How Small Businesses Can Maintain Momentum in the Post-holiday Season
At the start of the season, the Intuit QuickBooks Holiday Shopping Survey 2022 showed that consumers planned to spend nearly half their shopping budget at small businesses and small business owners were looking forward to what the holidays season would hold. However, as much as consumers said they wanted to shop small, growing concerns about the possibility of product shortages, higher shipping costs and longer delivery times posed a serious threat.
Still, despite fear of losing customers to large, traditional retailers, as the holiday shopping season comes to a close, new data from Intuit QuickBooks finds that consumers are holding true on their intent to shop small.
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Shilpa Reddy, vice president and general manager of the QuickBooks commerce segment at Intuit, said the company’s research found that at the top of the holiday shopping season, more than 80 percent of consumers planned to maintain or increase spending at small businesses throughout the holiday season, with consumers planning to spend 40 percent of their total holiday budgets at small businesses.
“It’s an $88 billion opportunity,” Reddy said, and a “clear indication that consumers are eager to keep small businesses thriving while sourcing unique gifts for their loved ones this season. This [holiday was] also a great opportunity for small businesses nationwide to connect with their local community and generate the revenue that they need.”
Moreover, in comparing this holiday season to recent years, Reddy told WWD that consumer support has remained largely consistent.
“At the onset of the pandemic, we saw a surge of support for small businesses to help them weather the storm,” Reddy said. “This support has been consistent since then, as consumers continue to make a prolonged effort to keep their favorite businesses from shuttering. While inflation is having an impact on spending this year specifically, consumers still feel compelled to allocate budget toward shopping small.”
With rising costs in mind, the company’s recent survey notably uncovered insights into exactly why consumers were planning to spend more with small businesses during the holidays this year. In its survey Intuit found more than half of the consumers surveyed reporting that they like to support the local economy, while 47 percent said they wanted to keep small businesses alive and would miss them if they had to close down.
“We’ve also seen that there is interest from consumers in unique gifts and they turn to their favorite local businesses to find them,” Reddy said. “Another recent report found that 68 percent of American consumers say they prefer to buy unique holiday gifts from small businesses.”
One small business that Reddy said she has seen be particularly successful in connecting with consumers during this time is Grace+Love Candle Co., founded by Jamahl and Natalie Grace.
“Grace+Love Candle Co. prepared early for the holiday season by leaning into market research, analyzing their own data from past seasons and stocking up on inventory in advance,” Reddy said. “Using QuickBooks to manage their finances, Jamahl and Natalie looked at past years and current trends and projected that as much as 30 to 40 percent of their annual revenue would come from holiday sales. Understanding how crucial the holidays and ‘candle season’ would be to their success, Grace+Love Candle Co. proudly participated in Black Friday, Cyber Monday and Small Business Saturday this year, helping them engage consumers during the biggest shopping days of the year.”
According to Natalie and Jamahl, being able to excite existing customers, as well as engage new ones through these promotions, was essential to success.
With 2023 approaching quickly, Reddy shared several strategies that small business owners can tap into to help keep their momentum going.
First, small businesses should consider that “having an omnichannel presence has never been more important, as small businesses need to meet customers where they are. Ninety-seven percent of consumers reported they prefer to shop both in-person and online.”
When establishing an omnichannel strategy, Reddy further advised small businesses to look beyond their own website for opportunities to reach customers. This can include online marketplaces like Amazon, eBay and Etsy or even social platforms with commerce capabilities like Facebook and Instagram. At the same time, digital-only businesses should consider finding moments to join in-person sales events, such as festivals, community pop-ups and farmer’s markets.
Second, Reddy said, small businesses need to be sure to regularly update customers about what items are in stock. Given supply chain challenges, consumers need to know what is available from a store to help avoid frustration during their shopping experience.
Last, she said, businesses should consider offering deals to attract new and existing customers to come to their stores. Also important is to look for ways of streamlining the overall shopping experience for customers once they are there.
Whenever possible, offering discounts or in-store experiences to drive sales will be important, she said, as inflation is making customers more price-sensitive. The company’s research found that 80 percent of consumers will cut spending if the economy continues to worsen. Consumers say they will spend more with small businesses that offer holiday promotions and discounts as well as fast, affordable shipping options and quick and easy checkouts.
Overall, Reddy was positive about the outlook for small businesses, saying that while this year has brought about its own unique set of challenges, from inflation to supply chain issues to the ongoing pandemic, “one thing that has remained constant is the resilience of small businesses and the enthusiasm from consumers to support them.”
