Small Businesses Project Holiday Sales to Drive a Third of Annual Revenue
A new report from Intuit QuickBooks highlights the critical role of holiday sales in the success of small businesses, as consumer spending is expected to decrease by 34% compared to last year. The 2024 QuickBooks Holiday Shopping Report, based on surveys of US consumers and small businesses, reveals strategies and trends for navigating the financial climate this holiday season.
Consumers Trim Holiday Budgets Amid Inflationary Pressures
The report projects the total amount of consumer holiday spending to reach $211 billion this year, which marks a decrease of $85 billion compared to 2023. Rising costs of essentials like groceries and gas are driving nearly a quarter (23%) of consumers to cut their holiday budget.
Small businesses, which rely heavily on seasonal income, are expected to feel the pinch. On average, consumers plan to spend $294 on small businesses this holiday season, a sharp 40% drop from last year’s $485. Small business owners estimate that holiday sales will account for 33% of their annual revenue, and 61% identify seasonal benefits as critical to their success.
Despite these challenges, consumer loyalty to small businesses remains strong. According to the report, 93% of consumers surveyed, representing an estimated 240 million people, plan to make small purchases, creating a $76 billion revenue opportunity for small businesses.
Emotional and Practical Drivers of Less Shopping
Consumers cited emotional connections and unique offerings as key motivations for small purchases. Almost half (47%) said they prefer small businesses to big stores because they want to support their communities and the efforts of entrepreneurs. Another 52% identified the ability to find unique, high-quality gifts as a big factor.
Strategies for a Competitive Holiday Season
To adapt to the expected drop in costs, small businesses are taking proactive steps:
- Advance Preparation: More than 40% of small businesses started planning for the holidays in September or earlier, focusing on marketing (34%), inventory (33%), and planning discounts (33%).
- Using Digital Tools: The report advises businesses to use AI and marketing platforms like QuickBooks and Mailchimp for personalized campaigns, targeted discounts, and optimized operations.
- Increasing Social Media Presence: Social media platforms such as Facebook, Instagram, and TikTok are gaining popularity as a place to shop, with 52% of small businesses planning to sell on social media this season.
“Consumers are facing tough financial pressures, and are increasingly looking for flexibility and convenience in how they shop and interact with businesses, as well as deals and offers to reduce costs,” said Joseph Black, director of Product Management, Accounting, and Commerce. in Intuit QuickBooks. “However, our research shows that despite careful spending plans, consumers want to support small businesses and 31% of consumers plan to spend more money on small businesses than ever before. To capture this desire to buy less, business owners must use digital tools to effectively manage inventory, including marketingshare deals where shoppers look the most, and profit It is AI powered tools to simplify daily tasks and increase their sales force.“
Important Purchase Dates and Inventory Management
Black Friday (November 29) and Cyber Monday (December 2) are expected to remain shopping days, with 65% of consumers planning to shop on these days. However, Small Business Saturday (November 30) is also becoming increasingly important, as shoppers plan to complete 39% of their purchases on this day.
Small businesses are encouraged to prepare inventory in advance to meet demand, ensuring that popular products are well stocked for these peak shopping events.
Photo: Envato
