New research by global e-commerce company VistaPrint reveals how SMBs are preparing to conquer the festive season.
According to its research, one in three (36%) of SMB owners reveal they typically generate between 11-20% of their annual revenue during November and December, in the lead up to Christmas.
In 2022, more than half of SMBs (55%) saw between a 10% and 25% increase in revenue compared to the regular trading period. This success doesn’t come without its challenges though – far from it in fact.
In 2022, 83% of SMB owners experienced challenges over the holiday period, and more than one in three (37%) SMB owners felt disorganised or unprepared. The top challenges SMBs experienced included managing financial pressures (25%), inflation (25%), juggling personal life (24%) and keeping up with customer demand (24%). Increased staff costs (19%), supply chain delays (17%), increased competition (15%) and getting marketing right (14%) were also cited as challenges.
Gen-Z SMB owners wore an increased burden compared to other generations, as most (97%) reported challenges, especially in managing financial pressures and expenses (29%).
The sentiment this Christmas
Now in 2023 – with an array of challenging events happening both on our shores and overseas, the year has gotten away from many – and suddenly we are heading into the festive season again. This time, one third of SMBs (33%) are feeling optimistic, 31% feel prepared, 30% feel confident, 25% even feel excited. However, 1 in 5 (19%) still feel uncertain, and many SMB owners describe themselves as nervous (17%), apprehensive (17%) and overwhelmed (15%).
It’s perhaps no surprise that businesses that have been in practice for less than two years find themselves particularly apprehensive (32%), while larger SMBs (11+ employees) are more optimistic, two fifths of them (42%) demonstrating high levels of preparedness vs businesses with 2-10 employees at just 23%.
As the saying goes, practice makes perfect. However, challenges during such a busy time are only normal. This year, 27% of SMB owners are expecting to have challenges meeting customer expectations for quick service, face increased competition in the industry (25%), and staff and hiring issues (20%) – to name a few. Managing increased customer volume (19%), stock shortages (18%), inventory management (14%) are also causing concern for SMB owners this year.
Fail to prepare, prepare to fail
To manage the challenges that come along with a busy holiday period, 85% of SMB owners are looking ahead and implementing strategies to manage increased customer volume including adjusting operating hours (30%), stocking up (26%), hiring extra staff (22%) and prioritising certain products and services (21%). However, the top strategy SMBs are employing to survive the holiday season is taking time out for moments of self-care (30%), followed by booking themselves a post-Christmas holiday so they have something to look forward to (22%).
Making the most of the madness
It goes without saying that as a huge revenue booster for SMBs, serious attention must be paid to making the most of this time and luckily, SMB owners are open to many different tactics. 1 in 5 SMB businesses (20%) are planning promotions, offers and incentives like free shipping or cash back to attract customers, increasing social media activity (19%) and offering longer opening hours (19%).
A whopping 68% are ramping up marketing activity to promote their businesses during this time – leaning on a mix of traditional advertising and digital tools to get their name out there.
Over a third (35%) are embracing social media advertising, 1 in 4 are leveraging email marketing, and 22% are investing in online/digital paid advertising.
Additionally, 14% of Australian SMB owners intend to pursue traditional print advertising in 2023, while 12% are eager to explore influencer marketing, demonstrating the growing prominence of digital and unconventional marketing approaches during one of the year’s busiest periods.
Nearly a quarter of SMB owners plan to produce promotional materials and merchandise for holiday marketing, with 44% focusing on materials like flyers, posters, brochures, magnets, postcards, and loyalty cards.
VistaPrint marketing director & SMB Expert Linda McDonald commented on the Holiday Report Findings. “The results paint a vivid picture of the (sometimes chaotic) landscape that small and medium- sized businesses face as they prepare for the festive and summer holiday season. The diversity in experiences and approaches highlight the need for tailored strategies to navigate the unique challenges that Christmas brings – focusing on the customer, early planning, finances and marketing support cannot be underestimated and can determine the success and future of a business,” she said.
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