Are cash mobs a ‘waste of time and money’?

    Sales have dropped in recent years for Newtown Hardware House in Bucks County. Over the weekend, in an attempt to lend a hand, a mob of customers flooded the store — but is this approach enough to keep a struggling business open?

    Sales have dropped in recent years for Newtown Hardware House in Bucks County (106 S. State Street). Over the weekend, in an attempt to lend a hand, a “cash mob” of about 100 customers flooded the store, WHYY’s Elizabeth Fiedler reported.

    Cash mobs (inspired by flash mobs) attempt to prop up struggling small businesses by organizing a large group of people to briefly overtake it and make purchases.

    They gave owner David Callahan one of his best days in years, but is it enough to keep a struggling business open? Or is it — as Ira Davidson, director of the Small Business Development Center at Pace University, says — just a well-meaning but ineffective attempt for “starry-eyed liberals” to do someone a favor?

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    Callahan said he recognized most of the mob customers and that sales were still up the next day, which seems to be good news. Whether it will stretch into a long-term boost in sales, however, is yet to be seen.

    This reminds me of a NewsWorks story from January about a Mt. Airy grocery store that was saved by its customers. Amy Kunkle, owner of Food for All Market (7127 Germantown Ave.), nearly sunk her business after a Groupon deal lost her nearly $10,000. A couple dozen customers pooled their resources to loan Kunkle the money to stay open.

    “In my mind, I was getting the word out about my store to thousands of people,” said Kunkle, “but what really happened is that these people were in it for the deal and not necessarily to be return customers.”

    In other words, the short-term desire to feel virtuous by saving some money outweighed the long-term need to support the local business.

    Could it be a similar mentality with cash mobs — going for the short-term virtue of a charity purchase? It depends on whether there’s something about the experience that will entice them to come back, long after the pull of that social warm fuzzy fades.

    Lucky for Kunkle (and people in Northwest Philly with food allergies), the actions of loyal customers actually did save her. Loyal customers. Not exactly the same thing as a cash mob, but maybe a better model. Cash mobs might have a chance to sustain a lift to the bottom line if there’s a way to keep up momentum. How likely is this to happen?

    Give us your thoughts.

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