While many people view Christmas as a time to spend with loved ones and friends, the season signifies something entirely different for businesses.
In fact, many businesses would say the holiday season is the most important time of the year. And that’s not just the case here in the UK but in many other countries around the world as well.
If you aren’t a business owner, you may not even realise how important Christmas is to the bottom line and economies in general, so let’s examine it a little closer. Here are some reasons why Christmas isn’t just important but essential for businesses.
Lots of Money Is Spent in a Relatively Short Period
While the holiday season can be a magical and wonderful time, it’s also when people spend a lot of money. That is why the Christmas season is often the most profitable time of year. And we aren’t just talking about large retail chains, but small local shops too. It seems like everyone is doing more entertaining and more shopping than usual. This is often a huge boost to the economy, even in times when money may be tight and inflation is high.
According to statistics gathered by Finder, Brits will spend a whopping £46.4 billion during the Christmas season. That’s no small number to scoff at, and it works out to roughly £923 per person. Those profits can then be injected back into the economy and circulated, creating a positive effect all around. Statistics also show that small businesses in particular count on the holiday season in terms of revenue. On average, they make about 25% of their total year revenue in this one period.
This helps explain why retailers wait to put their most coveted items on sale this time of year, trying to entice buyers and give them that extra push they may need. Christmas promotions, special deals, discounts, and even rewards programs are all dangled in front of consumers.
People Easily Get Caught Up Gift Giving
Sure, not all the money spent during the Christmas season can be attributed to gift buying, but you can bet a large portion of it is. Many people pool their resources to bless their family with gifts, even if they don’t have a ton of extra cash and it means skipping out on other things they love like dining out at restaurants, treating themselves to new clothing, or playing on the sites listed on casinos.com.
The fact is that gift giving can seem contagious and once you see some people doing it, you can’t help but feel obligated to join in. Even if people are only purchasing small, more reasonably priced items, it still adds up.
This Is a Great Time for Businesses to Reach New Customers
Another reason Christmas is essential to businesses is that it helps expose them to a broader customer base. If you’re purchasing a gift for someone, it may lead you to a store, a brand, or a particular item you have never heard of before. This is a chance for that business to woo you and potentially win you over as a customer. The hope is that you don’t just buy a gift for the person on your list, but that you’re so impressed by the item and the customer service that you feel inclined to make that same purchase for yourself. At the very least, now you know the business exists, so there’s a greater chance of you returning in the new year.
Grocers Also Benefit from the Holiday Season Spending
Retailers aren’t the only ones who rake in high profits during the Christmas season. Grocers do too. When people entertain at home more often, they need more food and drink to serve their guests. Whether it’s just appetisers or a full meal, they are likely spending more than their typical food budget.
This year the average cost of a holiday dinner is £32.57 for four people. That may suit a family just fine, but what about when the extended family comes over too? That price continues to climb, and grocers are only too happy to see the items fly off the shelves. Shoppers aren’t just buying larger quantities. They also tend to purchase fancier, pricier items at this time of year. Whether they want to wow their guests or just treat everyone to a special meal, it’s good for business.
A Chance to Jump on the Latest Trends
There’s also the fact that businesses can jump on the latest trends and fads, striking while the iron is hot during this season. If a business can quickly diversify and react to market trends, it can pay off in a big way during the Christmas season. There’s always that one item every kid or adult wants.
If a business offers that coveted item, word quickly gets out and before you know it, they’ve created demand. Even if they only offer limited quantities, it’s enough to drive customers to the business.
Without the Christmas Season, a Business Can Struggle to Be Profitable
The Christmas season is so important that without it, a business may seriously struggle to be profitable. When you figure some businesses make 25% of their yearly revenue during this time, how easily could they survive without those revenues? It’s no secret that businesses put on their best face at this time of year and try to woo customers, create loyalty, and do everything they can to clear products off their shelves. For these reasons, the Christmas season can truly make or break a company.
Image via Unsplash
