Small businesses across the state are in the midst of what’s often the busiest time of year. However, customers have a lot of choices of where to shop during the holiday season, including big-box stores like Walmart and e-commerce sites like Amazon.
In order to attract customers, small retailers may need to consider selling online and strategically marketing their products this season, said Rebecca Lobina, director of the Small Business Development Center at Northwest Missouri State University.
U.S. shoppers are expected to spend an average of $1,652 this season, 14% more than last year and the most since before the pandemic, according to a recent Deloitte survey.
The percentage of consumers doing their shopping in-person also is expected to return to pre-pandemic levels, according to the survey. However, 63% of spending is expected to occur online.
Because consumers are shopping, the holiday season is the time to spend marketing dollars, Lobina said.
“If they don't know you're there, they can't buy from you,” she said. “So if there was ever a return on your investment it would be during this season.”
Missouri Business Alert interviewed Lobina during a virtual event earlier this month about what small retailers should consider to maximize sales during this time of the year. This conversation has been edited for length and clarity.
Missouri Business Alert: I know the pandemic forced many businesses to move online. How important is e-commerce to profit during the holiday season?
Rebecca Lobina: It's vital. It truly is vital. I know that there are some small businesses that have historically been able to get by without having an e-commerce presence. However, you're gonna see fewer and fewer of those because you have companies, Amazon in particular, that continue to make it more convenient, free shipping, all that good stuff. Some of the vendors on Amazon even will gift wrap for you. So they kind of bring the whole package, with the exception of actually going in and touching and feeling the product that you're purchasing. So, I say if you can't beat them, join them.
MBA: What are some of the best methods for small retailers to market their products or any sales they're having?
RL: I would definitely recommend that they start with their existing customer base. Hopefully, they have a way to reach out to that base, whether that's via email, or that they've gathered throughout the year, or texting them, or even just on their social media sites. … But something else that comes to mind that a lot of small business owners aren't doing yet is utilizing AI in their marketing tactics. Because it really takes the burden off of the small business owner from having to be the super creative one, or come up with lots of different ideas, or lots of different ways to say the same message. That's what an AI chatbot on your phone can do for you in seconds.
During the season when small businesses are super busy and are trying to get busier to bring in additional sales, AI can be a lifesaver in their marketing tactics. They can use it for emails. They can use it for their social media content. They can use it in flyers that they're posting. Anywhere that there's words, AI can be used.
MBA: I realize this isn't a one-size-fits-all answer. But I am curious, how much do you recommend small businesses spend on advertising during this time of year? Is there some sort of formula or consideration for that?
RL: Most businesses, small and large, spend about 1% of their total revenues on advertising throughout the year. That's average throughout the year, but the bulk of that really should be spent during the last quarter of the year. Because that's when people are definitely out shopping, right? They're buying; they're opening up their wallets and purses. And so you really have to capitalize on that.
