Two Things to Expect for Holiday Spending in 2022

The holidays are a critical time for small businesses. According to the National Retail Federation, holiday sales account for 20 to 30 percent of many small retailers' annual revenue. With that in mind, it's no wonder that small business owners are always looking for insights into what customers will be spending during the holiday season. 

While it's still too early to know for sure what holiday spending will look like in 2022, there are a few trends that we can keep an eye on that may give us some clues. Here are a two things that small business owners should keep in mind as they start planning for the 2022 holiday season.

Online Shopping Will Continue to Grow

One trend that is almost certainly here to stay is the growth of online shopping. In 2020, e-commerce sales reached $790 billion, an increase of 44 percent from 2019. This trend is only expected to continue in the coming years, with e-commerce sales projected to reach $1.8 trillion by 2023. 

What does this mean for small business owners? First and foremost, it means that having a strong online presence is more important than ever before. If your small business doesn't have a website or if your website is outdated, now is the time to invest in an update. In addition, you'll need to make sure that your website is optimized for mobile devices and that your checkout process is quick and easy. 

You'll also want to make sure that you're taking advantage of social media platforms like Facebook and Instagram to drive traffic to your website. By using platforms like these to create attractive ads and postings, you can reach a larger audience and generate more interest in your products or services.

Consumers Will Be More Price-Sensitive

Another trend that is likely to impact holiday spending in 2022 is increasing price sensitivity among consumers. After months of post-pandemic related financial uncertainty and inflation, many people are feeling more cautious about their spending habits. 

What does this mean for small businesses? It means that you'll need to be extra careful about your pricing strategy during the holidays. Many customers will be looking for deals and discounts, so make sure you're offering competitive prices on all of your products and services. It's also important to remember that customer service will be more important than ever during the holidays; even if your prices are higher than your competitors', providing excellent customer service can help you win over price-conscious shoppers. 

The 2022 holiday season is still several months away, but it's never too early for small business owners to start planning their strategies. By keeping an eye on trends like the growth of online shopping and increasing price sensitivity among consumers, you can position your small business for success this holiday season.