Holiday Shopping Report 2024: Consumer spending down, but small business sentiment remains strong

Consumers are starting their shopping early—and small business owners may benefit

Consumers won’t be scrambling to buy last-minute gifts this year. Nearly 3 in 4 (73%) say they’ll have the majority of their holiday shopping done before December begins. And nearly a quarter (23%) say they’ll have their shopping done before November, well ahead of the holiday season.

It’s holiday music to the ears of small business owners, who often rely on a strong and sustained holiday shopping season to meet their financial goals. In fact, 2 in 3 small business owners (66%) say it’s helpful to their business when customers start shopping early.

In anticipation of welcoming these early shoppers, nearly 2 in 5 small business owners (39%) say they’ve already started preparing for a busy holiday season—many starting their holiday prep in September or sooner. For them, this means increasing their marketing efforts, stocking up on inventory, and planning their holiday discounts and promotions.

Despite the stress of the season, the majority of small business owners surveyed (90%) say they feel confident in their ability to handle the increased demands of the holiday season. They say workplace systems like project management tools, inventory management tools, invoice or payment tracking software, and customer relationship management (CRM) tools are key to keeping spirits bright.

Small Business Saturday is among the top three most popular holiday shopping days

Nearly 2 in 3 consumers (65%) say they plan to shop on two of the most popular holiday shopping days: Black Friday (November 29) and Cyber Monday (December 2). But Small Business Saturday (November 30) is gaining traction—34% of consumers say they plan to shop small the day immediately following Black Friday. What’s more, they’ll do an average 39% of their holiday shopping that day.

This has small business owners feeling optimistic—33% say they expect to see a high sales volume on Small Business Saturday, second only to Black Friday. And they expect to earn an average 39% of their total holiday sales revenue on this day alone.

Consumer holiday spending is down—but small businesses still have a big opportunity to succeed

According to survey insights, consumers are expected to spend $85 billion less this holiday season—a 34% year-over-year downturn. And small businesses will feel the squeeze. On average, consumers will spend $294 each at small businesses this holiday season—a 40% downturn from the average $485 each predicted last year.

Nearly a quarter of consumers surveyed (23%) say they expect to spend less this holiday season than they did last year, and they cite rising costs as a major motivator behind this decision. Of those who plan to spend less this year, more than 6 in 10 say grocery and gas prices are to blame. Another 4 in 10 say their wages haven’t kept up with inflation over the past year.

Despite this decrease in spending, there may be a bright spot for small businesses. The survey found that 93%, or an estimated 240 million people, plan to shop small this holiday season—representing a $76 billion opportunity for small businesses. Nearly 9 in 10 consumers surveyed (88%) say it’s important to them, to some degree, to support small businesses over big retailers. Their ongoing support and sentiment comes as merry news for the millions of small business owners who rely on holiday revenue to ring in a successful new year.

Small business owners remain hopeful about hitting holiday revenue goals

According to survey insights, small business owners may depend on holiday sales to make up at least a third of their yearly revenue. Small business owners surveyed say they expect to earn an average 33% of their yearly revenue from holiday sales this year. For many, that holiday revenue is essential for hitting their annual business goals. More than 6 in 10 (61%) say holiday revenue is important to the success of their business. Nearly a quarter (23%) say they face a difficult year if they don’t hit their holiday sales goals by December 31. For some (5%), a successful season is make-or-break for their business.

That said, the majority of small business owners (82%) say they expect to earn the same or more revenue in total holiday sales this year than they did last year—despite lower spending predictions. Only 13% say they expect to earn less. They’ll use that essential holiday revenue to position their business for success in 2025 by paying down existing debt, creating new products or services, and updating or replacing equipment.

Deals and discounts are key to combating rising costs and competing with bigger businesses

More than 9 in 10 consumers say they’re concerned about higher costs affecting their holiday shopping this year. To combat these concerns, they’re tracking down the lowest prices and hunting for the best deals—a search that could steer them away from smaller businesses.

Nearly 2 in 3 consumers surveyed (64%) say they’re prioritizing shopping at stores that offer low prices and the best deals. Another 58% say they’re cutting coupons and promotions to save money. But these money-saving tactics could lead them to larger retailers with more flexibility to offer larger discounts. Consumers who say they expect to spend less at small businesses this year say concerns about higher prices and inflation are the top deterrent—and 39% will turn to larger retailers in search of better deals.

While only 35% of small business owners surveyed say they consider larger retailers to be their competitors, nearly 6 in 10 (59%) say they believe these concerns about rising costs will have a negative impact on their customers’ spending this year.

To encourage more consumers to shop small, business owners say they’re planning on offering exclusive deals and discounts to customers this year, increasing their advertising efforts, and honing in on providing excellent customer service—a perk that 33% of consumers say sets small businesses apart from the larger competition.

The majority of consumers care about supporting and shopping small this holiday season

According to the survey, 93% of consumers plan to shop small to some extent this holiday season—equivalent to more than 240 million people. Of these, 31% (or an estimated 74 million people) say they expect to spend more at small businesses than they have in years past. Only 9% say they intend to spend less at small businesses this year.

Two in 3 of these consumers (66%) say they’re driven to spend more at small shops by a strong desire to support small and local businesses. Another 54% turn to smaller businesses for more unique and high-quality gifts than they can find on the shelves of bigger box stores.

For the 93% of consumers who plan to purchase from small businesses this season, shopping small comes with important perks beyond a lower price tag. Namely, quality products and services, contributing to their local communities, and supporting entrepreneurs.

