The holidays are big business. That’s not going to come as a shock to anybody — but, just how important are they to America’s economy? The latest figures from Adobe Analytics show that from November - December 2023, Americans spent more than $222 billion (yes, billion!) while shopping online. That activity was largely driven by an increase in total purchases.
Translation: Americans want to spend during the holiday season. The businesses who can tap into this strong demand are much more likely to achieve their revenue goals and set the table for a strong start to the new year.
Since 99.9% of businesses in the United States are small businesses, this also illustrates how critical the holiday season is to the continued success and viability of the SMBs who power our communities. Stats and trends found in the Small Business Now report illustrate what small businesses can do to start 2024 on the right foot. Small businesses truly depend on holiday sales to hit their annual goals, with 75% of retail SMBs reporting that they rely heavily on holiday sales to meet annual revenue goals.
However, most shoppers don’t realize how vital their holiday spending is to small, local businesses. Supporting small businesses and their communities is the number one reason why Americans choose to visit or buy from an SMB. Only one-third of shoppers feel that visiting or purchasing during the holidays makes a significant impact on an SMB’s livelihood.
The holiday season is a great time to attract new customers, and fortunately, shoppers are open to being courted. The top goals for SMBs heading into the holiday season are finding new customers, retaining current customers and planning for next year. The report shows that 84% of consumers planned to visit a “new to them” small business last holiday season, and 87% say they are more likely to return to a small business in the future after visiting/buying during the holidays.
During the last three months of the year, small businesses see waves of new customers both in-person and online. These shoppers are highly engaged and looking for reasons to visit or buy. This makes the holiday season a terrific time for SMBs to capture people’s attention and grow their customer base.
Unfortunately, most small businesses do not have an effective marketing strategy to nurture, retain and convert their holiday customers in the new year, and it could be holding back their growth. That same survey shows consumers (81%) are more open to receiving marketing messages from a small business after visiting or buying from them during the holidays. Most SMBs are heavily focused on reaching new customers and growing their lists during the holiday season, but equally important is how those customers are nurtured once the calendar turns to January. The key to making the most of the holiday season is having a good customer retention strategy in place.
So, what have we learned? The holiday season isn’t just a big deal for small businesses — it’s absolutely vital to their success. Every dollar, or sale, goes a long way and might make the difference between a good year and a bad one. Since shoppers are looking for excuses to visit and buy from SMBs during the holidays, it’s critical that those businesses market themselves and communicate their value.
It’s also important to keep marketing once the holidays end. Americans showed similar interest in supporting small businesses in the new year as well, and many were turned off after never hearing from a business again after making a purchase. Tactics like loyalty programs, events and contests in an effort to activate audiences work to turn holiday customers into repeat buyers in the following year.
