Good news for retailers, MYOB’s latest Holiday Trading Snapshot shows that Kiwi consumers are looking to embrace the festive season and spend their cash locally.
While New Zealand’s SMEs are cautious of what the upcoming season will look like for them, research which polled 1,000 local consumers revealed that nearly two thirds (64 percent) expect to spend the same on gifts as they did last year, with 10 percent expecting to spend more.
MYOB NZ country manager, Ingrid Cronin-Knight, says despite Covid-19 and the challenges it has brought to the retail industry, the news of consumers’ local spending intentions this summer will be welcomed by many SMEs.
“Our small-to-medium sized businesses can take some encouragement from the fact that three quarters of New Zealand consumers are intending to spend the same or more celebrating the festive season this year, and what’s particularly heartening is that we’re seeing a proportion of this spending is set to take place at local businesses.”
This time of the year is extremely important for most retailers, with some even describing it as make or break. MYOB’s research shows that 73 percent of SMEs surveyed said that the Christmas period is the most important time of the year, while 24 percent of local SMEs estimate that the holiday season accounts for 20-30 percent of their business’ annual revenue.
“Following what has been a pretty turbulent year of trading for many New Zealand businesses, hopefully, the holiday period this year will be a light at the end of the tunnel, particularly for those SMEs whose business or industry has been in desperate need of consumer spending,” says Cronin-Knight.
How are consumers shopping
Support local has been New Zealand’s theme for 2020, and is set to continue into the new year. More than a quarter of consumers are looking to buy locally this Christmas and New Year, with 27 percent of those surveyed saying they intend to purchase gifts from home-grown businesses. 55 percent of those expecting to buy locally are doing so as they believe it is important, now more than ever, to support small business owners and operators.
Shopping in-store remains more appealing to consumers than online shopping, however having an online presence should be an important consideration for SMEs, with 55 percent of consumers planning to do at least a third of their Christmas shopping on the internet.
“Online shopping is still a popular channel for New Zealanders looking to buy Christmas gifts, and as we saw during the COVID-19 lockdowns, if an online store is within the financial means of a business, then taking advantage of this as we enter the festive season could open some SMEs up to a lot more customers,” says Cronin-Knight.
What are retailers doing
To prepare for the fast approaching holiday season, 60 percent of SMEs surveyed said they have made changes to business operations. Of this group, 24 percent are planning to expand their opening hours over Christmas and the New Year, with many saying this is the first year they have made such changes.
Staying open for longer could be a chance to catch up on lost revenue from closure during the Lockdown says Cronin-Knight. Meanwhile other businesses may find it more beneficial for the sustainability of their store to close early or close down over Christmas.
“Ultimately, these decisions depend on the circumstances of each individual business, and some SMEs will undoubtedly still be assessing the benefits and weaknesses of staying open longer, closing earlier or staying completely closed.
“Whichever way they might be leaning, business owners could choose to discuss their plans with their business advisor or mentor before coming to a final decision.”
Tips from the Retail Association
Time of year can also be overwhelming for many retailers. Retail NZ’s Greg Harford has these top tips for staying sane and during the silly season:
- Make sure your stock will be available! There’s huge pressure on supply lines this year, so it’s a good idea to be talking to your logistics supplier about any potential delays.
- Theme up your website, store windows and advertising to draw in customers looking for deals.
- Make sure the discounts you offer are genuine. You can’t increase prices for a week and then drop them down again because that’s potentially misleading for consumers Click here to read more about this.
- Plan your rosters ahead of time and make sure you have team members available for the busy period. Make sure all staff, including casuals have a legal employment contract.