Is the Holiday Season Truly Important for Small Businesses?

Did you know that in just the last two months of 2023, Americans spent over $222 billion on online shopping? This figure comes from Adobe Analytics and it shows one thing: consumers really want to spend during the holiday season. But the story doesn't stop at these huge numbers. For small businesses (SMBs) – which account for up to 99.9% of all businesses in the US – the holiday season is not just an opportunity to increase revenue, but a vital chance to survive and thrive.

Constant Contact conducted a survey with 500 small business owners and 500 consumers to better understand the impact of the holiday season. The results revealed many surprises, especially the gap between business expectations and customer perception.

How Important is Holiday Revenue for Small Businesses?

The survey indicates that 75% of retail businesses rely heavily on holiday revenue to meet their annual goals. Among them, 58% consider holiday customers “extremely important” for overall success. Notably, half of small businesses (50%) earn at least a quarter of their annual revenue from holiday shoppers, and this figure rises to 73% for retail businesses.

However, most consumers don't realize this importance. Only 33% of shoppers feel that visiting or purchasing from a small business during the holidays has a significant impact on its livelihood. This is a perception gap that needs to be narrowed.

Opportunity to Attract New Customers

The holiday season is a great time for small businesses to find new customers. Their top goals during this period are finding new customers (63%), retaining existing customers (52%), and planning for the next year (45%). And the good news is that consumers are receptive: 84% of consumers planned to visit a small business “new to them” during last year's holiday season. Furthermore, 87% said they were more likely to return to a small business after visiting/purchasing during the holidays.

Popular marketing tactics that small businesses use to grow their customer base during the holidays include: personalized emails and messages (52%), social media advertising (42%), and discounts or promotions (40%).

Challenge: Retaining Customers After the Holiday Season

Although the holiday season brings in a large number of new customers, most small businesses lack effective strategies to nurture and retain them. 81% of consumers are willing to receive marketing messages from small businesses after visiting or purchasing during the holidays. However, 93% of small businesses believe retaining new customers in the following year is important, but only 18% feel their Q1 strategy is truly effective. Worse, 14% have no post-holiday retention strategy at all.

As a result, less than half (49%) of shoppers receive an email after a purchase, and 27% never hear from the business again. This indicates a significant missed opportunity.

Lessons for Small Businesses

The holiday season is not just a time for sales – it's an opportunity to build long-term relationships with customers. Small businesses need to have marketing strategies in place before, during, and after the holiday season. Implementing loyalty programs, organizing events, or running contests can help activate audiences and turn holiday customers into repeat buyers in the following year.

Remember, every dollar spent during the holiday season means a lot to small businesses. And if you're a business owner, don't miss the chance to connect with customers even after the holidays end.

What about you? Do you have a strategy to retain customers after the holiday season? Share your experiences in the comments below!