Retailers may not get everything they wish for this holiday season. A recent Gallup poll predicts that consumer spending on Christmas gifts in 2011 will be about the same as it was in 2010, or about $712 per person. Although this may seem like relatively good news, given the shaky economy, nearly 30 percent of people polled anticipate spending less rather than more on gifts in 2011, up from 15 percent last year. What’s more, tough conditions are expected to persist through year’s end.
What else can small-business owners expect? Citigroup, which conducted its own survey, identified these major seasonal shopping trends, which we offer with some advice on how to react to them.
- Black Friday will draw more shoppers. More than 60 percent of shoppers plan to hit the stores on the day after Thanksgiving, up from 54 percent in 2010 and 49 percent in 2009. But some 75 percent of shoppers say they’ll make holiday purchases before Nov. 25, up from 69 percent in 2010. Small business strategy: Leave the larger retailers to fight it out and save your discounts for later — or go early.
- Discounts will drive sales. In these tough economic times, discounts count more than ever, especially at big-box stores like Target and Walmart (where 61 percent of shoppers say they’ll spend money). Small business strategy: After Black Friday, small businesses should time discounts strategically, with the goal of driving business during slow days or weeks during the holiday season.
- Spending will be influenced by economic concerns. Not exactly a revelation (45 percent of shoppers voiced this concern, up from 38 percent in 2010), but again useful information for retailers. Small business strategy: Try offering extras, such as a small free gift or service to customers who make large purchases — whatever it takes to draw people into your store.
- Big promotions command attention. More shoppers are looking for big promotions this year (64 percent, up from 54 percent last year). Small business strategy: The bigger the price reduction, the more business you’ll likely attract. A range of 30 to 50 percent off appears to be enough to get people to buy.
- Online commerce continues to gain momentum. In 2010, 20 percent of shoppers said they would do much of their shopping through online channels. This year, it’s up to 30 percent. Small business strategy: If your small business doesn’t already have a thriving web presence, don’t delay. Now’s the time to upgrade your website, making it easy to navigate and easy for consumers to order the products they want without hassle.