Small businesses prepare for discreet holiday shopping

NEW YORK (AP) — Small businesses are hitting shelves early this holiday season, waiting to see how much inflation-weary shoppers will want to gift.

Holiday shopping has been relatively strong over the past two years. This is because shoppers have turned to online shopping, aided by the pandemic stimulus package. According to the National Retail Federation, sales in November and December average about 20% of annual retail sales, making the holiday season an important time for many retailers.

Small businesses are gearing up for a calmer season this year as some Americans spend more cautiously. His global consulting firm, AlixPartners, forecasts year-end sales to rise 7% from his 4%, well below last year’s 16% growth. If inflation exceeds his 8%, retailers will face a decline in real sales.

In preparation, owners say they are ordering inventory early to avoid supply chain issues that have frustrated the holiday season for the past two years and to ensure inventory is available early. They are stepping up discounts wherever possible in the face of rising costs. Owners also hope to see more people shopping in stores and at holiday markets after more online shopping during the pandemic.

For two years, Max Rhodes, CEO of Faire, an online marketplace used by small businesses to wholesale merchandise and buy merchandise for retailers, has struggled to stock up on enough holiday inventory in time for Christmas. said he was looking at a previous order from a merchant who had As COVID-19 lockdowns forced factory closures, driving up costs and a shortage of shipping containers and carriers, stores were forced to sell everything from holiday decorations to gift items. faced shortages.

U.S. business logistics costs will surge 22.4% in 2021 to reach $1.85 trillion, according to a study by the Global Consulting Firm Kearny’s Supply Chain Management Professional Council.

“And then there’s a little hangover, and a little bit of fear,” Rhodes said. This puts him two weeks ahead of last year and eight weeks ahead of 2020, Rhodes said.

“One thing we are sure of is that it’s not predictable…we really don’t know what to expect. Our retailers feel the same way.” said Rhodes.

Mat Pond operates The Epicurean Trader in San Francisco, which includes four physical stores, an online shop, and a corporate gift basket business. For the past few years, he’s started stocking up in November, but this year he’s already stocked up on items like gourmet food, chocolate, wine, and giftware. I’m also seeing early orders for

“Everyone plans ahead,” Pound said. “I think everyone has learned from the last two years.”

Although the economic impact of the pandemic has subsided somewhat, consumers are now being matched by high inflation and rising interest rates. Overall, spending has held up, but some Americans have been forced to pull back on discretionary items, and with consumer spending accounting for his 70% of economic activity, any decline also makes sense.

Hannah Nash, owner of online jeweler Lucy Nash, expects sales of her earrings, bracelets and other gemstones to slow after two years of strong growth. Main cause: Inflation.

“The average person has less money, and their cost of living is expected to affect how much they can afford to spend on holiday shopping,” Nash said.

Based in Indianapolis, she started her business during the pandemic, when online shopping boomed. According to Mastercard SpendingPulse, which tracks all types of payments, including those made by cash and debit cards, the share of total retail sales made online will jump from 11.5% in 2019 to 17.7% in 2020, up from 17.7% last year. rose again to 18.8%.

Nash offers bundles to enhance discounts and attract shoppers. Her plan includes discounts from her 10% to her 15% for new customers this year, starting in November. She also offers product bundles that are about 20% cheaper than when she buys the items individually.

Big retailers such as Amazon and Walmart also offered holiday sales to cash-strapped Americans earlier this year. And the average order value was $46.68, $13 less than what shoppers spent during the company’s Prime Day sale event in July.

Some business owners want to take advantage of the shift to holiday markets and brick-and-mortar shopping.

Kimberly Behzadi runs Read It & Eat Box in Buffalo, NY, selling themed boxes with food and books in each box. She started her business in 2020 during the pandemic. She has her shop online, but hopes to see sales increase as her market returns to full capacity for the holidays. She relies heavily on holidays, with 40% of her annual income occurring between her October and her December.

She plans to open six markets this year, with two more applications pending.

“Last year holiday markets were still restricted by the safety protocols required for Covid-19. We expect to double our revenue.”

Behzadi is also planning more promotions.

“With high inflation this year, we expect consumers to want deals, so we adjusted our holiday strategy to include more bundles and deals,” she said. said. For example, she’s offering her $60 box bundled with her $25 blind her dating book on her Fridays in Black.

Mariana Leung-Weinstein sells alcohol-infused jams, marshmallows, and other farm-inspired gifts in nearly 25 stores through her Wicked Finch Farm brand in Poring, NY, which she launched in 2019.

“This time around, I think people will enjoy seeing and touching things in person, so I’m more focused on getting my products in physical stores in time for the holidays.” she said.

Copyright 2022 The Associated Press. All rights reserved.

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