83% of U.S. Consumers Say Holiday Shopping With a Small Business Is Money Well Spent

83% of U.S. Consumers Say Holiday Shopping With a Small Business Is Money Well Spent

Americans look for holiday discounts, unique gifts and free delivery when shopping local
friends holiday shopping at a local small business

U.S. shoppers are expecting a particularly stressful holiday season this year. In a new small business holiday spending survey from New York City-based Union Bank, roughly 30% to 40% of respondents report already having negative experiences this season, related to low inventory, reduced staffing and longer checkout lines.

These conditions could drive shoppers away from local businesses and toward big retailers like Amazon for its fast shipping and delivery. But small businesses still have a chance: In fact, more than 4 in 5 respondents say holiday shopping with a small business (83%) and dining at local restaurants and businesses (82%) is money well spent.

How can small businesses compete?

When asked what would entice them to shop locally, consumers cite some of the benefits they get from large retailers, and more. The following percentage of consumers say they’d be more likely to spend at a small business if it offered:

  • Holiday sales, discounts and promotions (64%, up from 60% in last year’s survey)
  • Unique, exclusive gifts (59%)
  • Online browsing (52%)
  • Free local delivery (49%)
  • Online ordering (48%, down from 51% last year)
  • Cheery holiday experiences (46%, up from 35% last year)
  • Masking requirements for customers (42%, down from 46% last year)

Union Bank — which has nearly 340 branches in California, Oregon and Washington — also surveyed small business owners, who don't have set plans to offer certain incentives from the consumers’ list.

Of this business owner cohort, 47% say they plan to offer price breaks, with smaller percentages planning to provide holiday decorations (32%) and free delivery (28%). Instead, they’re focusing on more practical measures, like COVID-19 safety protocols.

Small business shopping is a win-win

Many shops closed during the earlier stages of the pandemic, and 75% of owners are still worried their small businesses won't survive, according to a previous Goldman Sachs survey. At the same time, Union Bank’s findings show that 64% of shoppers say they feel an increased sense of responsibility to support small businesses during this time.

They may have to search harder to find ones in their area, however, as smaller retailers can't typically afford as much advertising as their larger counterparts. Many survey respondents say they instead rely on word-of-mouth (56%) and search engines (38%) for help finding local businesses. That’s followed by:

  • Searching Amazon for small business info (28%)
  • Using a Small Business Saturday website (17%)
  • Searching sites like Etsy and Redbubble (14%)
  • Looking at Instagram ads or creative posts (11%)
  • Looking at TikTok ads or creative posts (9%)
  • Browsing influencer content on Instagram (9%)
  • Using Yelp (8%)
  • Browsing influencer content on TikTok (6%)

Still, shoppers overwhelmingly report that it's worth the effort: A majority agree with a statement saying they plan to forgo larger retailers — both online (56%) and offline (58%) — for small businesses this holiday season.

Methodology: Union Bank commissioned Edelman DxI to conduct an online survey of 1,000 U.S. consumers ages 18 and older, as well as 200 U.S. small business owners; respondents were sampled to be nationally representative. The survey was fielded between Oct. 5 and Oct. 13, 2021.