The Big Economic Argument for Shopping Small this Holiday Season
With Small Business Saturday coming up, here are three reasons why shopping small is better for everyone– yes, even you.
Thanksgiving and Black Friday may look a little (ok, ALOT) different this year, but traditions persist. As we gear up for the much-anticipated Black Friday deals, let’s not forget about the day after Black Friday: Small Business Saturday. The day after Black Friday was christened “Small Business Saturday” in 2011 to bring more holiday shopping to small businesses.
This year it’s more important than ever to support small businesses, especially within our local communities. The pandemic has had a disproportionate impact on small businesses, especially minority and woman-owned small businesses. Just like you’ve been supporting your local restaurants with take-out orders during this unprecedented time, small businesses of all kinds need your help too. We’ve seen more than our share of Seattle favorites permanently close their doors after decades of serving this city, and others have had to take drastic cost-cutting measures just to stay afloat. If you ever needed an excuse to shop, this is it, seriously. American Express reports that 62% of US small businesses said that they need to see consumer spending return to pre-COVID-19 levels by the end of 2020 in order to stay in business.
Small But Mighty
Although it may not always feel like it, small businesses are the definition of “small but mighty.” The vast majority of US businesses are “small businesses”– firms with fewer than 100 workers make up 98.2% of American businesses (firms with fewer than 500 employees make up 99.7%!). If the majority of businesses are small, why do we always seem to choose from the large companies that make up the remaining 0.3%? As consumers, we often get lower prices (and faster shipping times) from big chain stores. But these apparent “wins” come with an economic cost of millions of dollars. Besides the multitude of reasons that shopping small is better for the consumer (creating local jobs, giving back to the community, and more!), when it comes down to the numbers, shopping small is an economic choice that better benefits everyone, including you as the consumer.
Why Shopping Small is the Smart Economic Choice
Any purchase you make has direct, indirect, and induced effects. When we break it down this way, shopping small becomes an easy choice:
When you choose to buy from a small business, your money directly helps that business cover its costs and pay its employees. In other words, when you choose to spend money at a small business, your dollars have a more direct impact on people’s livelihoods. With 47.3% of US workers employed by a small business, the way you spend your money has the power to bring food to someone’s table faster, cover living expenses at a higher wage rate, and directly invest in the people within your local community. Supporting small businesses also means you’re directly investing in your local community. Businesses pay taxes to the city and county that they’re located in–so your dollars go to your local schools, parks, roads, and public service workers.
When the dollars spent at small businesses recirculate within the local economy, those are indirect effects. Local business owners are more likely to buy local services themselves, and independent local businesses go into their local communities to buy the supporting services they need–like architects, designers, contractors, and more–creating local supply chains. Basically, a much larger share of money spent at a small business stays within the local economy, and in turn supports a variety of other businesses and jobs. By creating local supply chains, we help create a more sustainable, more equitable system of consumption.
When employees and business owners spend their money as consumers within the local economy, we see induced effects. Consumer spending creates a multiplier effect– on average, 48% of each purchase at local independent businesses is recirculated locally, compared to less than 14% of purchases at chain stores. This means that independent retailers return more than three times as much money per dollar of sales into the local economy than big chain competitors. By spending at small businesses, you’re not just supporting the business owner and their employees, but putting your dollars into making a larger impact on your community.
Vote With Your Dollars and Shop Small
Shopping small and local is a simple way to create a tremendous effect. Spending your dollars locally helps perpetuate and strengthen a system that better benefits everyone. As we approach the holiday season this year, think about how you are voting with your dollars. Your dollars mean so much more to a small business that needs to make sales in order to keep their business afloat, keep their lease, and even continue providing benefits to their employees whom they may have had to furlough. Have beloved local businesses gone under because of the pandemic? How can you prevent others from failing? This Small Business Saturday, it’s never been easier (or more important) to be an active participant in your community and to do your part to make a big change.
At Armoire, we strive to promote woman-owned businesses, many of which are small businesses like we are. When we work together and lift each other up, everyone succeeds! So let’s help our fellow small business Boss Ladies out. Recently we’ve spotlighted partners like Boma Jewelry, The OULA Company, Zeraffa, This Same Sky, and Tribe Alive. Check out our rental line-up for more amazing and sustainably-minded small businesses.
Written by Anya Edelstein for Armoire.