Why it matters:
- While overall retail sales are expected to increase 3% to 4% this holiday season, many consumers are saying they are planning to spend less, meaning there’s more competition for share of wallet.
- With more consumers describing themselves as value seekers, it’s important to be viewed as an “MVP” – “more value for price” – brand or business.
- Nearly one-third of consumers said reviews and ratings influence their buying decisions more than price.
Businesses that depend on holiday sales are facing a mixed forecast this year.
Most forecasts thus far are predicting overall holiday sales growth of roughly 3% to 4%, based on growth in disposable personal income, with even more robust e-commerce gains of 4% to 9% expected.
Yet many consumers, in surveys, are saying they are worried about rising costs for necessities such as food or housing and that they plan to reduce their holiday spending.
Researchers are expecting consumers will shift their spending, rather than reduce it. It is more important than ever for small businesses to be aware of those shifting spending patterns in order to win on Small Business Saturday on November 29 and beyond, experts say.
Here are key takeaways from consumer data that small businesses can leverage to their advantage.
Consumers are looking for brands and businesses that deliver ‘MVPs’ – more value for price
More consumers are becoming MVP shoppers – meaning they are looking for “more value for price,” according to research by audit, consulting, and advisory firm Deloitte.
Deloitte reports that even high-income consumers are value seekers, with 1 in 4 households earning $200,000 a year or more fitting that profile. But value for those customers isn’t just the number on the price tag.
MVP, or “more value for price” brands, provide benefits beyond a price tag, such as quality, trust, and experience, according to Deloitte.
Shoppers are less loyal, more selective, and increasingly guided by signals of trust. Price can still prompt a switch, but it is reviews, reputation, and AI-driven recommendations that now close the sale.Dom Scarlett, Research Director at Salsify
Deloitte researchers reviewed over 5 million household transactions and found up to a 2% household share shift to MVP brands.
Small businesses are well positioned to compete for the MVP shopper, Mike Daher, Deloitte’s U.S. consumer industry leader, told CO—.
“If they can’t compete on price, there’s a lot more that they can do that creates that special experience for consumers,” he said.
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Positive reviews outweigh price in purchasing decisions
The Q4 Ecommerce Pulse report from tech platform Salsify and the Digital Shelf Institute found that twice as many consumers (32%) said ratings and reviews were the most important factor in their buying decisions, compared to the 16% who cited price and availability.
“Shoppers are less loyal, more selective, and increasingly guided by signals of trust,” Dom Scarlett, Research Director at Salsify, said in releasing the report. “Price can still prompt a switch, but it is reviews, reputation, and AI-driven recommendations that now close the sale,” she said.
Small businesses can leverage these findings by asking their best customers for reviews and by making sure those reviews are easily available online.
For Small Business Saturday, a day when new customers may be shopping in a store for a first time, having a “Here’s What Our Customers Are Saying” display with photos of customers and comments about purchases they made is a good way to create an easily accessible, physical version of online reviews.
With physical stores remaining popular, lean into your in-store advantage — particularly to woo Gen Z
Some good news for small businesses with physical locations is that brick-and-mortar shopping continues to be where Americans spend most of their money during the holidays and throughout the year.
Salesforce reported in its holiday forecast that physical stores ranked second among places where consumers plan to shop this holiday season, just behind online marketplaces. Salesforce noted in its report that in 2024, according to data firm Statista, 83% of all sales were made in brick-and-mortar stores.
Gen Z shoppers are particularly sold on physical stores, with 2 out of every 3 Gen Z shoppers planning to shop there during the holidays. For every $1 Gen Z spends online, they are expected to spend $3 in a store.
Gen Z shoppers surveyed by Salesforce said they like stores because they can get items immediately, they can touch and feel the merchandise, and they can discover new things because stores are easier to browse.
Businesses should highlight those advantages in their Small Business promotions and holiday advertising and social media posts.
Buying local takes on added value this year
Several surveys are showing that concerns about tariffs and potential price increases are causing consumers to be more mindful of where the goods they purchase are made.
Research and analytics company YouGov reported in September that a third of consumers (33%) say they are more likely to prioritize made-in-the-U.S. products this holiday season.
A survey released by tech company o9 Solutions showed 26% of U.S. consumers plan to buy fewer imported goods during the holiday season due to tariff price hikes.
Main Street shops and other small businesses, because they are based locally, have long had the edge over mass retailers when it comes to partnering with local artists, craftspeople, bakers, or farmers to sell their goods. This year, it is especially useful to highlight local products, as well as made-in-the-U.S. products, in ads and social media posts.
Capitalize on consumers’ shifting spending toward experiences
Retail real estate and shopping center trade group ICSC, in its annual holiday intentions survey, found that more people are planning to give experiences as gifts this year. The number of consumers who said they plan to give experience presents, such as tickets to movies or other activities, increased by five percentage points to 21%.
And 1 in 3 consumers said they plan to spend more on experiences this holiday season compared to last year, according to the ICSC.
Small businesses that provide services, such as spas, salons, or gyms, can leverage this trend by offering their treatments or classes as holiday gifts.
“It’s clear from our research that economic factors aren’t just shaping consumer sentiment – they’re directly impacting where and how consumers shop,” said ICSC President and CEO Tom McGee, in a statement.
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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