In a recent study, Constant Contact, unveiled the significance of the holiday season for small business success. The special holiday edition of the Small Business Now report not only underscores the crucial role the final quarter of the year plays in small businesses’ financial well-being but also sheds light on consumer holiday spending and the strategies employed by small businesses to boost sales.
Constant Contact’s findings have brought to the forefront the holiday season’s pivotal role, often underestimated by shoppers. While half of small businesses report that holiday sales contribute at least 25 percent of their annual revenue, merely one-third of consumers are aware of the substantial impact their holiday spending has on these enterprises. The situation is even more pronounced for retail small businesses, as they are twice as likely to depend on the holiday period for 50 percent or more of their yearly revenue. This disconnect underscores the importance of nurturing strong customer relationships and presents an opportunity for small businesses to communicate the significance of shopping local during the holiday season.
Laura Goldberg, the Chief Marketing Officer at Constant Contact, emphasized the critical nature of the holiday period for small businesses, stating, “The holiday period is a crucial time of year for small businesses as they work overtime to attract new customers, hit revenue goals, and plan for the year ahead. Our latest Small Business Now report quantifies the impact holiday shopping has on small businesses, and it also reveals opportunities where they can tweak their marketing strategies to activate Q4 customers in the new year. Constant Contact is a trusted partner to small businesses around the world, and we will continue to fuel their success with powerful marketing tools to help them deliver more engaging content, meet year-end objectives, and turn holiday shoppers into repeat customers.”
Here are some key takeaways from the study:
Holiday Sales Make or Break Small Businesses
- Half of all small businesses receive more than 25 percent of their annual sales during the holiday season.
- For retail small businesses, 75 percent heavily rely on holiday customers, attributing over one-quarter of their annual sales to the holiday period.
- 58 percent of retail small businesses consider holiday customers “extremely important” for their overall success.
The holiday season, traditionally associated with festive lights, celebrations, and gift-giving, holds far greater significance for small businesses than many people realize. In fact, for these local enterprises, holiday sales can often make or break their entire year. A recent study by Constant Contact has shed light on the pivotal role played by the holiday season in the success of small businesses.
According to the study, an astonishing half of all small businesses report that the period between October and December, known as the holiday season, is nothing short of a lifeline. During this time, they reap more than a quarter of their annual sales, highlighting the extraordinary reliance placed on holiday shoppers to meet their yearly revenue goals.
When we delve deeper into the retail sector, the findings become even more eye-opening. A staggering 75 percent of retail small businesses admit to heavily depending on holiday customers to sustain their operations, with more than one-quarter of their yearly sales attributed to the holiday period. This heightened dependence on holiday revenue underscores the make-or-break nature of the season for these businesses.
Furthermore, the study revealed that a significant 58 percent of retail small businesses consider holiday customers to be “extremely important” for their overall success. These statistics underscore the immense pressure that small businesses, particularly those in the retail sector, face during the holiday season, making it clear that holiday sales are the cornerstone of their financial well-being.
In essence, it’s not just about the glittering decorations and joyful music during the holiday season; it’s about the critical lifeline that holiday sales provide to small businesses, enabling them to thrive, meet their annual revenue goals, and continue to serve their local communities.
Consumers Unaware of Their Impact
- While supporting small businesses and their communities is the primary reason consumers choose to buy from them, only one-third (33 percent) of consumers realize the significant impact of their holiday shopping on small businesses.
- Small businesses express feelings of thankfulness (78%), happiness (69%), and hopefulness (37%) after a customer’s holiday visit or purchase.
Amid the bustling aisles of holiday shopping, consumers often find themselves on a quest to uncover unique gifts, support local businesses, and embrace the spirit of giving. While it’s heartening to see many consumers prioritize the patronage of small businesses and their communities during this time of year, what’s surprising is that a significant portion of them may not fully grasp the substantial impact of their holiday spending on these local enterprises.
Constant Contact’s recent study revealed that despite the fact that supporting small businesses and the communities they serve stands as the primary motivation for consumers to choose these businesses during the holiday season, a mere one-third, or 33 percent, of consumers recognize the significant footprint their holiday shopping leaves on small businesses. This revelation underscores a noticeable disconnect between the intentions and awareness of holiday shoppers.
Small businesses, on the other hand, are acutely aware of the impact that each customer visit or purchase has on their livelihood. The study unveiled that after a customer’s visit or purchase during the holiday season, small businesses express an overwhelming sense of gratitude, with a staggering 78 percent expressing thankfulness. This sentiment is closely followed by happiness, with 69 percent of small business owners reporting that they feel joyous and fulfilled when customers choose to support their businesses during the holidays. In addition, a significant 37 percent expressed hopefulness, seeing each customer interaction as a step towards sustained growth and success.
The stark contrast between consumers’ potential underestimation of their impact and the profound gratitude and optimism expressed by small business owners underscores the importance of shedding light on the true significance of holiday shopping at local businesses. While holiday shopping is undoubtedly a delightful experience for consumers, it’s also a lifeline for small businesses, allowing them to thrive, provide unique offerings, and serve as cornerstones of their communities.
These findings emphasize the need for consumers to recognize the powerful role they play when they choose to support small businesses during the holiday season. It’s not just about the gifts they purchase; it’s about the smiles they bring to the faces of small business owners, the jobs they help sustain, and the hope they ignite for a prosperous future.
Opportunities for Growth
- Finding new customers (63 percent) is the top goal for small businesses as they enter the holiday season, followed by retaining current customers (52 percent) and planning for the next year (45 percent).
