Small businesses are bracing for a challenging holiday season due to an unstable global economy and shifting consumer behaviours, a new study suggests.
According to the Small Business Now report by Constant Contact, a U.S.-based digital marketing platform, nearly 90% of small businesses have been impacted by inflation and just over half of consumers have reduced their spending at small businesses due to inflationary pressures.
The study, which polled more than 1,600 small business decision-makers employed at companies with 250 employees or less and 3,000 consumers across Canada, United States, United Kingdom and Australia, also found one-third of firms saying they feel the most pressure to drive revenue in the fourth quarter.
“Small businesses are incredibly resilient, but as they head into a holiday season filled with uncertainty, they must get proactive in their marketing to ensure success,” said Sarah Jordan, chief marketing officer at Constant Contact, said in a news release.
“Our study shows that despite inflation, shoppers still want to support small businesses, so the [companies] who thrive will be the ones who start their holiday marketing early, streamline their work with automations, and engage customers consistently throughout the season.”
In Canada, small businesses were the least likely among the four countries surveyed to have raised their prices. However, they were the most reliant on holiday sales, with about one in five stating at least half of their annual revenue is generated during the last quarter.
The study also found Canadian companies are significantly more likely than other regions to test new marketing tools or technology in preparation for a successful holiday season.
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Meanwhile, 56% of Canadian consumers say they have reduced their spending at small businesses this year.
Globally, the study found nearly 80% of consumers plan to shop for the holidays at a small business they have never purchased from before, while 99% said they revisit the same businesses each year to do their holiday shopping.