Consumers are planning to Shop Small this Black Friday weekend -- meaning that they will patronize small businesses -- and SMBs say they are ready for it.
But most are raising prices to deal with inflation and desperately need local customer support, according to the 2023 American Express Shop Small Impact Study.
Of the SMBs polled in this two-pronged survey, 88% say they require the support of customers in their community. But 72% have raised prices to cover their own inflationary pressures — not a great move, since 57% say this has made it difficult to retain or find customers over the past year.
Moreover, 58% feel the current economy makes it harder for them to compete against larger competitors. And 48% say budget constraints prevent them from implementing new technology to help them compete.
Despite all these hurdles, 85% of SMB owners are hopeful this holiday season -- and 66% believe sales will be better than last year’s.
In addition, 55% expect Small Business Saturday to make a significant contribution to their overall holiday sales, and 48% say the day is more critical than ever for their holiday business.
What are they doing? For starters, 65% are spending more time trying to find unique ways to reach new customers or retain existing ones. And 84% agree that updating their business model to reach new customers is a critical factor.
What’s more, 34% have explored ways to improve the customer experience online and 37% are looking to enhance the experience in-store. This would include investment in email systems.
It’s a wise investment: 83% say online improvements have made a big contribution to their sales, as do 86% who have enhanced their in-store side.
What do consumers want? Of the shoppers in this sample, 51% prefer to seek out small businesses than large retail stores or websites. And 85% plan to Shop Small, in part, during the season and 50% will do so on Small Business Saturday.
But this varies with age — 62% of millennials will Shop Small, and 75% will take advantage of specific shopping days, versus 65% of Gen X, 59% of Gen Z and 54% of Boomers.
And SMBs better have their technology in place: 45% of millennials and Gen Z will shop at small businesses if they have such technology as Augmented Reality. And 58% will shop small if small firms make use technology and small tools to make it easier.
Working with Teneo, American Express surveyed 502 small business owner/managers from October 3-17, 2023, and 1011 consumers from October 11-14, 2023 among a sample of 1,011 adults 18 years of age and older.
Consumer data was weighted by five variables -- age, sex, geographic region, race and education -- to ensure reliable and accurate representation of the total U.S. population, 18 years of age and older based on U.S. Census data.
The small business owner survey was conducted online among a sample of 502 small business owners/managers in the U.S. from October 3–17, 2023.