Capitalizing on Discount Holidays as an SMB

Strategies that can maximize SMB revenue & capture new customers

With more than half of U.S. adults (56%) participating in retail discounting events, SMBs have a huge opportunity to capture new customers and new revenue in these moments. Nearly three-in-four (72%) consumers would prefer to purchase from an SMB over large retailers during discounting events, primarily because they feel SMBs need their support to remain competitive (50%), or because they believe customer service (33%) and product quality (29%) are better. *

Still, SMBs can find themselves at a disadvantage in these moments, largely when they cannot compete on price. Only 18% of consumers who favor SMBs during these events believe they offer better prices than larger retailers. This is significant, because 74% of consumers decide which merchants to purchase from during discounting events based on which are offering the lowest prices. An additional 42% make decisions based on which merchants have the best product reviews. Our study shows that SMBs are at a disadvantage in these areas – thin margins and unexpected costs caused by shipping mishaps can make it difficult for SMBs to compete on price, while a less than perfect shipping experience, in general, can result in negative reviews and reputational damage. When you consider that more than half of U.S. consumers (62%) expect to receive savings between 20% and 50% during these events, it’s easy to see how SMBs can get squeezed.

But with the help of shipping insurance, SMBs can maximize these events with ease – and this should be their priority as they look to capture a windfall of online sales opportunity spurred by Amazon, Walmart and Target’s upcoming discounting events in June. Prime Day 2020 was Amazon’s most successful event on record, and consumers are “primed” to spend even more this year. More than half (55%) expect to spend the same amount or more this year, with 52% expecting to spend between $10 and $100. This translates to up to $13B in potential sales for SMBs in the month of June alone.

Among the top categories consumers plan to shop include home goods and furnishings (46%), apparel (46%), electronics (44%), major appliances (22%) and jewelry/accessories (19%). SMBs will find opportunity both within popular ecommerce marketplaces and their own online storefronts, as 71% of consumers expect to shop Amazon’s Prime Day deals, 49% Walmart’s Deals for Days, 36% Target’s Deal Days and 17% seeking deals from SMBs’ online stores directly.

*All data based on a June 2021 independent survey of 1000 randomly selected U.S. consumers over 18.

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