Intuit QuickBooks Report Reveals Holiday Spending with Small Businesses Could Hit $88 Billion Despite Fragile Consumer Confidence
Despite continued macroeconomic challenges facing consumers and small businesses, a new Intuit QuickBooks survey shows that consumers plan to spend 40% of their total holiday budget at small businesses, representing an $88 billion opportunity. These findings and more are highlighted in the QuickBooks Holiday Shopping Survey, based on a recent survey of 5,500 consumers and 1,500 businesses commissioned by Intuit, the global financial technology platform that makes TurboTax, Credit Karma, QuickBooks, and Mailchimp.
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The report highlights consumer and small business plans for the upcoming holiday season, including an expected increase in consumer spending compared to last year, with small businesses the main beneficiary. This comes at a period when inflation is making consumers more price-sensitive. Small businesses are also predicting increased sales, with about 70% forecasting more revenue this holiday season compared to 2021. And about 80% of the small businesses surveyed say the 2022 holiday season is more important to their overall financial health than last year.
“The holiday season is always the biggest time of the year for our business, but this year it is incredibly important for us to hit sales. Due to challenges in the marketplace such as higher supplier prices and supply chain issues, this holiday season is definitely a make or break for us,” said Anthony and Courtney Bui, founders of The Long Dog Clothing Company in Torrance, California.
Challenges Facing Small Businesses this Holiday Season
Given the economic climate, small businesses rank hiring and supply chain challenges as top factors that may impact holiday sales goals. According to the QuickBooks survey, 70% predict inventory or product shortfalls, and 90% are experiencing shipping and fulfillment woes.
With more than half of consumers’ shopping budgets expected to be spent online and 70% of consumers shopping more online due to inflation concerns, small businesses need to have a strong omnichannel sales strategy. Consumers surveyed said quick-and-easy checkouts and online payments are the top features they desire from an online shopping experience. Consumers also say they will spend even more money at small businesses that offer holiday promotions and discounts, and fast, affordable shipping options.
“To capture consumer spend, small businesses should embrace selling online across multiple sales channels, staying ahead of the game in procuring and effectively managing inventory, and delivering seamless shopping and shipping experiences,” said Shilpa Reddy, vice president of QuickBooks Commerce.
Additionally, consumers’ desire for experiences is increasing this holiday season. They want to do things they couldn’t during the pandemic, with 41% expecting to spend more on experiences this year because they finally feel safe to do so. This could be a boon for small businesses in the entertainment and dining industries, as well as service-based businesses overall.
QuickBooks has created a special holiday hub to help small business owners with the tools and resources they need to thrive and grow. For more information, small businesses can visit https://quickbooks.intuit.com/r/holidays.
QuickBooks and Mailchimp Can Help Small Businesses Succeed
The QuickBooks platform helps small businesses better manage their finances and business operations year-round, with a suite of integrated tools ideal for holiday sales planning and management. Mailchimp, an email and marketing platform enables small businesses to find and engage customers across email, social media, landing pages, and advertising. With e-commerce projected to make up at least 50% of all consumer holiday shopping this year – up from 2021 levels – here are some tips for small businesses to optimize sales.
- Make shopping online easy with a simple, integrated checkout experience: More than seven out of 10 consumers want small businesses to make it easy for them to buy online this holiday season. Additionally, they say they’ll shop more with small businesses whose checkout experience is quick and easy.
To improve customer checkout, small businesses can implement an integrated payments solution like QuickBooks Payments, accepting customers’ payments in every way they want to pay with online invoicing, mobile payment apps, and in-person card readers. Additionally, for those customers who don’t quite make it to checkout, businesses can use Mailchimp to set up Abandoned Cart Automations that remind shoppers to complete a purchase.
- Diversify revenue while keeping inventory up-to-date: It’s important for small businesses to not just sell online, but to sell across multiple channels. The QuickBooks data shows that consumers use third-party e-commerce sites and social media marketplaces as often as small businesses’ own websites.
The importance of diversification of sales channels is also true for brick-and-mortar small businesses: up to one in two consumers say they are less likely to buy from a small business in person if they can’t find them online. Once selling across multiple channels, small businesses can use QuickBooks Commerce Accounting to help track sales and inventory in one place. Keeping consumers updated on inventory will be especially crucial, as up to three-quarters of consumers are worried about product shortages this holiday season.
- Offer discounts where possible: Given consumer concerns about inflation, shoppers will be particularly price-conscious this holiday season. Where possible, small businesses should look to offer discounts. This can be a particularly effective strategy to drive in-person sales: the data shows that in-store experiences and exclusive discounts will entice more people to a small business.
Small businesses can leverage data insights from QuickBooks Online and QuickBooks Commerce Accounting to help identify the best products and sales channels to offer discounts. With Mailchimp, small businesses can turn their marketing data into personalized messaging to reach customers with the right discount at the right time.
- Remind consumers you’re local while spotlighting quality and service: The data shows consumers like to buy from small businesses because it supports their local economy. Further, more than 70% of consumers surveyed say they get the best service and quality from small businesses.
For these reasons, when looking for unique holiday gifts, roughly two-thirds choose small businesses, such as local gift shops, over large businesses. Remind consumers of your local ties and commitment to high quality and service. One way small businesses can do this is through targeted marketing campaigns like those powered by Mailchimp.
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Editorial Note: This post is from a Company Press Release and may have been modified for clarity.