How will Christmas and the Holidays Impact Small Businesses?

How will Christmas and the Holidays Impact Small Businesses? |FutureBusiness

There are lots of festivals, celebrations, and holidays in the latter half of the year, and Christmas is one of the big ones. There are both positive and negative impacts that the event and associated holiday days can have on small businesses.

Most likely, you will have had your seasonal strategy in place for some time now, but it’s important to be flexible to current world events, situations, and your local economy, as these external factors will all play a role in determining how your business performs, and whether you change your approach or not.

The Positive Impacts of Christmas on Small Businesses

People are much more likely to spend and be enticed to spend more with a bit of creative upselling at this time of the year, especially on goods and products that make fantastic gifts. Some customers may be looking for value for money and bargains, and others may look beyond the price for exclusivity, luxury, and items that match their moral and ethical points of view.

In 2022, it’s been estimated that holiday retail sales will reach around $942 billion in the US, and this trend of increased spending is seen across the globe.

With appropriate marketing and sales techniques, there is also the opportunity to promote slow-moving or difficult inventory items, which can free up storage space, reduce wastage, and improve cash flow. By placing these items in high-traffic areas (both in bricks and mortar shops and eCommerce platforms), and making them feel more exclusive or attractive, you have the opportunity to boost their sales.

The season can also see an increase in employee morale, especially when businesses take the time to appreciate their teams, arrange parties, and ensure a fair schedule for operations that are open across the festive period. It is important to remain inclusive and fair with your policies, and if you grant special time off for Christmas events, then you need to be open to doing the same for employees who have different beliefs or religious obligations.

With the spirit of giving being very much an overarching theme for the season, Christmas is also a great time to praise your staff and reward them for their work – this could be with praise and appreciation, or financial rewards or presents, but showing appreciation for your team, and generating a positive environment doesn’t just make a short term impact – employees will be more likely to speak positively about their experiences and recommend the business to others.

The Negative Effects

Unfortunately, as with anything in life, there are downsides to the Christmas season, and how businesses handle these issues is vitally important when it comes to operating effectively in the year to come.

Firstly, there is the additional competition – with every shop, store, and platform promoting their products and offers, it can be extremely difficult to stand out from the crowd and gain the attention of the paying customer. Deciding when and where to start seasonal advertising is a difficult decision – too early and it can lead to negative comments, but too late and it becomes less effective.

Pricing strategies and excessive bargains can lead to a race-to-the-bottom, with competing businesses attempting to outdo each other with their sales and offers – this is great for the consumer, who doesn’t need to spend as much, but it is not good for the business or the bottom line. A focus on value, unique selling points (USPs), and quality is a preferable strategy in order to get the best return on investment (ROI).

There’s also the issue of Christmas opening – if a business is opening over the seasonal period, it needs to be effectively advertised and marketed, and employees need to be on board with the scheduling.

Staffing issues over Christmas can be very difficult – if you’re choosing to close, and forcing employees to take mandatory annual leave, this can cause problems, especially for those who don’t celebrate the holiday, or can’t afford to lose the pay. When considering a festive schedule, it’s also important to take transport and accessibility into account – if you live in an area prone to cold weather, can your staff actually get in? Is it safe for them to do so?
if your team largely relies on public transport, then you need to check that sufficient services are actually running.


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Your Festive Strategy

We mentioned that you needed to look at external factors when working your festive period, and this is something that should continue right through the season – if you have a physical store, you need to monitor footfall and sales and balance it against your overheads and staff availability.

If you’re running an eCommerce operation, then you need to look at customer orders, and delivery windows. However you plan to manage this Christmas, we hope you have a highly successful one.


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