As the holiday season approaches, small business owners are preparing for a period that could make the difference between winning and losing. A whopping 60% of small to medium-sized businesses (SMBs) contribute up to half of their annual revenue to this quarter, according to a new report from Constant Contact, a leading provider of digital marketing tools. This huge financial impact makes it more important than ever to adapt to economic pressures and changing consumer behavior.
The report surveyed more than 1,800 small business owners across the US, UK, Australia and New Zealand and found that one in three owners feel the greatest pressure on their bottom line during this critical time. The retail sector is feeling this pressure particularly acutely, with nearly 47% of owners expressing concern. But despite these pressures, 77% of resilient SMB owners remain confident in their ability to meet their annual revenue goals.
Smita Wadhawan, Chief Marketing Officer at Constant Contact, emphasized the importance of strategic adaptation. “The holiday season is the most important time of the year for small businesses, accounting for up to half of annual sales for 60% of owners.” Wadhawan noted that small and medium-sized businesses are responding to the pressure by quickly expanding their marketing efforts. According to the study, the number of businesses launching new marketing campaigns will surge from 7% in 2024 to 33% in 2025.
This new focus on marketing uses different tactics than before. Nearly 60% of business owners plan to increase the frequency of their marketing communications. A standout statistic shows that 40% of small businesses see social media marketing as their most influential channel for success, far surpassing email marketing, which ranks highly at just 18%. Discounts and sales continue to be the most effective promotional strategies, with more than half of participating companies using these tactics.
Last year’s holiday marketing initiatives were reported to be successful for 81% of SMB owners, primarily leading to increased sales and new customer acquisition, highlighting their potential for success in the current climate. However, economic constraints remain a concern. The report identifies inflation and rising costs as the key external challenges, reported by 32% of owners, followed by weak consumer spending at 22%.
Internally, companies are struggling with customer engagement issues (39%), budget constraints (36%), and difficulties creating new content (34%). In particular, 46% of small and medium-sized businesses claim they have been negatively impacted by recent tariff policies and are considering cutting costs or raising prices, which could further deteriorate customer relationships.
On the consumer side, economic concerns drove shopping behavior. Nearly 70% of shoppers are actively looking for discounts and promotions. But there is a silver lining. Consumer loyalty remains strong, with 72% of shoppers returning to the same small business each holiday season and 88% indicating they are likely to become repeat customers after a holiday purchase.
Small business owners should be aware of these dynamics when planning their vacation strategy. The insights presented in the Constant Contact report serve as both guidance and warning. Balancing budget constraints with marketing efforts and keeping customers engaged can be a challenge, but it also presents an opportunity to build loyalty and increase sales.
With the holiday season quickly approaching, leveraging social media and discount strategies can be the key to effectively leveraging sales. “Providing the efficient, simplified marketing solutions small and medium-sized businesses need to successfully execute these new strategies is at the heart of Constant Contact’s mission,” Wadhawan said.
Although great challenges are expected, it is clear that those who adapt and strategize effectively can reap significant rewards this holiday season. For more insight, check out the full report on the Constant Contact website. original report.
