Last-Minute Shoppers Help Small Retailers Compete with Amazon for Holiday Sales

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As the holiday shopping season approaches, we’re reminded again of Amazon’s rising influence on how people spend their hard-earned money. Last year, the e-commerce giant enjoyed record holiday sales despite fears that a tumbling stock market at the time would soften consumer confidence.

It’s Amazon’s world — or is it?

Outside the digital sphere, brick-and-mortar holiday sales at big-box shops like Walmart and Best Buy continue to be buoyed by bullish shoppers willing to hit the streets in search of timely deals during consumer-focused quasi-holidays like Black Friday. As a result, shoppers are spending more during the holidays than ever before.

And then there’s the independent, local retailer. How is a small shop supposed to compete with the ease of mobile e-commerce or the allure of big-box doorbuster deals? Turns out, they have an ace in the hole: last-minute shoppers.

Recently, the data science team at Womply analyzed a full year of transaction data at 52,000 small, brick-and-mortar retailers to understand when these shops are busiest. The resulting local retail report revealed a bunch of interesting details about how consumers are patronizing local retail businesses.

A key lesson was that sales spike at these shops the closer we get to major shopping holidays. This makes sense when you think about the modern holiday shopping cycle.

Increasingly, consumers who get out in front of shopping for big days like Christmas, Mother’s Day, or Valentine’s Day take advantage of the convenience of e-commerce apps like Amazon. Others respond to the incentives of Black Friday and other holidays, often braving long lines, rabid crowds, and bitter weather to do so. Many more wait until the last minute to hit up local shops in a panicked stupor familiar to procrastinators everywhere.

When shipping is no longer possible and the mega-store deals are all gone, local retail is the natural beneficiary. Main Street, it seems, is the last line of defense keeping tardy shoppers out of the holiday dog house.

Let’s dig into the data and see what this trend means for consumers and small businesses.

Free shipping has a shelf life

The first phase of the holiday shopping cycle is characterized by convenience. There’s no experience more convenient than opening a mobile app, browsing deals, loading a digital shopping cart, and checking out with the tap of a button.

E-commerce is certainly convenient, but it has a shelf life. The closer we get to a major holiday, the less realistic it is as an option. Until automated drones drop things on our porches all the way to the eleventh hour, free shipping will not help last-minute shoppers.

This logistical limitation for e-commerce is a business opportunity for local retailers. As the days melt away, the heat turns up on people who’ve put off their holiday shopping lists. In fact, according to our analysis, four of the top six sales days of the year for local retailers are right before or ON major holidays — Valentine’s Day, Mother’s Day, and the weekend before Christmas.

In each case, procrastinators are driving a significant sales spike at local retail shops. If you run such a store, it pays to be open right up to the last minute.

Drafting off the big-box shops

If phase one of holiday shopping is driven by convenience, then phase two is driven by deal hunting. During this phase, physical and digital shopping collide, as evidenced by the growing mix of online and offline sales during 2018’s record Black Friday and Cyber Monday sales.

Interestingly, major sales events designed to drive sales at big-box and internet retailers also benefit small shops. During each of the last three years, our analysis has found that Black Friday was one of the top five sales days of the year for local retailers, ranking far ahead of Small Business Saturday. Even Amazon Prime Day has shown some marginal lift for local retail sales.

These findings suggest a spillover effect from all the marketing and hype that goes into these big days. If people are in the shopping mood, it seems, their spending carries over to the benefit of local shops. For retailers on Main Street, the takeaway is to co-opt these big days for yourself — run promotions, extend your hours of operation, and make sure your regulars know you’re open for business.

The power of being unique

If these research findings suggest that local retail is relegated to table scraps, then this analysis is incomplete. We consider it remarkable that local retailers are benefitting at all from events designed specifically to lather up sales at big competitors. So, small shop owners and operators can take heart in the fact that the market is naturally spreading the love.

Digging deeper, there’s an untapped opportunity for local retailers to fully embrace their uniqueness. People spend money with Amazon because it’s easy. They patronize big-box shops because they get a predictable experience. But when consumers want something unique and authentic, there’s no substitute for what the shops lining Main Street can offer.

If you run a brick-and-mortar store, lean into these findings. Adjust your business processes to take advantage of currents you didn’t create. But also don’t forget who you are and what makes you distinctive. Ultimately, being unique is what makes local business relevant — during the holidays and beyond.

Toby Scammell is the CEO and founder of Womply.