Biz Features

Cash Mobs: Will They Save American Small Business?

by . February 24th, 2012

Cash mobs are perhaps one of the more interesting things to happen to small businesses in the United States in the past year. The idea is so new that as of writing, no one has made a Wikipedia page on it. Urbandictionary.com on the other hand, is more up-to-date. For who didn’t bother to click that link, you can think of cash mobs as “flash mobs” with a socio-economic slant. Cash mobs semi-spontaneously organize people into spending money in small businesses in their community. These groups often target local businesses that have fallen prey to major retail chains moving into their home towns.

Miramichi Cash Mob
Cash Mob in Miramichi, New Brunswick. Cash mobs have gone international and events have been staged worldwide

 

In towns all over the United States, you’ll find the debris of modern urbanization. Run-down main streets with shuttered storefronts and the odd business eking out a fairly meager existence. Then a few miles away, you’ll see a modern strip-mall or shopping center, packed to the gills with everything a shopper might possibly need, often at cut-rate prices.

For better or for worse, the strip-mall effect (or  “Wal-Mart Effect” as investigative reporter Charles Fishman called it in his book) has undoubtedly made a huge impact on everyone in the United States.

The convenience of having everything you could possibly need in one place with generous parking (and possibly a Starbucks), was unprecedented for many consumers. For small businesses in small town America, the results were mostly devastating.

Cash Mob in Chagrin Falls, Ohio
Jan. 21, 2012, Rob Schwind shovels the sidewalk in front of the Chagrin Hardware in Chagrin Falls, Ohio. The Shutts family, which has owned the hardware for the last 72 years, was preparing for a community-driven “Cash Mob” of the store to happen that day. (AP Photo/Amy Sancetta) AP

 

Of course, not everyone appreciated what Wal-Mart and Target did to the underlying social fabric held together by those small local businesses. The “Buy Local” movement has been around for decades, but only with the maturity of online Social Media with platforms such as Facebook, Reddit, and Twitter has it been possible for any kind of mass action like Cash Mobs to be done quickly.

We’ll have to give credit to blogger Chris Smith, a 37-year old engineer for Oracle, who organized the first ever cash mob back in August 2011 to support a wine shop in Buffalo, New York. Since then, hundreds of groups in the United States and Canada (as well as in isolated pockets elsewhere in the world) have organized their own cash mobs. This site gives you details on how to start your own cash mob. A quick search on Twitter will let you connect with several groups dedicated to the idea.

If your business is lucky enough to be chosen by a cash mob, you’re in luck. Businesses targeted by cash mobs have typically seen not just a short term boost in sales (obviously), but a lot of steady repeat patronage as well.

 

What Do Cash Mobs Mean For Small Business?

First, online Social Media makes a huge difference when it comes to reaching out to your customers. Before Facebook and Twitter made it all so easy to get in touch with people businesses that mattered to you, big retail chains were able to easily leverage their size to get their name “out there”. Now, it’s possible to do almost as much with far fewer resources. If one blogger like Chris Smith can use Social Media make that much of a difference, then it’s no stretch of the imagination that a small business can use the same to some positive effect. At the very least, it’ll get you found more easily.

San Diego Cash Mob
San Diego Cash Mob, c/o constructbirmingham.wordpress.com

 

Next, businesses that fail to exceed or satisfy expectations or have a faulty model will never succeed in the long term, no matter how many cash mobs you throw at it. And the groups that organize the cash mobs would probably not pick those businesses anyway.

Cash mobs are not the “next big thing” that will change the fundamentals of how you run your business.  People who value low prices over everything else will still go to the major retail chains. Social media and cash mobs are actually not much more than tech-enabled super-targeted marketing, matching local businesses with consumers who feel the welfare of their community matters much more than lower prices.

Cash mobs by themselves will not save American Small Business. The things that made them possible just might do it, though.

 

 

 

ABOUT THE AUTHOR:

Arthur Piccio manages YouTheEntrepreneur and has managed content for major players in the online printing industry. He was previously BizSugar's contributor of the week. His work has appeared multiple times on The New York Times' You're the Boss Small Business Blog. He enjoys guitar maintenance and reading up on history and psychology in his spare time.

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