Thanks to inflation, Canadian small businesses bracing for a potentially rough holiday season

"Our study shows that despite inflation, shoppers still want to support small businesses, so the SMBs (small and medium-sized business) who thrive will be the ones who start their holiday marketing early, streamline their work with automations and engage customers consistently throughout the season."

Just over a third of small businesses said they feel the most pressure to drive revenue for their businesses in Q4.

The pressures of the incoming holiday season

Despite that heightened focus on driving Q4 revenue, the report suggests that small businesses are struggling to overcome barriers in marketing themselves effectively during this pivotal spending season.

The report found that:

• 72% of businesses cite budget and/or time limitations as the biggest barriers to marketing themselves during the holiday season
• 59% of businesses who measure their marketing effectiveness feel uncertain that their holiday strategy was effective in 2023
• Nearly one-third (31%) of businesses did not launch any promotions during the end-of- year/holiday season in 2023
• Close to one in four (24%) businesses did not do any holiday marketing whatsoever in 2023

“Canadians have an affinity for small businesses – it's the backbone of our economy, in fact – and naturally we want to rally around them during the holiday season as we're checking items off our gift lists," said technology expert Marc Saltzman.

How to get ahead during this crucial spending season

October is considered the unofficial start to the holiday season and according to the report, it's also when 18% of small businesses begin their holiday preparations. Getting into the festive spirit earlier can be especially advantageous, since 56% of consumers' interest in interacting with small businesses increases during the holiday season, according to the report.

Another tip is to Incorporate holiday themes into existing campaigns – 43% of small businesses are in the habit of tweaking existing campaigns and/or messages to incorporate end-of-year/holiday themes instead of performing complete and costly overhauls of their marketing campaigns.

Discounts and sales offers are the types of promotions 36% of Canadian small businesses find most effective for driving revenue. This is further validated by the 61% of consumers who are encouraged to buy from a small business during the holidays by competitive pricing and sales.

This year, 51% of small businesses plan to prioritize email marketing and social media marketing as the top areas believed to have the biggest impact on reaching their end-of-year/holiday season goals.

"My advice to small businesses heading into this period is to focus on making small adjustments that will help drive more traffic to their businesses,” Saltzman said.

“I often see the biggest impact come from the smallest tweaks, whether it's trying out a new technology tool or service, leveraging data to make customer-focused decisions, or refining last year's marketing strategy based on what worked well.”

Study methodology

Constant Contact's Small Business Now report analyses insights from over 300 small business decision-makers in Canada employed at companies with 250 employees or less. All stats are representative of their associated demographics. It also combines data from over 500 consumers aged 18 and over in Canada. The survey was conducted by Ascend2 Research in August, 2024.