Small businesses plan big: It’s deals and A.I. this holiday season

ARLINGTON, Va. — Small businesses are getting a jumpstart on the holidays, and they’re planning to use deals and artificial intelligence to help them gain customers.

In a survey of companies with between two and 1,000 employees, Capterra found 70% of small to mid-size business (SMB) owners will be offering more holiday deals than they did a year ago.

It seems Labor Day is becoming the new Black Friday, according to 53% of those surveyed. In addition to offering more deals, about half (49%) said they began rolling them out in September, and 70% will do so at least before Halloween. That’s a jump from last year, when 40% said they would begin holiday programs by October.

Among the reasons cited for the push to earlier shopping are the hangover from the pandemic, when consumers shopped earlier in response to supply chain issues; competition with Amazon, which has Prime Day events in July and October and has goaded other big box retailers to have similar sales; and the need to extend the shopping season to lure back customers who have transferred their spending from products to experiences.

Another reason cited by Capterra is that earlier promotions have been working. Among SMB retailers, 53% said Labor Day sales brough in the most revenue for the year in 2022 vs. 44% who cited Cyber Week as the sales winner.

A.I. will be a part of this year’s holiday strategy for 44% of those surveyed. Among the leading uses are generating marketing content (44%), personalizing the customer experience (43%), data analytics (39%), automating tasks (35%) and designing products (33%). Retailers will also use A.I. for designing store displays and creating product descriptions.

Additionally, SMB retailers have identified A.I. as a means to gain a foothold in next-generation web search, with 73% saying they are concerned small businesses will be overrun by large corporations as online searches migrate to generative A.I. chatbots, so early adoption could help keep them in the running.

One downside that SMB owners are going to be tackling this season are returns. More than half (57%) expect to receive more returns this season. Some of the tools they’re planning to deploy include offering more products as final-sales items (41%), shortening the window for returns (26%) and charging more for shipping (24%).

For its 2023 Retail Holiday Preparations Survey, Capterra polled 500 small to mid-size retail business leaders in August.

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