Key takeaways
- Holiday shoppers are shifting their habits in light of inflation and other economic challenges.
- Small businesses can attract customers and weather the slump by addressing consumer concerns and playing to their strengths.
- Businesses should offer unique services, branch out their presence and offer a wide range of prices to meet customers’ holiday shopping needs.
While the holiday season is usually the busiest time of year for small businesses, this year may see a slight dip in traffic. According to Bankrate’s early holiday shopping survey, one in three (33 percent) shoppers are trimming their holiday shopping lists as they aim to spend less on the season.
With stresses about prices, debt and credit card interest all influencing shopper behavior, small businesses can still make the most of the holiday season.
By considering their shoppers’ budgets, capitalizing on a unique market and spreading their presence beyond the storefront, small business owners can conquer the holiday rush and crush their sales despite the holiday financial squeeze.
Start your holiday deals early
Holiday shoppers are tackling their lists earlier in the season in order to save money and avoid the last-minute December rush. According to Bankrate’s holiday shopping survey, nearly half – 48 percent – of holiday shoppers planned their holiday shopping for August, September or October.
“While some people scoff that the holiday shopping season seems to start earlier every year, getting off to an early start gives you more time to comparison shop for the best deals and spread out the impact of your purchases,” says Ted Rossman, Bankrate senior analyst.
Rewarding early birds can help meet your customers’ needs and see where your demand is, as well as foster goodwill with early holiday shoppers.
You can also encourage repeat shoppers to come back by offering loyalty programs such as purchase punch cards, discount email lists and membership programs for savings throughout the season.
Offer prices for all budgets
As budget-conscious shoppers tighten their holiday shopping lists, it can help to offer items that will fit all budgets and needs. While pricier items can help drive big sales, having a limited range of prices may repel customers who can’t afford bigger-ticket gifts, or who may have already made their bigger purchases for the year.
However, offering a mix of ‘big ticket’ items alongside smaller, less expensive items – such as stocking stuffers and small gifts – can allow shoppers who are working with a tighter budget to buy something from a store they love. This can include adding small, low-cost items to sell at the checkout counter, such as pens, ornaments, small toys or holiday treats.
Jenny McCain, owner of jam business Woodhill Cottage, finds that offering 14 ounce jam jars keeps the price point manageable for most of her customers, who often buy jams to give as gifts or to use in recipes.
“Have some things like that that are easy pickups,” McCain said. “And have a blend of them. Look for things that are unique.”
Offering smaller versions of big-ticket items – such as sampler or tester packs, mini art pieces that are quick to make and postcards – can also give a budget-minded customer a chance to walk away with a purchase.
Gift cards – especially if they’re in gift packaging or come with a holiday card – can also allow customers to set their own price point for a gift. Some stores offer discounts on gift cards over a certain amount – such as $5 off a $100 gift card – encouraging customers to spend a certain amount. As a bonus, whoever receives the gift card could be a new customer.
Give your customers a unique experience
While large retailers may offer lower prices or have a larger variety of items, small businesses can key in on a more personal, intimate and unique shopping experience.
Shoppers stressed by a full day of shopping may welcome little gestures that get them through the door like a complimentary hot drink station or free samples.
Use you and your employees’ unique experience with your products to help inform customers as they shop. If customers are looking for a gift, encourage your employees to advise them to find the perfect purchase – whether it’s a small gift for a neighbor, a holiday swap gift or something to jazz up their holiday dinner.
Holiday exclusive items, such as items with themed prints, packaging and flavors, can also drive traffic – especially if they can only be found at your store.
“As a store, you can decide what’s going to distinguish something if it comes from you,” McCain said. “Folks know it’s good quality and that it’s a nice present.”
Businesses can also offer services such as gift wrapping, which can save customers time and give them an extra reason to come into your store.
Expand your outreach
Your retail presence doesn’t have to be confined to a brick-and-mortar store. Spreading out your presence both physically and digitally can help you reach more customers and expand your presence.
Holiday fairs and festivals can be a good way to meet new potential customers, sell wares and advertise your products. While these events often charge a fee, it can be a good way to expand your presence from browsing alone.
Pop-up stores – from temporary storefronts to one-day sidewalk booths – can also help stores without a permanent retail spot, such as online retailers, attract street traffic and make some physical sales.
Social media and newsletters can also help small businesses advertise to a wider audience. Using sites like Facebook and Instagram to advertise inventory, run flash sales and post updates can encourage customers to follow and share your business’s page. Email lists can also remind customers to visit your store and offer exclusive deals in their inbox.
“I would do it with a multi prong approach,” McCain, who makes the bulk of her sales online, says. “Make sure the website’s really good – go to websites that you like, that you find easy to navigate and use that as your template.”
Anticipate your customers’ needs
Knowing your customer base and what they’re looking for during the busy holiday season can go a long way to get customers in your door.
McCain put together holiday packages ahead of time that allowed busy customers to grab a quick host gift without worrying about wrapping. She also started offering gift baskets, corporate packages and gift boxes for realtors and corporate customers looking to send appreciation gifts to their customers.
“Think about what you know people are looking for,” McCain said. “Our jams are a great Christmas gift for neighbors, for teachers, for friends. They’re great hostess gifts. You have to think about the places where folks are looking to solve a problem, even a small problem.”
Consider the kinds of items your customers will be looking for as they browse your store. If you see a high volume of office workers, you might want to set up a “Gift Swap” section with items under $20 appropriate for a workplace holiday gift exchange.
Food shoppers might appreciate recipes to go along with certain items, or even entire dinner menus with items that meet a certain price point. Offering pre-packaged or quick dinner items may also be the perfect item for a busy shopper in need of a quick dinner side.
Prioritize customer convenience
In the era of online shopping, DoorDash and next-day delivery, convenience is king. While you don’t have to try and be the next Amazon or Etsy, finding ways to make your customers’ shopping experience easier can pay off.
With 42 percent of shoppers doing their holiday shopping online, according to Bankrate’s holiday shopping survey, having a digital presence is essential. Putting prices, inventory, and information like your hours and location can help customers plan ahead.
While selling and shipping items online may not be feasible for all businesses, allowing customers to order items ahead of time and pick them up in-store can make the shopping process smoother.
The bottom line
As holiday shoppers adjust their budgets for a tighter holiday season, small business owners should take care. Offering a wide price range, paying attention to customer needs and behaviors and expanding your presence through social media and otherwise can help bring in traffic and make your holiday season a success.
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