What the Holiday Shopping Season Means to Small Businesses
A panoply of bright gold and silver gifts awaits visitors to this year’s Oglebay Institute’s Holidays at the Mansion, where Edgington Studio has partnered with The Jeweled Bird to bring some Christmas magic to the mansion’s Federal Dining Room.
Brightly colored lights, a sense of anticipation in the air, and fun (if occasionally annoying) music heard only one time of the year: these are a few of the reasons why so many people love the winter holidays in the United States. We associate positive emotions with it, fondly recalling time spent with families and partaking in fun seasonal activities. Businesses look forward to this time of year as well, as they rely on it to ensure their calendar year has been a profitable one. If you have ever wondered about the origin of the “black” in Black Friday, that much-hyped sales holiday, it stems from the fact that many retailers view it as the point at which they are profitable, or “in the black”, for the year. While this varies from company to company, it is true for all businesses both great and small that sales in the last few months of the calendar year are incredibly important to their continued success.
It should be noted, however, that there is a drawback to this sort of “sales concentration” that takes place: shoppers tend to purchase more products to serve as gifts for others around this time of year, which inspires retailers to offer greater deals to ensure the largest portion of customers choose to patronize their particular establishment, and these ever-improving deals drive even more people to not only shop more overall in November and December, but to also put off spending they would have historically done in September and October. After all, who would spend $1000 on a TV when there is a good chance you can get it for $750 on Black Friday or Cyber Monday in a few weeks? This cycle strengthens annually, making retailers ever-more dependent on this season and often shifting the perspective of customers from seeking the perfect gift to seeking the perfect deal.
Small businesses find themselves placed squarely in the middle of this challenging decision: should they go with the flow and emphasize seasonal deals like many of the big box stores, or stick to providing the same excellent value year-round albeit without the deep discounts? There are arguments to be made for both. If customers are already in a deal-oriented mentality, it stands to reason that by enticing them with your own discounts you could increase revenue, albeit with smaller margins. On the other hand, customers will likely remember next year what you did the previous year, inclining them to put off purchases until you bring those deals back into play (especially shoppers who bought something from you at full price a few weeks prior to your sale!). By avoiding entering this cycle of discounts, you could prevent this from happening, though you also run the risk of missing out on sales to competitors who have taken the discount route. Many split the difference by offering modest sales, just enough to pique the interest of shoppers and get them in the door.
No matter the approach, the holiday season is a lively period for every business. With the emphasis on shopping getting earlier and earlier each year, what was previously a sprint has morphed into a marathon for buyers and sellers alike. To those about to shop, we salute you, and don’t forget to pace yourself!
