New Bankrate data shows that 61 percent of holiday shoppers are likely to choose Small Business Saturday for holiday shopping. That number is slightly higher than the number of shoppers likely to shop on Black Friday (56 percent).
That’s big news when you consider that Small Business Saturday has only been around since 2010 when American Express created the holiday. This year, Small Business Saturday is on November 25, 2023, so consumers and small businesses will want to mark the calendar.
Here’s a deeper look into the numbers along with some tips on how small business owners can prepare for Small Business Saturday.
More shoppers plan to shop at a small business in 2023
A good 72 percent of shoppers are planning to shop with a small business this year, up from 65 percent last year.
Given that there are nearly 336 million people in the U.S., according to the U.S. Census Bureau, nearly 242 million people (72 percent) may be out shopping in stores or shopping small businesses online. This represents millions of additional people shopping this holiday season compared to last year.
Some 81 percent of shoppers surveyed plan to shop on at least one of these days: Black Friday, Small Business Saturday or Cyber Monday. Of those, 92 percent of both Gen Z and millennials are planning to shop on Black Friday, Small Business Saturday or Cyber Monday. This is compared to 80 percent of Gen Xers and 70 percent of baby boomers who plan to shop on at least one of these days.
This shows that younger generations are the most likely to take advantage of holiday sales, which was true of last year’s crowd as well. Gen Z showed a slight increase in Thanksgiving weekend shopping this year (92 percent versus 90 percent for 2022). Millennials stayed the same as this year, while the other generations shifted slightly: 79 percent for Gen X and 71 percent for baby boomers in 2022.
Finally, parents with children under age 18 (93 percent) are more likely to participate than people without kids (83 percent). Given that some of the popular holiday items are toys, it makes sense that parents would be at the forefront of holiday shopping.
Millennials lead the way on Small Business Saturday shopping
Small Business Saturday is a big attraction for younger crowds. The number of people from each generation coming out to shop on Small Business Saturday looks like this:
- 72% of millennials
- 69% of Gen Zers
- 59% of Gen Xers
- 51% of baby boomers
Each generation participating in the holiday has grown slightly since 2022, with the exception of Gen X. Last year, 69 percent of millennials and 65 percent of Gen Zers shopped on Small Business Saturday. Meanwhile, 61 percent of Gen X and 49 percent of baby boomers participated.
37 percent of holiday shoppers plan to do most of their shopping in November
According to Bankrate’s Early Holiday Shopping survey, (conducted in August 2023), the majority of holiday shoppers (37 percent) plan to start checking off their holiday shopping lists in November. About 26 percent planned to start shopping in October, and 12 percent each had started or planned to start as early as August or September.
“While holiday shopping seems to start earlier every year, Thanksgiving Weekend still includes several important events for retailers and consumers. With Americans seemingly in a frugal mood this holiday season due to high inflation and high interest rates, I think this will be the best discounting season in years,” states Ted Rossman, Bankrate Senior Industry Analyst.
Some big box retailers like Amazon, Target and Walmart even cut prices for sales during the month of October. Per the more recent survey, a good 54 percent of shoppers took part in the October sales. Some 30 percent of the shoppers said they bought holiday products during these sales, but more said they purchased non-holiday items — 34 percent, to be specific.
If you break it down by generation, Gen Z (52 percent) and millennials (45 percent) were the most likely to buy holiday products during the October sales. Gen X (22 percent) and baby boomers (12 percent) didn’t seem to make holiday shopping a priority during this time.
For parents, 49 percent with kids under age 18 focused on holiday shopping during the October sales, while only 28 percent of non-parents did.
Retail sales are currently up about 3.1 percent compared to a year ago, according to Bankrate retail sales data. However, the Consumer Price Index has risen 3.7 percent in the last 12 months as of September, states the U.S. Bureau of Labor Statistics.
These numbers suggest that consumer spending isn’t keeping pace with the rise in costs. Shoppers may be paring back to account for inflation. According to Bankrate’s Early Holiday Shopping survey, 33 percent of shoppers surveyed said they expected inflation to affect how they shop this year.