- 84 percent of consumers are likely to visit a small business they’ve never purchased from during the holiday season.
- 87 percent of consumers say they are more likely to return to a small business in the future after visiting or buying during the holidays.
- Popular marketing tactics for small businesses include personalized emails and texts (52 percent), social media ads (42 percent), and sales or discounts (40 percent) to expand their customer base during the holiday season.
The holiday season is not just a time for small businesses to boost their sales; it’s also a period filled with opportunities for growth and expansion. Constant Contact’s study delves into these opportunities, shedding light on the strategies small businesses employ and the receptivity of consumers to embrace new experiences during this festive time.
For small businesses, the foremost objective as they embark on the holiday season is the pursuit of new customers. An overwhelming 63 percent of these enterprises prioritize finding new patrons to bolster their customer base. This emphasis on attracting fresh faces is driven by the potential for long-term relationships that can extend well beyond the holiday season. However, it’s not just about drawing in new customers; small businesses also recognize the importance of nurturing their existing customer relationships. As revealed by the study, 52 percent of small businesses place a strong focus on retaining their current customers, acknowledging the value of loyalty and repeat business.
In addition to these objectives, a significant 45 percent of small businesses use the holiday season as a strategic planning phase for the upcoming year. This forward-thinking approach ensures that these enterprises are not just focused on immediate gains but are also laying the groundwork for sustained success in the future. Consumers, too, play a pivotal role in driving opportunities for growth during the holiday season. A remarkable 84 percent of consumers express their openness to visit a small business they’ve never purchased from before, signaling their willingness to explore new and local offerings. This is not only a testament to consumers’ curiosity but also to their desire to support local businesses.
Moreover, the study reveals that 87 percent of consumers are more likely to return to a small business in the future after visiting or making a purchase during the holidays. This statistic underscores the potential for small businesses to convert holiday shoppers into loyal, year-round patrons. To achieve these objectives and tap into the opportunities for growth, small businesses employ a range of marketing tactics during the holiday season. Personalized emails and texts emerge as the most popular, with 52 percent of small businesses leveraging them to connect with their audience. Additionally, 42 percent of small businesses utilize social media ads to reach and engage potential customers. Sales or discounts, often seen as holiday staples, are also employed by 40 percent of small businesses to entice shoppers and expand their customer base.
The holiday season is not just a time of increased sales but a time for small businesses to strategically find new customers, retain existing ones, and plan for future success. Consumers play a vital role in this growth by being open to new experiences and showing loyalty to businesses they discover during the holidays. Small businesses, armed with a mix of marketing tactics, are well-positioned to seize these opportunities and lay the foundation for long-term prosperity.
New Year, New Opportunities
- While 93 percent of small businesses agree on the importance of retaining new holiday customers into the following year, only 18 percent believe their strategy is highly effective, and 14 percent have no retention strategy at all.
- 81 percent of consumers are open to receiving emails or texts from small businesses after visiting or buying from them during the holidays, but less than half (49 percent) receive an email after making a purchase.
- 27 percent of consumers report that after their initial visit or purchase from a small business, they never hear from the business again.
The dawn of a new year often signifies fresh beginnings and opportunities for growth. Small businesses recognize the immense value in retaining the new customers they’ve acquired during the holiday season, but as the recent study by Constant Contact reveals, there is room for improvement in their retention strategies.
While a remarkable 93 percent of small businesses acknowledge the importance of retaining new holiday customers into the following year, only a fraction, just 18 percent, believe their current strategies are highly effective. Even more concerning, 14 percent of small businesses admit to having no retention strategy in place at all. This disparity between recognition and action underscores the need for small businesses to prioritize and refine their customer retention efforts, recognizing that nurturing these newly acquired customers can yield long-term benefits.
On the consumer side of this symbiotic relationship, there’s a clear willingness to engage further with small businesses after the holiday season. A substantial 81 percent of consumers express their openness to receiving emails or texts from these businesses after visiting or making a purchase during the holidays. This receptiveness signifies an opportunity for small businesses to establish and maintain a lasting connection with their holiday clientele. However, there is still room for improvement in communication between businesses and consumers. The study highlights that while consumers are open to receiving further communication, less than half of them, just 49 percent, actually receive an email after making a purchase. This gap indicates that there is untapped potential in the post-purchase engagement of customers. Leveraging this opportunity effectively can help small businesses to solidify their relationships with holiday shoppers and transform them into loyal, year-round patrons.
Regrettably, 27 percent of consumers report that, after their initial visit or purchase from a small business during the holiday season, they never hear from the business again. This signifies a missed opportunity for small businesses to foster lasting connections and capitalize on the potential for repeat business. The data suggests that businesses that neglect follow-up may inadvertently leave customers feeling disconnected and undervalued.
As small businesses gear up for the holiday season, these findings provide a critical reminder of the interdependent relationship between consumers and the local enterprises they support. It is a reminder that customers are open to further engagement, and businesses have the opportunity to solidify these connections and build a loyal customer base for the future. Small businesses should take heed of these insights and invest in effective strategies to retain and nurture their holiday customers, ensuring a prosperous and symbiotic relationship in the years to come. To learn more about the insights from Constant Contact’s holiday edition of the Small Business Now report, visit https://www.constantcontact.com/blog/small-business-now-report/.
Constant Contact’s study gathered insights from 500 small business decision-makers in the United States at the Director+ level, and 500 U.S. consumers aged 18+. The “holiday season” in this study refers to the standard Q4 period of October-December. All statistics represent their respective demographics, and the survey was conducted by Ascend2 in September 2023.