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Small Gains for Small Business

Small business owners aren’t optimistic about the future and they said so loud and clear this past July. The National Federation of Independent Business reports a larger than usual decline in their Optimism Index after what was already a downward spiral going back three months prior.

Given the state of the economy, their dim view isn’t surprising but comScore has some good news to share. Over the last three quarters, small retailers have taken home a larger piece of the e-commerce pie.


Not a staggering gain, but at this point, any gain is good news and this is the first good news since they had a 37.2% share back in Q4 2009.

The top 25 retailers have a lot of advantages over the mom and pop shop. They move more goods so they can afford to offer lower prices and advertise more. What they don’t have is personalized service and that’s what’s keeping the small retailer afloat.

For example. I’ve recently returned to scrapbooking. Three years ago, there were four scrapbook stores within twenty minutes of my house. They’re all gone. So I head to the big box store – Michaels – where I was promptly overwhelmed. Then I found several small retailers online who put together kits. They match the paper to the stickers to the embellishments and I’m in. Even if I have to pay a little more because they did the hard work for me.

I also wonder how the demise of several large chains is affecting the balance between the Top 25 and the small retailer. Tall Mouse, the other large craft chain in my area is out of business leaving Michaels with no competition. Borders is nearly gone, leaving Barnes and Noble as the only big box option. There are a dozen large storefronts standing empty in my area. Mervyns, Circuit City, Blockbuster, you may not be mourning the loss but each of those stores represents twenty to fifty people that are now out of work. Those people now don’t have the money to shop, the remaining stores lose money and so on and so on.

The Sunday LA Times had an article about a small shingle business who is in the black for the first time in a long time. They have so much business, the owner needs to hire more help but he’s afraid to. The past has taught him that this upswing might be short-lived, so he struggles to get it all done shorthanded, which could result in bad customer service and, in turn, a loss of customers. It’s a living example of the Optimism Index vs comScore’s uplifting data. How do we get around that? How about a little Laws of Attraction. Believe that you’ll always have as much money as you need and the universe will make it so, but having a good marketing plan doesn’t hurt either.