A new Visa business holiday shopping study shows small to midsize businesses (SMBs) and consumers are both getting ready for a busy holiday shopping season despite the pandemic.
Researchers asked 2000 businesses and 4500 consumers in the US, Canada, Germany, Ireland, Hong Kong, Singapore, Brazil, and the United Arab Emirates about their plans for the 2020 holiday shopping season.
Consumers will shop online and local
In a search for normalcy, a large majority of global consumers (88%) plan to do holiday shopping, despite the challenges posed by the pandemic. Most consumers (52%), say they plan to do half or more of their holiday shopping online this season and 24% will try to support local businesses.
Visa found this holiday season, nearly half (48%) of consumers plan to do most of their shopping in-person, compared to 26% who plan to do most of their shopping online and 26% who plan to shop an equal mix of online and in-person.
That points to the need for SMBs to be ready for online and in-store shoppers with an omnichannel online marketing and in-store sales strategy.
Of consumers who have shopped online during COVID-19, 59% say they will continue to buy online for half or more of their shopping. 32% more say they will give digital gift cards this year, while 19% will purchase experiences like tickets, activities, or trips and 18% will purchase digital entertainment gifts.
Consumer payment preferences are also changing rapidly – 78% have changed the way they pay; and 63% will switch to a business that offers contactless payments.
Small Business Week support
During this National Small Business Week (Sept 20-26), Visa is deploying virtual Visa Street Teams to visit SMBs with “back to business” kits, packed with new ‘tap to pay preferred’ point-of-sales materials, branding, and educational resources. They’ve already visited more than 185,000 SMBs in 66 US cities and 15 markets.will
“Educational resources and community support are fundamental building blocks that will help small businesses get back to not only surviving but thriving,” said Kevin Phalen, global head of business solutions, Visa. “Visa has long been committed to supporting as many small businesses as possible. In the wake of the pandemic and preparing for the holidays, we are accelerating our efforts, amplifying our partnerships, and expanding our programs to help get the world back to business.”
Visa recently committed $200 million in relief funding over the next five years to combat the impact of COVID-19 on small and micro-businesses. A new online program, The Virtual Breakroom: Back to Business Learning Series, will offer three content modules, hosted on Visa.com and available on-demand via the Visa Small Business Hub. Programs launch on Sept 29 and cover topics including contactless payments, growing your business online, and digital marketing and reputation management.
Business gets online-ready for holiday shoppers
Most small businesses recognize the need for a digital strategy during the holiday shopping season and 76% claim they are ready to handle the hoped-for increase in holiday business.
SMBs are looking for ways to offset the impact of COVID-19, with 60% saying they’re taking steps to prepare for the holidays and more than a quarter (26%) digitizing parts of their business.
More than three-quarters (76%) of SMBs with an online presence see the winter holiday season as a sales opportunity, compared to just 33% of those without an online presence. 27% of businesses are planning to extend their business hours to handle the anticipated holiday sales this year while digitizing parts of the business operation (26%) and investing more in the physical infrastructure (19%).
Unique country differences
With businesses in the eight countries surveyed, there are a few unique differences worth noting:
- 84% of Hong Kong businesses and 78% of businesses in Brazil are optimistic about the holiday shopping season compared to 68% globally
- Only (14%) of US SMBs claim they are not ready to handle increased holiday sales with 24% planning to extend business hours
- 28% of Canadian businesses feel unprepared to handle the increased holiday shopping business while 31% in Singapore, 41% in Ireland, and over half (54%) of German businesses feel unprepared compared to 28% globally
- 48% of SMBs in the UAE (compared to 27% globally) expect to increase business hours and 35% expect to outsource some business operations to vendors (compared to 15% globally).
Industry experts sees success
Joe Jackman is the CEO of Jackman Reinvents and consults to retailers, brands, B2B companies, and investors on sharpening strategy and improving sales performance. He expects a relatively positive holiday shopping season despite the pandemic.
“Retail giants such as Walmart, Target, Bed Bath & Beyond, Dick’s Sporting Goods, and Best Buy will not open on Thanksgiving Day as they have in recent years. Target’s CEO has noted, perhaps recognizing criticism of retailers in the past, that employees can now stay home and enjoy Thanksgiving with their families. The move is generally seen as a way to limit in-store crowds during the ongoing COVID-19 pandemic. It’s not yet clear how stores will handle Black Friday, but this year the early hours that attract crowds will likely be less important than the week or more of online deals that will surround the traditionally busiest shopping day,” Jackman writes in a recent newsletter.
He said except for jewelry, consumers are expected to spend about the same as they spent during the 2019 holiday shopping season.
“Buying holiday gifts from the comfort of their couch has become the norm for many shoppers over the last few years. In 2019, consumers spent $24.6 billion online between Thanksgiving Day and Cyber Monday — a 14% increase from the year before. Experts are projecting record e-commerce sales in light of fears over being indoors this winter. In one survey, 66% of shoppers anticipate they will increase online purchases during the 2020 holiday season,” Jackman says.
All in all, the signs are encouraging for this year’s shopping season if businesses are ready to accommodate the consumer’s growing preference to shop online for more of their purchases than in the past.
A full summary of the Visa Back to Business Study Holiday Edition with data for each of the eight countries surveyed is available here.
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