Despite the fact that consumer spending is predicted to drop by 34% from the previous year, a recent analysis from Intuit QuickBooks highlights the crucial role that Christmas sales have in small businesses success. Based on studies of small companies and American consumers, the 2024 QuickBooks Holiday Shopping Report identifies trends and tactics for negotiating the financial environment over the holiday season.
Spending Due to Inflationary Pressures in Small Businesses
According to the estimate, consumer holiday spending will exceed $211 billion this year, a $85 billion decrease from 2023. Nearly a quarter (23%) of consumers are cutting back on their Christmas spending due to rising prices for necessities like groceries and gas.
It is anticipated that small enterprises, which mainly depend on seasonal earnings, will be affected. This holiday season, shoppers anticipate spending $294 at small companies on average, a 40% decrease from $485 the previous year. 61% of small business owners say that seasonal profits are essential to their success, and they predict that holiday sales will make up 33% of their overall yearly revenue.
Customer loyalty to small businesses is still high in spite of these obstacles. The analysis estimates that 240 million consumers, or 93% of the surveyed shoppers, intend to shop small, which presents small enterprises with a $76 billion income opportunity.
Emotional and Practical Reasons for Shopping Small
Customers identified special deals and emotional ties as the main reasons they shop small. Because they wish to support their communities and entrepreneurial endeavors, nearly half (47%) of respondents stated that they prefer small businesses to larger ones. Finding unique, high-quality presents was cited by 52% of respondents as another important consideration.
Techniques for an Intense Holiday Season
Small firms are taking preemptive steps to adjust to the expected decline in spending:
Early Preparation: More than 40% of small company owners started organizing their holidays in September or earlier, with a particular emphasis on marketing (34%), stockpiling inventory (33%), and organizing sales (33%).
Leveraging Digital Tools: For tailored campaigns, targeted discounts, and improved operations, the report suggests that companies make use of AI and marketing platforms such as QuickBooks and Mailchimp.
Increasing Social Media Presence: 52% of small businesses want to sell on social media this season, indicating that social media sites like Facebook, Instagram, and TikTok are becoming more popular as shopping locations.
According to Joseph Black, director of Product Management, Accounting, and Commerce at Intuit QuickBooks, “Consumers are facing difficult financial constraints and are increasingly looking for flexibility and convenience in how they shop and interact with businesses, as well as deals and offers to offset costs.” But according to our research, 31% of customers intend to spend more at small companies than they have in the past, and consumers want to support small businesses even if they have intentions to spend more sparingly. Business owners should use digital tools to efficiently manage inventory, customize their marketing, post bargains where customers are most likely to search, and use AI-powered solutions to enhance their selling potential and automate daily operations in order to capitalize on this desire to shop small.
Important Dates for Shopping and Inventory Control
With 65% of people planning to shop on Black Friday (November 29) and Cyber Monday (December 2), these two days are predicted to continue to be the most popular shopping days. On the other hand, Small Businesses Saturday (November 30) is also becoming more significant, as 39% of consumers aim to finish their shopping on this day.
To ensure that popular products are adequately stocked for these high-volume purchasing occasions, small businesses are urged to plan their inventory in advance.
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