Online shoppers expect shipping perks that small businesses may not be prepared to offer

Business size aside, consumers surveyed plan to shop equally in person and online this holiday season. More than half (51%) say they’ll be doing a little bit of both. Another quarter (26%) say they’ll be shopping primarily in person. The remaining 23% will shop primarily online. And small businesses are meeting consumers where they’re at—the majority embracing an omnichannel approach.

But this is one area where small businesses are at a disadvantage. While consumers can be motivated to shop small and in person by the promise of better customer service and a desire to avoid overcrowded big retail stores, the draw of free shipping is often hard to resist.

Seven in 10 shoppers say they prefer to shop online for the convenience of shopping from home at any time and the promise of free or discounted shipping—a promise small businesses might be hard-pressed to make. Nearly 30% of consumers who say they plan to spend less at small businesses this year say they’re turning to larger retailers that offer more convenience in terms of shipping.

Small businesses with lower shipping volumes may find it challenging to negotiate better shipping rates like larger businesses often can. Barring a price increase or a team of elves, free shipping is disappointingly out of reach for many small business owners struggling to keep costs competitive. Over half of small business owners surveyed (52%) say they don’t plan to offer any special conveniences to online shoppers this year. And only 3 in 10 say they’re able to offer free shipping.

Small businesses leverage social media shopping to reach more customers

Free shipping isn’t the only perk of online shopping for consumers—52% say shopping online gives them access to exclusive online deals and discounts or lower prices. And when it comes to buying from small businesses online, consumers go directly to the source. Six in 10 say they turn to the business’s website for information about deals and discounts.

The seller’s website is also their first stop for online shopping—59% of consumers say they start here—above even third-party ecommerce platforms like Amazon or Etsy. And small businesses are leaning in. Over half (51%) say they plan to sell products or services directly from their website.

But social media shops are becoming an increasingly popular ecommerce option for small businesses. Shops on social platforms offer small business owners an opportunity to reach larger audiences and engage with customers directly. Over half of small business owners surveyed (52%) say they plan to use social media platforms to sell products or services this holiday season—more than any other platform, including their own website. Facebook, Instagram, and TikTok are top social platforms of choice for both small businesses and their customers.

Consumers prefer targeted communication from small businesses they care about

Surprisingly, social media advertisements aren’t how consumers prefer to get information about seasonal deals and offerings from small businesses. Over half of consumers surveyed (54%) say they prefer to receive communications from small businesses directly to their inbox via targeted emails. Others prefer more tangible communication—they look for in-store promotions (40%) or direct mail flyers and catalogs (33%) to get the latest news from their favorite small businesses.

Small business owners surveyed are more apt to lean on social media and other digital marketing outlets to spread the word about upcoming seasonal deals and offerings. Digital marketing may enable small businesses to reach a wider audience and track success more effectively. But investing in direct marketing tactics can help them reach and connect with their target audience and strengthen existing customer relationships.

Consumers and small business owners take advantage of AI assistance this holiday season

Santa’s little helper comes in the form of artificial intelligence (AI) this year. Nearly 1 in 4 consumers surveyed (23%) say they plan to use AI to help with holiday shopping and planning, especially when it comes to finding deals. They’ll turn to AI for product recommendations, virtual assistance, and AI-generated wish lists to make holiday shopping easier and more efficient.

Likewise, 30% of small business owners say they plan to leverage AI for help with targeted email campaigns and predictive analytics, to create more personalized customer service experiences, or for automated inventory management and demand forecasting, among other uses.

These AI assistants might be just what small business owners need to get through the busy holiday season, considering only 14% plan to hire seasonal help. The majority (75%) say they won’t be hiring additional staff to assist with holiday operations. Of these, 53% say they don’t anticipate needing the help—but more than 3 in 10 (31%) say seasonal employees are simply out of their budget.

Methodology

Intuit QuickBooks Holiday Shopping Report 2024

Consumer Surveys

Intuit QuickBooks commissioned an online survey, completed in September 2024, of 5,500 consumers (adults aged 18+) throughout the US. Small business consumer spending estimates are based on a weighted average percentage of total spend budget each survey respondent indicated they planned to spend at small businesses this holiday season multiplied by the equivalent number of people in the US population based on the latest available data from the U.S. Census Bureau ($294 average spend at small businesses per person multiplied by 258 million US adults over the age of 18 equals $76 billion potential revenue for small businesses this holiday season). To ensure the survey findings are as representative as possible, they have been re-weighted using post-stratification based on local census data. For clarity, percentages have been rounded to the nearest decimal place—so values shown in charts and graphics may not add up to 100%. Responses to multiple choice survey questions are shown as a percentage of the number of respondents, not the total number of responses, so will always sum to more than 100%. Respondents received remuneration.

Small Business Owner Surveys 

Intuit QuickBooks commissioned an online survey, completed in September 2024, of 2,000 US consumers (adults aged 18+) who have income from employment or self-employment in three cohorts: respondents who identified themselves as small business owners with 1-100 employees (n=646), small business owners with no employes (n=715), and employees of a business who own a small business on the side (n=639). For clarity, percentages have been rounded to the nearest decimal place—so values shown in charts and graphics may not add up to 100%. Responses to multiple choice survey questions are shown as a percentage of the number of respondents, not the total number of responses, so will always sum to more than 100%. Respondents received remuneration.