In a Nutshell

The 2010 Holiday Shopping Season

As Main Street programs are gearing up for the biggest event season of the year, small business owners are crossing their fingers that shoppers will search for those perfect gifts with them. From what I have been reading in the news, sales should be up this year… just a tad – so here are some predictions and advice for the holiday season.

According to NRF’s 2010 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, shoppers plan to spend an average of $688.87 on holiday-related shopping, literally a few bucks more than last year’s $681.83. ShoperTrak’s Retail Sales Estimate predicts sales in November and December will be 2.9 percent up from last year. ShopperTrak also learned that shoppers plan to spend more on consolidated shopping trips and that the Saturday before Christmas will be a popular shopping day for customers.

The NRF survey shows that 61.7 percent of shoppers say the economy will impact their spending, down from last year’s 65.3 percent. Major retailers aren’t expecting shoppers to overspend this season, and you’ve probably noticed that pre-Black Friday sales have already started – even Amazon had free shipping offers before Thanksgiving.  Many shoppers say they anticipate spending less (81.5 percent), doing comparison shopping online (30.9 percent) or with newspapers and circulars (28.1 percent), shopping for sales (54.1 percent), and using more coupons (40.6 percent).

So how should small business owners react? They should stick to their business plans and spend some time and money on marketing. Small business owners shouldn’t dive into offering deep discounts to compete with big box stores, but can leverage presentation, the convenience of bundling items, and perception of value makes shoppers feel like they are spending their money wisely. Tap into that.

Small business should deliver what they know their competition can’t. They should offer (and market) their unique and locally made gifts, special value gift packages that give shoppers a good deal (but not a steal!), excellent customer service (special offers for their best customers or adorable gift wrapping for free, perhaps), and a friendly and warm atmosphere. Not everyone can avoid chain retailers when crossing off items from their shopping lists, but when hot cocoa and a smile greats them at the door of a Main Street business, that experience will get talked about among friends – not the long lines, parking lot madness, and frenzied atmosphere at big box blow out sales. The survey mentioned above notes people are increasingly counting customer service as the most important factor in their decision making, and shoppers who touted quality as the overriding factor rose from 11.8 percent to 12.7 percent.

One other point to mention – the survey says most women already got a jump on shopping by Halloween, but young adults 18-24 will be getting a later start. Keep that in mind when using social media for marketing. Call them the Zappos generation – here’s another tip about this age group, they seem twice as likely to choose a business based on good customer service. You can also encourage local businesses to reward this customer group through social media “check-in” tools, like FourSquare.  

A survey by National Retail Federation Shop.org found that online retailers expect to see a 15 percent jump in sales. Traditional bricks-and-mortar businesses on Main Street who have e-commerce can boost sales by growing online sales, too. While it’s too late to build online shopping into a website for the holidays, local businesses that are online can spend some time increasing their web presence. Search engine optimization and using Google’s small businesses tools can help customers find them. They can also build a buzz and manage their reputation online by paying attention to what’s being said on customer review sites. The article I linked to above offers some other bits of advice, like offering fast and free shipping on orders that cost a certain amount that won’t destroy a small business’ margins.

What’s Hot

Personal electronics seem to be on everyone’s list. The Consumer Electronics Association says the customer demographic you want to be marketing to is in the $75,000+ income range. They are looking for MP3 players, laptops, tablets, eReaders, video game consoles, smart phones and external storage, in that order, and these accessories: memory cards, video game products, headphones/earbuds, carrying cases, and PC products. Their survey shows 66 percent of consumers plan to buy gifts from mass merchants, 60 percent at electronic specialty retailers, 40 percent at warehouse clubs, and 46 percent online.

As one NRF blogger points out last year was for buying the practical, but this year, a vacuum cleaner won’t do. Jewelry and splurge-worthy gifts are signaling to some that we might cautiously expect discretionary spending to be inching up. She also points out that shoppers also plan to treat themselves – so marketing nice gifts for the shopper as well as the person on their list could be a good strategy.

If you Google “hot 2010 holiday gifts” you’ll get lots of hits, so I won’t discuss them all. From fur vests to Squinkies, there are a lot of trends out there, and small business owners really can’t adjust their inventory too much at this point. But, here’s another idea for them. Another study from Big Research  mentions that in the weeks leading up to holidays, people are spending on homegoods to spruce up guest accommodations. So, this leads me to say that the neurosis of stressed hosts could be a great opportunity for local businesses to capture some extra spending dollars.