American Express - Holiday Pulse: Businesses See Holiday Sales as Stepping-stone to Growth

The holidays are here, and small and medium-sized businesses (SMBs) expect strong sales during the season to power their growth in 2017. This and other findings from the American Express Holiday Growth Pulse reveal a generally optimistic outlook among business owners.

The Holiday Growth Pulse, an American Express survey of more than 1,500 small and midsize businesses, also finds that 6 in 10 small retailers believe their holiday sales will be stronger this year than last, while 81 percent of midsize firms say this. Business owners in both segments say the holidays will set the tone for the year ahead: Fifty-nine percent of small retailers say their growth next year is contingent on a successful holiday season, while 89 percent of midsize retailers agree.

Success during the holidays and beyond depends on taking the right steps to seize opportunities and close sales. Here are some of the ways SMBs in the report say they plan to do this:

Ring up sales with discounts

To help capture the sales that they expect, SMBs will offer special deals and promotions. Sixty-four percent of the small retailers surveyed — and 88 percent of the midsize ones — say that they’ll need to be more aggressive in this area to gain an edge on competitors. Many of these businesses also plan to get a head start: Of the two-thirds of small retailers that will offer holiday discounts, 42 percent say they’ll begin running them earlier than last year.  To promote their deals and engage customers, the vast majority of small retailers (89 percent) will tap social media, with Facebook being the most popular platform.

Hire to meet demand

Adding staff for the holidays is another priority for many retailers, but whether or not they will do this depends on size. While more than three-quarters (77 percent) of midsize retailers plan to hire additional staff, less than one-third (31 percent) of small shops do. This isn’t surprising, given the higher percentage of midsize firms that see their growth next year as dependent on their holiday sales. It may also be that midsize retailers are better equipped than smaller ones to take on additional staff.

Give a big ‘thank you’ to customers

Perhaps fueled by their sunny expectations, business owners across industries say they’ll spend more on customer gifts this year. This is a wise move: It shows customers you appreciate their business, and it reminds them you’re there to serve them in the year ahead. Seventy-one percent of small companies plan to buy holiday gifts for their customers, and they say they’ll spend $6,700 on average — 25 percent more than in 2015. An even greater share of midsize businesses — 87 percent — say they will buy customer gifts.

Give back to staff

Business owners also plan to be more generous to their employees this holiday season. For example, the 69 percent of small businesses that will host a holiday event for staff expect to spend $3,000 on average — a 43 percent jump from last year. Most SMBs also plan to recognize employees’ efforts through holiday bonuses. Fifty-four percent of smaller firms plan to give amounts equal to less than 5 percent of employees’ annual salary, while 26 percent expect to give larger bonuses. Among midsize firms, 37 percent say they’ll give less than 5 percent of employees’ salary, while 51 percent plan to give more.

How SMB owners fare over the coming weeks may well set the tone for the year ahead. Stepping up your efforts now to engage customers and reward employees can lay a strong foundation for your continued success.