The holiday shopping season kicks into high gear this week as millions of Americans will use their time off from work to take advantage of retailers’ steep discounting. Many stores over the past few years have even started opening up on Thanksgiving evening in order to win over the growing number of consumers who do not want to wait until Black Friday to hunt for deals. The shift is also not too surprising since retailers are dealing with rapidly increasing competition from online sellers like Amazon that not only provide customers with large discounts but also allow consumers to avoid congested stores and instead shop from the comfort of their own home.
The rise in online commerce has been significant, with nonstore retail sales surging by 12.9 percent in just the past twelve months, compared to annual growth of only 2.6 percent for retail sales in general. Despite the sharp gains, e-commerce still only accounts for less than a tenth of total retail sales in America but it is a phenomenon that brick-and-mortars simply cannot afford to ignore. This is especially true for small businesses that have to compete with both online and big chain retailers. Indeed, small businesses are an important component of the U.S. economy, accounting for more than a third of all net nonfarm payroll growth last year and consistently being a larger job creator than midsize firms. Given the big role that these companies play in our economy, many government officials from the federal, state, and local levels have all championed the first Saturday after Thanksgiving as “Small Business Saturday,” when Americans are encouraged to go shop at and support their local mom-and-pop stores. See the video below for more details.
Sources: U.S. Census Bureau, BLS, FRBSL, FRBC, NFIBPost author: Charles Couch