Digital Sales and Marketing Techniques Saved The Holidays For Small Businesses
For small retailers, the holiday season is the most critical time of year. Most retailers see a massive boost in sales during the year’s final months. And if they’ve had a tough year, retailers look to the holidays to cover the ground they’ve lost.
Of course, this year, more small businesses than ever before could fall under the “struggling” category. Seemingly overnight, the coronavirus pandemic put a halt on non-essential shopping trips. The economy was crushed, and small businesses were hit the hardest.
In August, the Canadian Federation of Independent Businesses (CFIB) estimated that 1 in 7 Canadian businesses would close due to the pandemic’s impact – that adds up to nearly 160,000 businesses. Yelp also reported in September that 163,000 businesses that used its service had shut down in the six months following the initial spread of COVID-19 in March.
Retailers that managed to hang on until the holidays realized that a successful winter shopping season would be crucial for survival. A major boost in sales could supply a much-needed push towards recovery. But disappointing holiday sales could be the final nail in the coffin.
When Customers Went Online, Savvy Retailers Followed
Small business owners realized they’d need to be clever and creative to win over holiday shoppers. Among the ones that thrived during the holidays, there’s a common denominator: they embraced the digital marketplace.
Before the pandemic, Revival in Iowa City was a hot spot for back-to-school clothing hauls among its college town residents. The pandemic hit the store with a one-two punch: restrictions on indoor shopping ruined sales, and the University of Iowa went exclusively online, meaning Revival would lose one of its peak sales periods.
Manager Maggy Moran and Owner Sheila Davisson knew they could not just simply “go digital” – they would have to embrace it.
Their student-heavy customer base moved online, and Revival followed. In the spirit of the store’s name, Revival moved their entire business online, and saw a massive increase in sales. They also recognized the importance of a personalized e-commerce experience. As the holidays drew closer, they launched a promotion in which customers could customize a holiday gift box, which they could assemble over email, phone, or even on a video call.
Giving consumers multiple ways to shop online has proven to be a worthwhile sales technique for retailers. In fact, Adobe Analytics reported that 40 percent of online shopping transactions during the holidays took place on smartphones, with the other 60 percent on laptops or other devices.
The Future Is Now
According to CFIB, more than 150,000 Canadian businesses have incorporated e-commerce aspects since March, and a third have begun to sell goods online.
Many of these retailers have entirely transitioned from physical to digital, which raises a question about the physical storefronts once filled with customers and goods: is physical space relevant to the digital market?
Retailers like Two Hands Paperie in Boulder, CO, used physical space to their advantage. They used their existing store as a curbside pickup location and purchased a new warehouse exclusively for online sales. The risky investment paid off. Over Black Friday weekend, the company saw an increase in online sales by 700 percent compared to the prior year’s weekend. The company’s total sales – digital and physical transactions combined – were higher than last year’s.
The transition to e-commerce isn’t just helpful for the holiday shopping season, or even the pandemic. It’s likely that the shift towards digital shopping reflects what will continue in the future.
Gepetto’s, a toy store in San Diego, went digital in August. Their website had previously existed as a marketing tool, but they enhanced it and added online shopping features. Since then, they’ve seen digital sales double each month.
If that trajectory continues in 2021, the importance of incorporating digital sales techniques will be clear. According to CFIB, it will take an average of one year and five months for Canadian small businesses to recover from the pandemic’s effects, but some have it worse: the hospitality sector will need eight years to recover. For small businesses that have scraped by, working towards strong digital sales might be the clearest pathway towards recovery.
Shopify and Etsy – Two of the Most Prominent Companies on the Digital Market – Offer Glimmers of Hope
Shopify, which has been pivotal to many businesses’ ventures towards e-commerce integration, reported a huge uptick in sales over Black Friday: a record $2.4 billion in sales, which is a 75% increase from last year. Meanwhile, Etsy’s November sales increased by 108% from 2019 to 2020. Interestingly, Etsy CEO Josh Silverman told CNBC that the top search on its web platform was “personalized gifts,” a category more often sold by small businesses than big-box retailers. Perhaps this is a sign that shoppers still value the heart and intimacy that small retailers provide.