At events all over the country, neighbors who want their money to stay local are swarming mom-and-pop shops.
Saturday was a typical one in Brooklyn: the sidewalk crowded with fashionably dressed people chatting in the spring sunshine, discovering friends in common and business connections.
But these people weren’t waiting for brunch at the latest hot local eatery. They had shown up to participate in a “cash mob,” an event to support local businesses that got started last year in Buffalo and Cleveland and has since spread across the country. The first National Cash Mob Day happened on March 24.
Here’s the idea, inspired by the flash mob phenomenon: Put out the word on Facebook, Twitter, and other social media telling people where to meet and when. Then take the assembled group to a local store, where attendees can show their support by buying stuff. The business owner gets a financial boost and some publicity, and the cash mob participants get to feel good about where their money is going.
The Brooklyn event targeted a year-old shop called By Brooklyn, which sells only merchandise made in the borough. It was organized by Amy Cortese, author of the book Locavesting: The Revolution in Local Investing and How to Profit from It, along with the folks from Smallknot, a startup “social lending platform” that aims to help people invest in their own communities. About 30 people showed up, crowding the small storefront and waiting in line to purchase beef jerky, handmade notebooks, and a variety of other merchandise.
Cortese says she became interested in the idea of keeping investment local after she saw her Manhattan neighborhood – the Upper West Side – undergo a sad transformation. “I watched, appalled, as all our local merchants closed up and it became this soulless mall,” she says. The cash mob, says Cortese, makes a statement about a neighborhood’s vision of itself. Despite gentrification and rising rents, the shops in this part of town remain mostly small and locally owned. “This is just a way to say, we want it to stay that way,” she says. “We have a lot of fun, but we also have a serious message.”
Most of the participants had heard about the cash mob through friends, on Facebook, or on Meetup. And not all of them typically shop on principle rather than price.
“I’m usually really stingy,” says a young woman who gave her name only as Rachel. She was carrying a gift-wrapped bag of sea-salt caramels. “I’m hesitant to buy at stores like this because they’re expensive. But it seems like a nice thing to do.”
Which raises the question: Are cash mobs anything more than a well-meaning gesture that generates nice media coverage? (It seemed like half the people at By Brooklyn had notebooks and cameras.)
For By Brooklyn’s owner, Gaia DiLoreto, the answer is yes. “It was very uplifting,” says DiLoreto, a self-described “recovering finance robot” who left corporate life at the height of the economic crisis to start her own business. “It’s an incredible affirmation of what I’m doing, that so many people believe in what I believe in.”
DiLoreto estimated that the cash mob just about doubled the business she would have gotten on a typical Saturday. More importantly, “people walked into the store who have never been in my store before.”
For her, the cash mob is emblematic of a new type of business model that she sees taking root everywhere around her. Starting something new in this economy has been tough, but DiLoreto says the support from like-minded people has been "overwhelming." Ideas like "locavesting" may not conform to traditional economic thinking, but that doesn’t bother her. “It’s happening,” she says. “Whether it works out on economists’ worksheets or not. I see it everywhere.” If she's right, maybe you'll see the effects on a neighborhood near you.