25% of low-income households don’t plan to do any holiday shopping
Twenty-five percent of households with less than $50,000 in annual income don’t plan to do any holiday shopping. By comparison, just 9 percent of earners with more than $100,000 don’t plan to shop. Shoppers who don’t plan to shop for the holidays include:
- 25% for households with less than $50,000
- 13% for households with $50,000 to $79,999
- 7% for households with $80,000 to $99,999
- 9% for households with over $100,000
Holiday shoppers plan to shop in-person an online
Holiday shoppers actually plan to do a little of both in-person and online shopping for the season. Bankrate data shows that it’s an even split of 72 percent who plan to shop in person versus online. In 2022, just 67 percent decided they would shop in person, so in-store shopping is becoming more popular this year.
According to Ted Rossman, “These results show that in-person shopping isn’t dead – far from it. Just like a lot of workplaces have adopted a hybrid model, retail has embraced an omnichannel approach that incorporates online, in-person and even a blend of the two through programs such as buy online and pick up in-store. I’m surprised how many young adults plan to do at least some of their holiday shopping in person.”
You can even break it down between small and large businesses. For large businesses, 77 percent of people plan to go with big retailers when holiday shopping. About 72 percent plan to go with small businesses. Last year, just 65 percent planned to shop small during the holiday shopping season.
At small businesses, shoppers prefer a brick-and-mortar place for small businesses versus an online shopping experience. Specifically, 44 percent of shoppers would shop small online, while 51 percent would shop small in person. Shopping small online includes shopping at online marketplaces like Etsy, eBay and Facebook Marketplace.
Last year, the number of people shopping small was 35 percent for online shopping and 33 percent for in-person shopping. This shows a rise in in-person shopping for the small business scene.
For large businesses, it’s a mixed bag, which shopping method people use. Some shoppers go online or in-person to fulfill their holiday shopping, while others will do a little of both. The numbers are an even-keeled 54 percent spread evenly between online and in-person shopping. In 2022, 45 percent shopped online at a large business, while 41 percent shopped in person.
Baby boomers more likely to buy online at large businesses
Baby boomers are more likely to shop at large businesses online than Gen Z, their younger counterparts. Specifically, 49 percent of baby boomers plan to shop online at large businesses versus 34 percent of Gen Z.
Older generations are also more likely to shop in person. For example, 46 percent of baby boomers, 45 percent of Gen Xers and 44 percent of millennials plan to shop in person at a large business, compared to 36 percent of Gen Zers who plan to shop in person at a large business.
With small businesses, 54 percent of baby boomers plan to make at least some purchases in person at small businesses versus 45 percent of Gen Z shoppers.
Small business owners may want to prioritize online sales
American Express has conducted a survey on the impact that Small Business Saturday has on small businesses. According to the survey, 55 percent of small business owners expect the holiday to make a significant difference to their bottom lines this year.
About 34 percent of small business owners have sought ways to boost their online shopping experience. Of those who made changes, 83 percent said it boosted online sales.
And it turns out that customers are looking for new ways to experience small business shopping. The American Express survey shows that 45 percent of Gen Z and millennial shoppers said they’d shop small more if they could do so through augmented reality. To help make augmented reality come to life, American Express is offering an augmented reality experience this year, highlighting 10 small businesses where shoppers can virtually explore the store using their cellphones and make purchases.
Business owners wondering about a solid strategy for capturing more sales this Small Business Saturday might consider moving sales online — or creating an online store if they don’t have one.
Unique gift ideas and customer service are the most likely reasons for people to shop small
People shop small for a variety of reasons, and some have mixed positive feelings about small businesses. A whopping 96 percent of holiday shoppers feel small businesses provide better experiences than large businesses in at least one area.
The top three areas where shopping small are seen as providing a better experience include the shop’s unique gift ideas (56 percent), customer service experience (54 percent) and fostering a sense of community (44 percent).
In 2022, 51 percent of shoppers cited unique gift ideas as their top reason for shopping small. Forty-eight percent cared about customer service, while 39 percent shopped to foster a sense of community.
