In the midst of a pandemic and a difficult year, holiday shoppers are focused on supporting their local small businesses. Seven in 10 consumers say it’s more important to support small businesses than to get the best deal, and four in 10 are willing to spend $20 more on a purchase to support them, according to new research from Union Bank.
According to the Union Bank Small Business Holiday Spending 2020 Survey, 74% of U.S. consumers feel an increased sense of responsibility to support their community this year and over half say they’ve already increased how much they shop and spend at small businesses to help keep them afloat during COVID-19. Even more compelling, 54% say they’re specifically planning to shop at minority-owned small businesses.
“Holiday spending is often the most significant financial inflection point for small businesses each year. However, this year will look much different, as many people continue to adapt to stringent closure guidelines and recover from the overall economic impacts of the pandemic,” said Todd Hollander, Head of Business Banking and Small Business for Union Bank. “Small businesses are the backbone of our local communities and sales during the holiday season are often critical to a business’s success. These survey results reinforce that our communities feel a sense of responsibility and are rallying to help businesses continue to recover and thrive through the 2020 holiday season.”
To gear up for the holiday season, small businesses have an opportunity to promote themselves, as 35% of U.S. consumers say that one of the biggest barriers to shopping at small businesses is a lack of awareness or little advertising. More specifically, when asked what drivers would make them more likely to spend at a small business this season, U.S. consumers cited the following as most important:
- 60% said offering holiday sales, discounts, promotions
- 51% said offering online ordering
- 46% said offering safety measures (mask requirements, social distancing, curbside pickup, local delivery, contactless payment, etc.)
“Now more than ever, small businesses need to tap into their entrepreneurial spirit and continue to be creative in implementing new strategies to keep consumers motivated to spend with them,” said Hollander. “Fortunately, it’s not too late to ramp up marketing efforts, including social media, to showcase not only any holiday specials but also any safety measures and conveniences that have been put in place. Consumers want to know they can support local businesses safely.”
The findings also indicate that this holiday shopping season will revolve less around big shopping events, with only one in five planning to do most of their shopping on Black Friday and/or Cyber Monday.
Despite U.S. consumers’ focus on supporting small businesses, the survey revealed some financial hurdles, as most consumers are planning to spend less this holiday season compared to last year – particularly on travel (62%) and restaurants (52%). The only exception is retail, where 49% of U.S. consumers plan on spending the same or more this year. The survey identified several specific financial factors affecting U.S. consumer holiday spending year-over-year, including one in four saying they’ve suffered a job loss or hour/wage reduction, and one in four saying they’re trying to save more.