• Raise Awareness, Boost Sales : Merchants in communities with “buy local” campaigns reported higher holiday sales and greater revenue growth in 2011 compared to independent retailers in areas without such a campaign.
    Raise Awareness, Boost Sales : Merchants in communities with “buy local” campaigns reported higher holiday sales and greater revenue growth in 2011 compared to independent retailers in areas without such a campaign.
  • Average revenue change (2011)
    Average revenue change (2011)
  • Average change in holiday sales (2011)
    Average change in holiday sales (2011)
  • Big Spenders: Amount spent by consumers at independent retailers on Small Business Saturday on Nov. 24, 2012

    Credit: Institute for Local Self REliance's 2012 Independent Business Survey

    Big Spenders: Amount spent by consumers at independent retailers on Small Business Saturday on Nov. 24, 2012
  • Reasons for Shopping Small: Why do consumers support small businesses? Here’s what they said.

    Credit: American Express and National Federation of Independent Business

    Reasons for Shopping Small: Why do consumers support small businesses? Here’s what they said.
Last November, Wind Surf and Sail Pools went all out for Small Business Saturday. They posted “buy one, get one half off” deals on outdoor and decorative items. They put all pool toys on sale for 40 percent off. The Clinton Township, Mich.-based pool firm even offered big ticket deals, like a free water feature or solar heater, on pool purchases made that day.

“I thought if we just put in more effort, it would help everyone,” explains Kathy Duggan, general manager of Wind Surf and Sail, which built more than 160 above-ground and in-ground pools in 2012 and services between 600 and 750 pools annually. 

But foot traffic and sales proved lackluster on that Saturday after Thanksgiving, despite promoting the specials on Wind Surf and Sail’s website, Facebook page, Twitter account, email newsletters to 1,500 people, and outdoor signage. “It wasn’t pulling them in,” Duggan says.

Unfortunately for pool firms, Wind Surf and Sail’s experience is not unique. Consumer interest in “shopping small” may be growing, according to researchers, but independent pool and spa retailers are encountering some unique challenges as they try to find those customers and capitalize on that mindset.

‘Small business’ bust? 

The most well-known “shop small” campaign may be the American Express-sponsored “Small Business Saturday.” Established in 2010, this effort promotes shopping at local merchants on the Saturday after Thanksgiving, between the traditional Black Friday and Cyber Monday shopping days. 

“We were hearing more and more that Main Street retailers were getting lost in the shuffle,” says Scott Krugman, a spokesperson for American Express. “How many small merchants does it take to get the critical mass [that big-box stores and online shopping sites] have? Much more, which is why we provide air cover” and sponsor the annual campaign. 

Independent merchants who want to receive additional marketing tools can register with American Express, but that’s not required to participate. Neither is accepting American Express cards. “Small Business Saturday is for everyone,” Krugman says. “They just need to have an offer” for their customers.

It represents a major opportunity for local retailers to promote the advantages of their business compared to their lower-cost online competitors, which is one of the reasons Wind Sail and Surf signed up for the effort. “Our biggest nemesis is the Internet,” says Duggan. “Every single day, we hear, ‘I can get that online.’ Can the computer come out and fix your pool? But shame on us if we don’t try.”

And for many small merchants, Small Business Saturday works. Consumers spent $5.5 billion with independent merchants on that day in 2012, according to American Express.

In Humble, Texas, Fox Family Pools promised customers who spent at least $25 on that day a free gift of a skimmer net or brush. Between 10 and 15 customers asked for the offer, according to office manager Melissa Waltman, which represented a significant increase from the previous year, when just a few brought the special discount coupon. 

At other pool firms, though, this “shop small” effort comes at a terrible time of year, when consumers are more focused on ice-skating and holiday gifts than pools and spas. “When we asked our customers what they were buying on Small Business Saturday, not a lot of them said pools and spas,” Krugman acknowledges. 

Small Business Saturday “never really panned out for us,” says Phil Stengel, owner of Doug’s Pool and Spa in Springfield, Mo., which builds between 30 and 50 pools annually. “The ones that buy from you are going to buy from you. You have loyal customers, and you have customers who are looking for the best deal.” 

The price sensitivity can be hard to overcome when a lower price is just a click away. “It seems like anything that’s a major purchase, like equipment, is when people get concerned about the price,” says Jennifer Dorn, manager of Malins Pool and Patio Supply in Chino, Calif., which has also participated in Small Business Saturday. “They buy it online and pay us to install it.”

Making shop local campaigns work

The good news is that “buy local” campaigns can work. Research by the Institute for Local Self-Reliance showed that merchants in places with “buy local” campaigns often report higher holiday sales growth and greater annual revenue growth compared to merchants in communities without “buy local” initiatives. (See “Raise Awareness, Boost Sales” chart.)  

The bad news is that these successful efforts are very different from the typical holiday “shop local” campaigns, according to Stacy Mitchell, senior researcher at the Minneapolis-based Institute and the author of “Big Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses.” 

Rather than a one-day effort by an individual retailer working with a much larger partner or the nearby chamber of commerce, these initiatives were sustained efforts throughout the year by local businesses dedicated to supporting each other through combined marketing and more. “By banding together, local businesses can reach a lot of people inexpensively,” says Mitchell. “The critical thing is that you have to do it in partnership, because if you’re doing it by yourself, you’re just advertising to your existing customer.” 

It’s important to reach new customers, Mitchell says, because despite the currently fashionable nature of “shop local” slogans, there are only so many consumers willing to do that.  “My general conclusion is that probably 25 percent of people only shop at big-box and discount stores, 25 percent mostly shop at local businesses because they are pretty committed to that, and 50 percent of people shop sometimes at local businesses and sometimes at chains, and that’s the group that these campaigns are trying to reach,” she says. “That’s really where the opportunity lies.”

How can independent pool firms promote themselves to these potential customers? Ironically, given the pressure that Internet retailers are placing on the industry, one of the best ways may be online, through the power of social media.

“To me, ‘shop local’ is a brand awareness campaign,” says Pam Vinje, president of Small Screen Producer, a digital marketing firm based in Houston, Texas. That means not focusing on one-day discounts in a ‘shop local’ promotion, but instead using online tools in an ongoing way to connect with customers old and new on the topic of shopping small and why they do it, particularly for their pool and spa needs. 

Such a strategy might include Facebook questions on the reasons for buying local, offering incentives for “checking in” on Foursquare or Facebook, online contests, video testimonials, and perhaps even setting up a small corner of the stop for customers to shoot a photo or short video of themselves at the store to post on the store’s Facebook page and share online with their own friends. 

“It’s about getting your customers to engage with their friends,” says Vinje. “It’s word-of-mouth in digital.”