Nurture Positive Change in Your Own Backyard: The Importance of Small Businesses

August 30, 2012

Groupon’s roots are in social change. The company began as a The Point, an online collective action platform designed to make it easier for people to work together to support social movements. In 2008 when The Point pivoted to collective buying, Groupon was born and soon became known as the fastest-growing company of all-time. When Groupon developed G-Team in 2010, recently rebranded as Groupon Grassroots, it wasn’t a stretch because the concept of collective action to advance social causes is in the company’s DNA.

Groupon activates local participation and strengthens the resilience of neighborhoods and communities. As consumers look to Groupon in order to discover their cities with offers from local merchants, Groupon Grassroots offers them opportunities to discover and support local causes that have a meaningful impact.

Groupon Grassroots has raised more than $3.7 million to fund over 800 projects for local community groups around the world since its inception. These campaigns can be found on alongside with their fundraising ‘deals.’

Groupon Grassroots campaigns use the power of the Groupon platform to activate supports for local causes:

  • Discovery—each week Groupon features an average of 15 cause campaigns on a variety of issues. Each campaign tells a specific story about a community group and what their campaign attempts to achieve.
  • Collaboration—All Grassroots campaigns are activated by a collective tipping point. Campaigns are only funded if they meet the minimum amount required to activate the project, making it safe for people to give because they know their donations will produce tangible results.
  • Local Impact—Groupon Grassroots campaigns allow consumers to have an impact locally, where they can see the change happen and get more involved to support the cause after the campaign is funded.

However, Groupon’s impact story does not end there.

Groupon levels the playing field for the best independent small businesses and offers strong incentives for consumers to buy local. Small businesses are vital to the economic viability of our communities. According to the U.S. Small Business Association, small businesses have contributed 65% of net new jobs over the past 17 years. The Institute for Local Self-Reliance also points out that small businesses are often more dedicated to providing better wages, benefits, and job security than nationally owned chains because primary decision-makers live locally alongside the employees that they hire. Civic Economics states that for every dollar spent with a locally owned small business, independent merchants return 68 cents back to the local economy (compared to 43 cents from a nationally owned chain).

It is clear that locally-owned, small, independent businesses are the hearts of our communities. Who doesn’t love that Main Street feel when you visit your favorite shop that could only exist in this one neighborhood, in this one part of the world, and the owner knows your name? Small businesses pump money through the veins of the community, keeping it healthy, growing, and unique. From the skate shop in San Carlos that runs community programs for youth, to the café in Chicago that has been family-owned and run since the 1980’s, small businesses provide genuine character.

Groupon creates thousands of connections everyday between consumers and merchants—many just around the corner from each other. The greatest value that Groupon gives to its local merchant partners, however, is an opportunity to create new regulars: 91% of daily deal customers say that they have already or plan to return to the merchant again. Through its daily deals, Groupon showcases the hidden gems you might not have found or tried otherwise.

But the vision is even grander. In Groupon’s view of the future, small, local, independent businesses can compete on a level playing field with large chain stores. We hope to be the partner that addresses merchants’ most difficult challenges so well, that business owners can focus their time and passion on perfecting their craft.

The company has already rolled out a suite of products to help business owners operate more effectively. The Merchant Center features an intuitive display of demographics of the purchasers of each Groupon deal, including age, gender, and location information. It also privately shows merchants customer feedback that Groupon has collected following deal redemption, so that merchants can fix customers’ most pressing issues in real time. Groupon Now! helps local merchants advertise discounted excess perishable inventory, essentially allowing small business owners access to dynamic price differentiation and marketing that otherwise would not be available. What’s more, Groupon Scheduler provides an online self-serve system so that staff can concentrate on providing excellent services instead of worrying about logistics.

When local businesses, the heart and soul of our communities, thrive, we all do. Local merchants humanize business relationships and transform communities to make them better places to live. Local leadership, local stakeholders, and local governance give these businesses an incentive to look out for the wellbeing of their consumers and the community at large—because it’s their community too. The future of local commerce is more than keeping dollars circulating locally—it’s about making communities and cities places you want to be for the long-term.

[Editor's note: This article is part of The Role of Business in Shaping the City of Tomorrow report.]