The Biggest Challenges Small Businesses Face Around the Holidays
With the holiday season comes festivities, joy, and the charitable spirit of gift giving. Small business owners may not share this sentiment, as this time of year especially can cause a great deal of stress in terms of keeping your business up and running efficiently. It’s important to keep tabs on some of the key pain points that may burden your business so you are prepared for any issues as they come.
We see it through Black Friday, Small Business Saturday, Cyber Monday, and other “shopping holidays.” One way businesses love to stay competitive is by slashing their prices. Unfortunately, when this turns into a back-and-forth between competitors, all that you are left with is razor-thin margins no matter how much you sell. While the pricing of your products is a serious consideration that should be driven by data and competitive benchmarking, making it the only thing that differentiates your product is a poor marketing strategy that is guaranteed to perform poorly once you start looking at your profit numbers.
To avoid going down the price-reducing rabbit hole, you need to pay more attention to your marketing efforts. In the hyper-competitive landscape that is the small business world, how your customers view and experience your product online can no longer be an afterthought. A rich understanding of your buyer persona and proper segmentation of your target market is the key to differentiating your products beyond succumbing to holiday season discounts.
It is a given that many employees will ask for PTO in the coming weeks, exacerbating an already concerning employee and labor shortage. Businesses don’t survive if there aren’t enough people running day-to-day operations.
There are a couple of different strategies to consider with employee shortages. First off, it is essential to have a system that tracks employees’ time off. Proper communication is key, and not knowing who is out of the office on which days is setting yourself up for failure. It is also wise to develop an effective training plan for new employees that teaches them the essentials they need to know to get work done. You should expect high employee turnover in the holiday season, especially since the hiring of seasonal workers peaks this time of year. When small business owners cite employee shortages as one of the biggest reasons they go under, creating an effective way to onboard new faces as soon as possible is an absolute necessity.
40% of Americans say the rising inflation rates will change their shopping and buying habits during the holiday season. With the rising costs of, well, everything, Americans started their gift search earlier this year and will look to buy fewer gifts, prioritizing those that are more heavily discounted.
There’s not much small business owners can do to fight inflation besides cutting prices. However, given the trend of consumers starting their gift search earlier, it would be advantageous to stock up on supply earlier than you might have in previous years. Another suggestion is to include a “buy now, pay later” option as a workaround for inflation shopping habits that is also largely convenient for consumers.
Rising use of eCommerce
If the COVID-19 pandemic taught small businesses anything, it’s that consumers are increasingly utilizing eCommerce and online shopping. During the holidays, the long lines and crowded malls could be a strong deterrent for customers, and the ability to purchase gifts through a laptop from the comfort of their homes is a convenient solution. For small business owners, that means you need to have a competitive website in the online business world.
There are several ways to optimize the shopping process on your eCommerce website. Products should be easily found once customers land on your website, whether they are browsing on mobile phones or personal computers. You should also continuously monitor your website for broken links or errors that customers report.
The navigability of your website is a top priority, but optimizing the speed at which pages load is key as well. Studies show that half of shoppers expect website pages to load within 3 seconds. Slow websites could cause frustrated customers to click away. So, if you’re noticing relatively high bounce rates on an otherwise updated website, slow loading speeds on your landing page could be the culprit.
If your website utilizes a shopping cart feature, it is possible to send “abandoned cart emails” to those who added products to their cart but did not purchase yet. Retargeting efforts such as these are highly effective at converting interest into sales. Within this shopping cart, adding an area for coupon codes and continuously dropping new sales could be the key to converting visitors to purchasers.
You can also take advantage of the eCommerce trend to bolster your email marketing reach and effectiveness. This is done through email captures, where you provide visitors a snippet of value-adding content or resources in exchange for their email. Examples include signing up for a newsletter or entering your email in exchange for some sort of template. Email marketing is a tried-and-true strategy that still performs well when it comes to engagement, and eCommerce can help you expand your list of email subscribers.
Supply chain issues
A combination of natural disasters, lingering effects of COVID-19, and foreign conflicts make it difficult to have appropriate inventory levels, especially with increased demand during the holiday season. For each business, there’s also a specific intersection between vendors and manufacturers that poses unique supply shortage issues.
Understanding your industry and business is crucial so that you can predict how the trends around inventory shortages will play out over the course of the year. Being proactive in this regard and understanding when supply is plentiful or dwindling helps you make conscious decisions about when to stock up and when to refrain from purchasing supply.
The holiday season does indeed bring new challenges for small business owners. While it could be vicious to those who are unprepared, the owners who understand how to plan out and prepare for this time of year can differentiate their brand and products, truly standing out from their competitors. If more funding is what you need to mitigate some of these issues, fill out our 3-minute application and see funding in your account within 24 hours!