In its latest read of the sentiment of SMBs and consumers, Constant Contact found shoppers who would pull back on spending if a recession hit, while SMBs said they would survive a downturn. The biggest issue facing SMBs, though, is a lack of staffing.
Constant Contact, which partnered with research firm YouGov, said in its report that 40 percent of SMB decision-makers polled “are struggling to attract new employees, and as the country heads toward a potential recession, 21 percent are concerned they won’t be able to hire/retain staff.”
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Despite those fears, the authors of the report said 84 percent of SMB decision-makers “did not express concerns about their company’s ability to survive a potential recession.” When asked what would boost their confidence in weathering a recession, 23 percent of respondents said it would be hiring more staff, while 22 percent said having a larger marketing budget. Twenty percent said having more support from their communities would help.
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Regarding consumer sentiment, Constant Contact said shoppers are “feeling the squeeze of inflation, and many are starting to reprioritize their budgets. However, [survey] results indicate small businesses would remain a priority during a recession.”
Of the consumers polled, 85 percent anticipate “they would cut back on spending during a recession,” the authors of the report said, adding that 58 percent would look to cut back spending first on categories such as convenience, lifestyle, or entertainment.
“However, more than 1 in 3 (36 percent) would look for opportunities to support small and medium-sized businesses more often during a recession, and 29 percent noted they’re always willing to pay more to support a small business,” the authors of the report said.
When measuring how shoppers want to be communicated to, “email is still the best way to communicate with customers,” the authors of the report said, adding that 55 percent of consumer respondents who prefer a business use a digital channel to contact them “agree email is their preferred way to be contacted by small businesses, and that is immediately followed by SMS/text (17 percent).” Constant Contact said this illustrates “a new opportunity for small businesses to activate their customers and drive more business.”
Laura Goldberg, chief marketing officer of Constant Contact, said the research report “offers a sense of optimism to small businesses who may be feeling concerned about how the current economic climate will impact their business.”
“While inflation is certainly forcing consumers to be selective about where they spend, our findings indicate that supporting small businesses is still a priority for them — particularly during the busy holiday season,” Goldberg noted. “Now in its second year, our Small Business Now Report delivers insights on how small businesses can tweak their digital marketing strategies to get closer to their customers, finish 2022 on a positive note, and prime themselves for a successful year in 2023.”
Digging deeper into the findings revealed that 33 percent of consumers polled said they “want to support small- and medium-sized businesses, but it isn’t cost-effective to do so during a recession compared to buying from big-box retailers.”
Other findings showed that shoppers are making holiday purchases earlier this year. Thirty-six percent of consumers polled said they’ve shopped for gifts prior to October. “Conversely, 51 percent of small business decision-makers report they don’t begin prep for the holiday season before October,” the report noted. “This leaves a short window to properly market their businesses and connect with customers.”
Looking at spending, 40 percent of consumer respondents said they are planning to spend less this year compared to last year. “Of those who plan to holiday shop, 35 percent feel it’s important to purchase locally and support their communities, and another 44 percent plan to donate or volunteer their time to nonprofits,” Constant Contact said.
Regarding where they plan to shop, 48 percent of consumers polled who said they’re avoiding big-box stores this year, as well as major online sites, are doing so “because it’s important to them to support small businesses,” they said.
“Similarly, 34 percent of those who plan to avoid big-box stores and major online retailers feel small businesses offer a more enjoyable shopping experience, and 25 percent think small businesses are better equipped to help with customer service or returns if there is an issue,” the report noted.