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In times of economic duress it may not be fiscally prudent to market quality of life over low cost. Fortunately for marketer Cinda Baxter, founder of The 3/50 Project, local purchases provide a well-documented return on investment.
Launched in March 2009, The 3/50 Project was “born out of frustration,” explains Baxter, a retailer turned consultant who objected to a week‘s worth of “dark and depressing” media reports on the economy, including a manifest by Oprah Winfrey directing consumers to halt spending of discretionary income. Baxter‘s subsequent blog touting the benefits to community of spending in locally-owned businesses prompted consumers to “save the economy three stores at a time.” The idea was simple: spend fifty dollars total in three local, independent businesses each month rather than purchasing those same goods from national chains.
Baxter created a flyer explaining the 3/50 impetus and posted it so businesses could print the promotion at their own desktops and distribute to consumers. The response to Baxter’s initial one-page Web-site created one Sunday in March 2009 was over three hundred emails asking, “What else have you got?,” she explains. A subsequent link provides registered users with options for 3/50 Web-site graphics, window banners and ads to run in local theaters.
Baxter, who ran a stationary and gift specialty store, Details, Ink, in Minneapolis until the landlord defaulted on the lease, confides that it is a “challenge for small businesses” to disguise desperation and “tell a customer ‘I need you to spend money.” Not so difficult is to demonstrate to consumers that investment in local businesses is an investment in community. And Baxter has calculated the math: for every $100 spent in a locally, independent store, $68 dollars returns to the community through taxes, payroll, and various expenditures, she explains. That same $100 spent in a national chain yields only $43 locally, while the return on investment to a community for an online purchase is zero (unless it is via the Web-site of an independent local retailer).
“The last two years have been rough for independent retail,” says Baxter, who closed her own store two years ago on New Year’s Eve and has been overseeing The 3/50 Project pro bono while running her own consulting business, RetailSpeaks. “The 3/50 mission is to remind consumers they hold the fate in the livelihood of their community. What happens to that dollar bill after it leaves their hand? (The 3/50 concept) is so simple it resonates with people.”
The 3/50 idea resonated immediately with Darien, CT, retailer Bill Jensen, owner of Darien Toy Box, a 1,000-square-foot specialty store opened about one and one-half years ago.
“If you go across the street (to dine) at a franchise restaurant, that money goes to the franchise headquarters,” says Jensen, whose store offers toys for children up to age 10. “Communities need local merchants of local stores to grow. They give towns that unique feeling.” Jensen has placed The 3/50 Project’s logo prominently on the front page of his store’s Web-site and included the project’s Web-site address on the back of his business cards.
“It is an educational process,” says Jensen, who cannot yet quantify the impact in revenues on his business. “The idea is picking up and more people are aware of it. I am a specialty toy store. I can’t compete with the big boxes, especially with inventory. Most specialty toy stores have about the same price (as national chains). Our product is very different, with unique (items) made in the U.S. or made in England, hand-made crafted (products) you are not going to find in a big box.”
The 3/50 Project has prompted Jensen to begin “cross marketing” with other local merchants: he began stocking bracelets from a specialty retailer located two stores from his, while that retailer will begin merchandising a product from the Darien Toy Box.
Baxter says an estimated 15,200 businesses have signed up on The 3/50 Project’s Web-site, reiterating that this includes not only retailers, but restaurants, movie theaters and even dry cleaning stores. She does not know the number of retailers, or specifically children’s retailers that have registered with the site, although she claims there are “a lot of children’s clothing stores and a lot of toy stores.”
A 3/50 Facebook page has also been created and consumers are “connecting with business owners,“ Baxter says. “Long lost customers are coming back and there are stories about new customers coming in.”
Baxter says she does not “collect data” and has “no way to track data“ regarding sales gains by local merchants. The next step, she adds, is to bring in a corporate sponsor and “monetize The 3/50 Project” and create “two levels of membership.”
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