Christmas reward givers need their cash to matter
Customer Tamara Jenkins tries on a hat with Meeka Robinson Davis, owner of One-Of-A-Kind Hats, as Davis’ daughter Chrstiana Davis watches in the store in the Windsor Hills neighborhood of Los Angeles, California on November 24, 2020.
Patrick T. Fallon | AFP | Getty Images
Vacation shoppers aren’t just looking for low prices and unique gifts. Many want their money to matter.
This year the coronavirus pandemic has hit small businesses, and the assassination of George Floyd put racial inequalities in a harsh light. The Result: Almost 60% of consumers said they are likely or highly likely to be shopping in neighborhood stores and local retailers this Christmas season to help the local economy. This was found in a survey conducted by Accenture in late August and August of more than 1,500 US consumers in September. Roughly the same percentage said they are likely or most likely to purchase more local products this year.
Consumers want to support companies that also reflect their values. About 4 in 10 respondents said they plan to shop at minority owned companies, and the same number said they’ll shop at retailers who support the Black Lives Matter movement.
“People work really, really, really hard for the money they make, and when they give that to a company, they want to make sure that the company is really, really hard working to create the kind of world they live want in, “said Aurora James, founder of the 15 Percent Promise. “If you spend a dollar anywhere, you are voting to keep this thing going – especially in this pandemic world where so many companies can no longer exist. Every single dollar you spend really counts.”
Large retailers have focused on this and responded by supporting small businesses and selling more of their products. Lowe’s has made millions in grants to small and minority-owned businesses and launched a pitching competition to identify outstanding entrepreneurs from diverse backgrounds. Macy’s and Williams Sonoma’s West Elm has committed at least 15% of their shelf space to black-owned company products. And Nordstrom recently added brands such as Baby Tress and Bomba Curls to its beauty division.
Other companies donate for social causes. The start-up AllBirds for sustainable sneakers, for example, raised the prices on Black Friday by USD 1 in order to donate to a climate fund founded by activist Greta Thunberg. All purchases are matched against an additional US dollar.
“This time of year is synonymous with mass consumption and throwaway culture,” Allbirds co-founder Tim Brown told CNBC in an interview. “We’re trying to make a statement that this can be done differently.”
Kendra Scott, a jewelry brand sold by major retailers such as Neiman Marcus, Nordstrom and Bloomingdale’s, introduced a range of bracelets for charity. Half of the proceeds will go to Feeding America, which feeds children who are unable to get meals at school during the pandemic.
Over the next year, Lowe plans to bring more than 400 products from entrepreneurs to its stores or website. The hardware store donated $ 30 million in grants to minority businesses and $ 25 million to small business grants in rural communities. These troubled businesses include plumbers, electricians, and other home professionals who buy supplies from hardware stores but lost their businesses during the pandemic.
The hardware store is run by Marvin Ellison, one of the few black CEOs on the Fortune 500. In an interview with CNBC in May, he said he was amazed at the spate of grant applications the company has received.
Jeweler Kendra Scott donates half of the proceeds of his Everlyne bracelet to Feeding America.
Racial Justice as “Really Good Business”
James, the founder of the 15 percent pledge and a Brooklyn-based entrepreneur, said the pandemic had increased consumer desire to “shop small” – whether from a corner shop or discovering a local product Founder at a large retailer.
“We want to make gifts that people on both sides are comfortable with,” she said. “When I’m at the checkout, I’d like to be able to give a gift that doesn’t just go to the person I’m giving it to, but also to the small business I bought it from.”
The 36-year-old entrepreneur wrote an Instagram post that went viral following the George Floyd protests, urging companies to use at least 15% of their shelves for products from black-owned companies to reflect the makeup of the U.S. population.
Nine companies, including well-known brands like Macy’s, Sephora and Rent the Runway, have since signed the 15 percent promise.
Photo: Grace Miller
James said she pushed big corporations to help because she was worried about the impact of the pandemic on black-owned companies. About 41% of black-owned businesses across the country closed between February and April, according to a study by the University of California at Santa Cruz. Over the same period, only 17% of white companies closed, the study found.
Consumer support for small businesses this vacation could determine if they can keep their doors open, she said. “Walmart doesn’t really need your help this holiday season, but black-owned small businesses across America really do.”
Some shoppers will do this on Saturday, a day that has come to be known as Small Business Saturday. The shopping event that American Express launched a decade ago is encouraging shoppers to spend money in their communities.
When large companies use weight for social causes, they tend to see an benefit to their bottom line as well, as these points of view resonate with consumers.
“Corporate America tends to become blind to some of these things,” she said. “But I’ve always known that it’s not only right to be fair and sustainable, but also to do really good business.”
She said she knows the difference a large retailer can make firsthand. About seven years ago, Nordstrom presented a collection by Brother Vellies, the luxury brand she founded that sources shoes and handbags from craftsmen around the world. The company gave their first class real estate: seven storefronts in cities across the country.
“It was a big deal for me,” she said. “It has absolutely changed my business.”
– CNBC’s Lauren Thomas contributed to this report.