SMBs Optimistic About 2015 Holidays
Retailers are confident in the upcoming holiday season according to new data from Bigcommerce.
In fact, a recent survey from the company shows that 48 percent of online retailers are “very” or “extremely” confident that this season’s holiday sales will outperform last year. What’s more, nearly 60 percent of businesses predict holiday sales will equate to more than 20 percent of annual revenues, with one-third of business owners surveyed expecting the holidays to drive at least 40 percent of total annual sales.
The study also sheds light on the most successful sales channels, revealing that 56 percent of retailers expect their online store to be the strongest performer, followed by marketplaces (15 percent) and brick-and-mortar stores (10 percent).
Despite the positive outlook on this holiday season, however, small businesses (SMBs) are still expecting higher marketing costs and more competition this year. In fact, the study reveals the top holiday challenges include rising marketing costs (18 percent), inventory management challenges (13 percent) and heightened competition from large online retailers (13 percent).
In preparation for the holiday season, 17 percent of retailers have plans to hire additional employees for the holiday season, which is an increase from last year. Of these business owners, 75 percent are hiring to expand their teams for order fulfillment capabilities to ensure accurate and timely delivery.
Additional data shows that just 14 percent of retailers are not planning to increase their marketing expenses this year. That said, more than 70 percent of retailers plan to focus on promoting their business through existing communities they’ve built on social media channels, while 45 percent plan to spend money on social media advertisements. Moreover, 60 percent of retailers plan to rely on their SEO-optimized channels to help them stand out, with more than 30 percent budgeting for search engine advertisements. Plus, 60 percent of retailers will leverage email marketing and 50 percent will rely on word of mouth marketing.
When it comes to promotions, the data shows that 58 percent of retailers will leverage percentage off discounts, 41 percent will offer free or expedited shipping, 29 percent will give a free gift with purchase, 26 percent will provide loyalty offers, 24 percent will leverage daily deal promotions and 22 percent will try to win customers back with abandoned cart offers.
Lastly, the data shows that 36 percent of retailers were not aware that shipping carriers will increase their prices for the holiday season, and 20 percent were unsure of how to handle this change. Twenty-one percent of retailers, however, plan to absorb the additional costs while 16 percent will modify their shipping quotes to customers.
Once the holiday season is over, many retailers note that they will use their revenue to reinvest in their business, with 61 percent saying they will budget for facility upgrades and savings for summer months and 45 percent saying they will purchase additional inventory for 2016.