Navigating the Holiday Shopping Season: Strategies for Small Businesses to Overcome Inflation and Tariffs

What Is Characteristic of the 2025 Consumer?

Before we speculate on strategy, we need to understand who we are working with. What differentiates this year’s shopper from previous years’? To get some answers, we’ll refer to some relevant holiday shopping trends identified from customer data gathered by PissedConsumer.com.

As already touched upon, it is inflation and tariffs that are leading a shift in consumer sentiment and behavior. 64.9% of surveyed shoppers say that inflation will make a difference to their holiday spending, and 63% voice concerns that tariffs will price them out.

As expected, a budget adjustment is immediately apparent: 25% of those surveyed say that they plan to spend $1000+ on holiday shopping in 2025. This percentage is down from 30.3% the previous year.

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How will these holiday shopping insights affect consumer spending? Well, this year’s holiday consumers will be more selective about what they buy and where they buy it. More shoppers will be placing emphasis on perceived value to justify purchases and retailer discounts as a way to make their dollar stretch further. Discounts, deals, and sales will hence attract more buyers than usual.

While online shopping is dominant, people are still seeing seasonal shopping as a physical event that they want to participate in, with most looking to shop both on and offline (65.3%). This tells us that despite the apparent diminishing relevance, the main street store still has a place in the holiday shopping schedule.

There’s a mixture of methods attracting shoppers to discounts, too: 61% say they find bargains via online ads, direct emails (54.8%), and 44.2% locate a deal through flyers and other in-store ads or promotions. Even AI is squeezing itself into this category, with 10.8% they are utilizing ChatGPT et al. to help them plan out their holiday shopping. This data indicates that a multi-channel approach remains key to a strong advertising strategy.

How Can Your Small Business Maximize Holiday Sales in 2025?

There are many practical considerations for small businesses preparing for the fourth quarter. But before fussing over details, you need to set a solid foundation by establishing a good handle on the basics. This is a task that takes even the apparently mundane into account and emphasizes good planning and simple, efficient solutions.

1. Establish simple targets. Set a goal of what you want to achieve (profit) and figure out the lowest price you can do whilst still hitting your target.
2. Obtain products and production necessities early and in bulk. Avoid bottlenecks, logistical setbacks, and tariff charges wherever possible. Maintain good supplier relationships and have a contingency in case of unforeseen complications.
3. Prepare your customer service team for the increased volume of inquiries that is consistent with the high shopping season. Update knowledge bases to cover holiday shopping trends, as well as all sales and product discount-related terms and information.
4. Be transparent and upfront about actual cost and shipping charges. Don’t confuse customers with your pricing. Don’t try to conceal the real price in the small print. If the cost is already as low as it can be, emphasize value for money. Today’s consumers are more sensitive to perceived price manipulation by retailers, so simplicity and clarity here are a way to keep customer trust.

Connect With Your Customers Through Personalization

We often hear the complaint that in our era of giant online retailers and mass monopolization, the personal connection has been lost, that interactions are now too impersonal and faceless. Small businesses are poised to make up for this.

With an emphasis on customer relationships rather than just sheer volume and market-leading prices, small retailers can develop an unmatched understanding of their customers’ wants and needs, tailor to the individual, and make every customer feel like their most important customer.

The two pillars of this approach are customer service and customer data. Listening and learning. A genuine understanding of the market for your product informs you of customer expectations and requirements, plus it gives your customer service operation the unrivaled position of being able to authentically place themselves in the customer’s shoes. The starting point for genuine conversations that form real, valuable connections.

Analysis of customer feedback can tell you a lot about a customer’s feelings, whereas data analysis will reveal the unspoken behaviors that tell us what customers want. Think of the purchasing patterns, what products and marketing they most frequently engage with. This and a variety of customer data points will help your business form an identity for each customer.

Such customer profiling will inform relevant product recommendations and, at scale, will help your brand cut the fat from your advertising and product catalog.

Make the most of this during the holiday season to reach out with the best offers for the right customers and ensure your discounts and sales reach those who’ll appreciate them most.

Provide a Fuss-Free Customer Experience

Christmas and the holiday season in general are a high-stress occasion for the average consumer. With all the organizing, budgeting, and other commitments, time becomes a precious commodity.

Maximizing Customer Experience for Holiday Shopping Success

One key advantage you have is that for many customers, convenience often outweighs cost considerations. As a business, it is crucial to ensure that purchasing from your brand is a smooth, hassle-free experience. A complicated user interface, slow loading times, unclear policies, or any other source of confusion can easily test your customers’ patience and lead to them seeking alternatives.

When looking at holiday spending from your customers’ perspective, it is essential to focus on:

• Ensuring that your website or app is easy to navigate on both mobile and web platforms
• Creating intuitive menus for seamless browsing
• Minimizing the time it takes for a customer to complete a purchase, from product selection to checkout
• Optimizing the customer journey to make it as efficient and streamlined as possible

Offering a variety of major payment options is also crucial, as the absence of a preferred method could deter potential shoppers. Additionally, reviewing and simplifying your terms and conditions related to tariffs, warranties, shipping, and returns can help prevent misunderstandings and enhance transparency.

Clarity in pricing is essential to avoid surprises at checkout. Ensure that all discounts and sales are accurately reflected in the final price, and transparently communicate any additional taxes or tariffs that may apply.

Emphasizing Your Unique Selling Points

While price is important, businesses can also differentiate themselves during the holidays by highlighting their unique strengths. As a small business, you likely specialize in a specific niche, allowing you to provide value beyond just competitive pricing.

Personalized customer service can be a significant competitive advantage for smaller businesses. By offering tailored guidance and building personal relationships with customers, you can create a loyal customer base that values expertise and individual attention.

Engaging with your niche community, sharing the story behind your products, and establishing yourself as a trusted expert can further enhance your brand reputation and attract new customers through positive word of mouth.

Providing prompt and personalized assistance can build trust and loyalty among customers, particularly those seeking unique gift ideas during the holiday season. If you have a physical store, leverage this to create a memorable shopping experience and encourage social media engagement.

Catering to the Values-Driven Consumer

While inflation and tariffs present challenges, customers are increasingly seeking authenticity and connection in their shopping experiences. Large online retailers may offer convenience, but they often lack the personal touch that many consumers crave.

Small businesses have the opportunity to fill this gap by focusing on building genuine connections with customers. By offering more than just products at competitive prices, you can provide meaning and a sense of community that resonates with today’s values-driven consumers.

By prioritizing customer relationships and emphasizing the unique qualities of your brand, you can win the loyalty of customers who appreciate what you stand for and will continue to support your business long after the holiday season ends.

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