awareness, it needs to translate that awareness into sales.
"Urging consumers to shop small is easy, but the feel-good cause of supporting local business is unlikely to make a sale," Clark said.
So will shoppers go local this year when it comes to holiday shopping and holiday eating? Maybe so, but they may also may do so without knowing they're participating in a movement. There's two challenges Amex still has to overcome: getting people to shop local and realizing why they are.