Cash Mobs: Here to Stay or Passing Fad?

As small businesses struggle to keep up with an increasingly competitive retail environment, “cash mobs” have emerged as one ingenious response. The phenomenon is modeled off of the flash mob concept, organizing groups of local shoppers who agree to descend on one deserving business for a few hours of spending. Members of these so-called “mobs” each spend an average of $20, boosting sales and engaging the community in the process. As the movement gains momentum and draws attention to the struggles of operating a small retail business, the question now is whether cash mobs are a new way of shopping or simply a passing fad.

Last month shoppers around the world celebrated the first International Cash Mob day – an event estimated to have gathered 200 mobs in the U.S. and Europe. Small business owners are positive about visits from cash mobs, and some even report sales equivalent to a full day of pre-Christmas shopping. At a recent cash mob gathering in Long Island, NY, “mobsters” spent $2, 800 at a local gift store. While these events do have a significant effect on a small retailer’s bottom line, the benefits are short-lived.

The realities of today’s retail world mean that cash mobs are likely just a passing fad. While a cash mob visit may be enough to rescue a business in the short-term, small retailers and shoppers alike are susceptible to the same set of economic difficulties – high gas prices, inflation, and unemployment, to name a few. All of these factors reduce the viability of the cash mob, instead encouraging shopping trends that really are here to stay. These trends include a reliance on discount shopping and e-commerce, reflecting the fact that most consumers want the lowest price they can find for a product. This emphasis on discounts and promotions gives the upper-hand to large national retailers—businesses that can better adjust to the discount-savvy shopper.

Despite these trends, cash mobs are a welcome addition to the shopping landscape. For now, these groups are benefitting small businesses, and perhaps more importantly, raising awareness of just how difficult it is to operate an independent retail store.

What are your predictions for the fate of the cash mob movement?