Each year, come the end of November, consumers are tempted with the seemingly never-ending offers surrounding Black Friday, Cyber Monday and Small Business Saturday.
While shoppers are excitedly trawling through the sales, for small business owners, this busy time marks the beginning of one of the most important – and stressful – times of the year: the holiday shopping season.
Seasonal headlines are most often associated with the giants of the industry – from Coca Cola’s ‘Holidays are Coming’ to the John Lewis Christmas ad. However, new research shows that it is actually small businesses that customers turn to for securing all-important gifts for their loved ones.
In a survey recently conducted by Intuit QuickBooks, two-thirds of British consumers said they believe small businesses offer the best gift options, and UK shoppers plan to spend a third of their Christmas budgets at smaller retailers.
Pair this with the fact that they also recognised SMBs for providing the best service and quality, business should be booming this time of year – if it weren’t for the wider economic picture, of course.
Christmas vs. the cost-of-living crisis
Navigating a holiday season while in recession is a complex situation for both customers and business owners. Despite energy prices rising and the weather growing increasingly cold, a majority of UK shoppers plan to spend as much, if not more, this Christmas than they did last year. With an average budget of £671, the average shopper plans to spend 37% of that – £250 – at local, small businesses.
Knowing this, it is not surprising that most small businesses predict they will generate more revenue this holiday season than in 2021, with an estimated revenue of £460,000 per small business between November and January – equivalent to two-thirds of their total annual revenue.
But to make all this spending possible, consumers have had to think carefully about their approach to Christmas budgeting. More than three-quarters of UK shoppers have already made the necessary cutbacks in order to be able to maintain their Christmas shopping budget for this year, but if the economy continues on a downward slope, then just as many consumers will cut their holiday spending. Moreover, a third of UK shoppers already say they plan to use debt to fund their Christmas.
Unwrapping holiday success
While all these spending forecasts paint an optimistic picture for SMBs this festive season, it does not take away from the real challenges they are also facing – from hiring difficulties and seasonal worker shortages, to shipping issues and inventory shortfalls.
In order to make the most of this consumer willingness to spend and support their local businesses, there are some key tactics that SMBs can embrace to encourage shoppers – most notably, promoting their online offering.
The ease of online shopping and the accessibility it offers cannot be underestimated, especially when looking at its impact on sales figures.
With the cost-of-living crisis looming over holiday spending decisions, more than three quarters of UK consumers say that rising inflation is pushing them to shop online more. Online, they can more easily peruse the sales and spend time seeking out a good bargain – and this is true for all sizes of business.
The stereotype of small businesses can often be an outdated picture of a small high street store with no online presence. In reality, many now have thriving websites and online sales platforms that consumers flock to for festive shopping. Taking advantage of this will be more important than ever as the recession continues to bite.
As we pass through this challenging time, there are many unknowns people across the country face – from the cost of their next utility bill to their family’s gift budget this festive season. With small business owners not only expecting but also relying on a large uplift in turnover in the festive season – which accounts for a huge proportion of their annual turnover – for many it will be a more stressful time than usual.
But despite the challenges the country faces, the public’s commitment to shopping local and supporting small businesses remains – and we look forward to seeing this dedication on display this Small Business Saturday.