Holiday shoppers may feel that it’s important to shop small businesses to support them and boost the local economy. Business owners can learn from the reasons shoppers stated to help the business know what areas to focus on for its seasonal sales.
| Reason | % of shoppers who feel small businesses provide a better experience in this area |
|---|---|
| Unique gift ideas | 56% |
| Better customer service | 54% |
| Fostering a sense of community | 44% |
| Better product quality | 31% |
| Convenience/saves time | 30% |
| Detailed product knowledge | 29% |
| Lower prices | 26% |
| Easy returns | 24% |
| Lower environmental/carbon impact | 19% |
| Better inventory or availability | 14% |
Younger generations are more likely to want both high-quality products and lower prices when shopping small
Baby boomers and Gen Xers are more likely to cite unique gift ideas, better customer service and fostering community as benefits to shopping small over large businesses.
Meanwhile, Gen Z and millennials are more likely to enjoy better quality products and lower prices than the older generations.
| Unique gift ideas | Better customer service | Fostering community | Better quality products | Lower prices | |
|---|---|---|---|---|---|
| Gen Z | 42% | 44% | 30% | 42% | 37% |
| Millennial | 53% | 51% | 38% | 36% | 34% |
| Gen X | 59% | 54% | 44% | 27% | 24% |
| Baby boomers | 64% | 60% | 55% | 24% | 14% |
For comparison to 2022, 53 percent of Gen Xers cared about unique gift ideas versus this year’s 59 percent. Only 41 percent of millennials enjoyed the unique gift ideas last year compared to 53 percent for 2023.
Some generations also seem to appreciate small businesses’ customer service than in past years. This year 54 percent of Gen Xers (compared to 49 percent in 2022) and 51 percent of millennials (compared to 35 percent in 2022) believe small businesses provide a better customer experience over large businesses.
3 ways to prepare for Small Business Saturday
Shoppers abound on Small Business Saturday, making it likely that your small business will see an uptick in traffic for the event. To make sure you’re ready to handle the rise in customers, here are some tips for preparing your small business for the holidays.
Plan which deals you’re going to offer
Get the most out of your holiday sales by planning which items you’re going to give customers a deal on. Choosing which products to discount can involve different strategies.
You could choose your most popular products since you know the deals will draw customers in and move inventory. Or you could discount some less popular items to encourage shoppers to buy those.
If it’s your first time engaging in a shopping holiday, consider discounting a variety of items and keeping track of which items sell best. That way next year you can create deals that you know your customers will love.
Stock up on inventory
Being prepared is the name of the game when you’re handling more sales than usual for Small Business Saturday. You could research which items sell the best during the holiday season and estimate how much you expect to sell. Then, order plenty of supplies and inventory ahead of time so that you’re not running out of products on the shelf.
When possible, tie your estimates to data from holiday sales for past years. But in some cases, you might have to give it your best guess if you’re a new business.
In a worst-case scenario, if you do run out of products, you could let customers order your products as a back-order. Be sure to let them know the expected shipping dates if you’re forced to offer this option.
Take advantage of free advertising
First, you can list your small business on the Small Business Saturday map hosted by American Express. You’ll need to qualify to get approved for listing, and it’s a requirement that you must accept American Express.
Aside from the map, you can print flyers and hand out flyers or coupons to customers already coming into your store. Online businesses can advertise the deals on your website well ahead of time. Also, take advantage of social media or local advertising, such as direct mail flyers.
Decorate your store or revamp your website
Finally, don’t underestimate the power of spreading holiday cheer within your small business’s sphere of influence. You can take part in local parades or community holiday events. If there aren’t any in your area, consider organizing an event and getting customers involved.
-
Bankrate.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,316 adults, including 1,868 holiday shoppers. Fieldwork was undertaken between October 18th to 20th, 2023. The survey was carried out online. The figures have been weighted and are representative of all US adults (aged 18+). It employed a nonprobability-based sample using quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.
Read the full article here
