Echoing other recent reports on the SMB retail segment, data from QuickBooks and Cox Communications reveal shoppers who are eager to spend at local SMB merchants — but are cautious about overspending due to inflation.
Meanwhile, this past week, Meta launched a program aimed at helping small businesses win the holiday shopping season.
In the QuickBooks Holiday Shopping Survey, shoppers plan to spend 40 percent of their budget at small businesses, which the company said represents an $88 billion sales opportunity. “Small businesses are also predicting increased sales, with about 70 percent forecasting more revenue this holiday season compared to 2021,” the authors of the report said, adding that about 80 percent of respondents, “say the 2022 holiday season is more important to their overall financial health than last year.”
And while the pace of online sales cools from soaring growth during the pandemic, QuickBooks said 50 percent of all holiday spending will be from e-commerce this year.
In its analysis report, QuickBooks noted that at least two-thirds of the consumers surveyed “say inflation will force them to buy fewer gifts this year. At the same time, in the U.S. and Canada, there could be a shift in demand toward experiences, such as entertainment and dining out.” And the reason is clear. Eighty percent of respondents said they’re seeking experiential and entertainment activities “because they couldn’t enjoy these things as much during the pandemic.”
Regarding the impact of higher prices, the authors of the QuickBooks report said inflation “is making people more price-sensitive, and eight out of 10 consumers will cut spending if the economy continues to get worse.” They went on to note that as a result, “more than seven out of 10 consumers surveyed are shopping online more often to find the best deals.”
The survey also showed that some shoppers have pulled back spending over the past months to bolster their holiday season budget.
In the Cox Communication small business spending report, 50 percent of consumers polled said they’re spending the same amount at small businesses as they did last year, while 35 percent are shopping more often. “Of those that have continued or increased support, a vast majority (77 percent) did so because they wanted to support a small or local brand,” the authors of the report said. “Over three-fourths (78 percent) of this group also said they have encouraged those in their circle to shop with small businesses they love this year.”
Despite the pledge of support, researchers at Cox Communication found that rising prices and decreased availability “are driving some shoppers away from Main Street.” And echoing other reports, consumers want SMBs to be purpose-driven. “Similar to years past, seven in 10 respondents say small business owners should promote causes they believe in, and social responsibility is a factor in how they choose to support small businesses,” the report noted. “Yet, there is a fine line as two-thirds would stop shopping with a brand if the causes they support weren’t in sync with their values (up from around half in 2019).”
With the Meta SMB program, the social media giant said it is “providing guidance and training on how to use digital tools to connect with customers and drive sales while putting a spotlight on unique and diverse businesses.”
“This year’s holiday programming will include the return of #BuyBlack Friday and Meta’s Holiday Gift Guide outlining the small businesses that have leveraged Meta platforms to grow,” the company said in a statement.
With #BuyBlack Friday, Black-owned SMBs in North America can tap into free resources, education and training with the launch of the third edition of the #BuyBlack Friday site. “Beginning November 16, consumers can visit the refreshed #BuyBlack Friday website to schedule and receive 1:1 marketing support,” Meta said. “Additionally, the website highlights several Black-owned SMBs and personal tips/guidance on how they’ve found success using Meta business tools. Cupcakin Bake Shop and Koils by Nature are a couple of the businesses to be featured this year.”
Meta said for minority-owned businesses already disproportionately impacted by the pandemic, “the importance of the holiday season is even more acute — 25 percent of U.S. minority-owned businesses expect to make more than half their annual revenue from October-November, and this is highest for Black-owned businesses at 34 percent.”
And as a way to encourage consumers to support SMBs throughout the holiday season, Meta said it is “highlighting a series of businesses from the Meta Business Leaders Network in the new 2022 Smalliday Showcase gift guide.” Consumers who shop through the guide can take advantage of special holiday promotions and discounts. Meta said the guide will feature a number of businesses “like Bottled Up Designs and Hard Times Skate Shop and include personal anecdotes on how they’ve leveraged Meta tools to find success.”
Meta has also rolled out its SMB Holiday Marketing Guide, which is designed to help SMBs “effectively advertise to support sales growth during the holidays.” The company is sharing advice and tips “on how to use Meta’s various free tools and products to help business owners prepare to meet shoppers’ expectations and grow sales this holiday season.”
The guide also includes the Holiday 2022 Meta Foresight Interactive Report, which Meta said enables marketers to explore insights from the 2019, 2020 and 2021 holiday seasons across 33 key markets; tips on how to turn new holiday customers into returning customers post-holiday, and more.”
Some specific tactics offered include SMBs powering their ads with Meta’s “Performance 5,” which the company said is guidance SMB owners can leverage “to make their ads more impactful, helping drive sales and expand customer bases.”
Meta also suggests SMBs update their content and business info and “create a distinct look for your holiday marketing campaign and keep it consistent all season” while giving ads a holiday look by positioning products or services “as gifts by using different personas in posts and ads” such as sharing different gift ideas for family and friends.