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Constant Contact recently released its latest Small Business Now report, which reveals that 89 percent of small businesses globally have felt the impact of inflation as they prepare for the critical holiday sales season.
The report, which surveyed over 1,600 small businesses (SMBs) and 3,000 consumers across the United States, Australia, Canada, and the United Kingdom, highlights the challenges SMBs face as they approach the year’s final quarter, a crucial period for many businesses.
The report underscores the importance of holiday sales for small businesses, with 33 percent of SMBs feeling the most pressure to drive revenue during the fourth quarter.
Inflationary pressures continue to impact both businesses and consumers, with 52 percent of consumers globally reducing their spending at small businesses due to inflation. As a result, SMBs are adjusting their marketing strategies to remain competitive and attract holiday shoppers.
“Small businesses are incredibly resilient, but as they head into a holiday season filled with uncertainty, they must get proactive in their marketing to ensure success,” said Sarah Jordan, Chief Marketing Officer at Constant Contact. “Our study shows that despite inflation, shoppers still want to support small businesses, so the SMBs who thrive will be the ones who start their holiday marketing early, streamline their work with automations, and engage customers consistently throughout the season.”
Inflation’s Impact on Small Businesses and Consumers
The report highlights the steps SMBs are taking to navigate inflationary challenges:
- 46 percent of SMBs have cut back on expenses to manage costs, and 39 percent have raised prices.
- In Canada, 35 percent of SMBs have raised their prices, the lowest rate among the surveyed regions.
- 52 percent of consumers globally have reduced their spending at SMBs, with Australia (60 percent) and Canada (56 percent) leading the trend.
- In the U.S., 52 percent of consumers plan to reduce their spending at small businesses this year, a significant increase from 27 percent in 2022.
- 62 percent of consumers cite price as a key factor in their holiday shopping decisions.
Marketing Challenges for Small Businesses During the Holidays
The holiday season remains a critical period for SMBs, with many relying on strong year-end sales to sustain their businesses. However, many SMBs face challenges with their marketing strategies during this busy time:
- The percentage of SMBs attributing at least 50 percent of their annual sales to the holiday period has nearly doubled since 2023.
- Canadian small businesses are the most reliant on holiday sales, with 21 percent stating that at least half of their annual revenue is generated during the last quarter.
- 65 percent of SMBs struggle with budget constraints or time management during the fourth quarter.
- 79 percent of SMBs who measure their marketing effectiveness expressed uncertainty about the success of their holiday strategy in 2023.
- 20 percent of SMBs have no way to measure the impact of their holiday marketing efforts.
Early Holiday Planning: A Missed Opportunity for Some
While October is often seen as the start of the holiday shopping season, the study reveals that SMBs may be missing out by waiting too long to begin their holiday preparations:
- 99 percent of consumers revisit the same businesses each year for holiday shopping.
- 92 percent of consumers who revisit businesses during the holidays plan to shop at small businesses this year.
- 58 percent of U.K. consumers start thinking about holiday shopping before October, compared to 38 percent of consumers globally.
- 42 percent of SMBs globally wait until October or later to begin their holiday preparations, with 30 percent of SMBs in Australia not starting their marketing efforts until November.
How SMBs Can Improve Their Holiday Marketing Strategies
The report highlights ways SMBs can improve their marketing efforts to better prepare for the holiday season:
- The top strategies for a successful holiday season include improving efficiency (35 percent), offering special promotions (28 percent), and creating an end-of-year marketing strategy (26 percent).
- Canadian small businesses are more likely to experiment with new marketing tools or technology compared to other regions.
- Australian SMBs are more likely to start ordering inventory earlier than usual to prepare for the holidays.
- 78 percent of consumers plan to shop at a small business they have never purchased from before during the holiday season.
- 51 percent of SMBs believe that social media marketing and email marketing will have the biggest impact on their holiday goals.
Study Methodology
Constant Contact’s Small Business Now report surveyed over 1,600 small business decision-makers from companies with 250 employees or fewer in the U.S., Australia, Canada, and the U.K. Additionally, over 3,000 consumers aged 18 and older across these regions participated in the survey. The study was conducted by Ascend2 Research in August 2024.
