As the holiday season approaches, small business owners are gearing up for what could be a make-or-break period. According to a new report from Constant Contact, a leading provider of digital marketing tools, a staggering 60% of small to medium-sized businesses (SMBs) attribute up to half of their annual sales to the current quarter. With such a significant financial impact, adapting to both economic pressures and shifting consumer behaviors has become more crucial than ever.
The report surveyed over 1,800 small business owners across the United States, the United Kingdom, Australia, and New Zealand, revealing that one in three owners feels the highest revenue pressure during this critical time. The retail sector, in particular, feels this strain acutely, with nearly 47% of owners expressing concern. Yet, despite the pressures, a resilient 77% of SMB owners remain confident in their ability to meet annual revenue targets.
Smita Wadhawan, Chief Marketing Officer at Constant Contact, emphasized the importance of strategic adaptation: “The holiday season is the most critical time of the year for small businesses, accounting for up to half of annual sales for 60 percent of owners.” Wadhawan noted that SMBs are responding to pressure by rapidly scaling their marketing efforts. The study indicates that the number of businesses launching new marketing campaigns has skyrocketed from 7% in 2024 to 33% in 2025.
This renewed focus on marketing comes with tactics that differ from previous years. About 60% of business owners plan to increase the frequency of their marketing communications. A standout statistic shows that 40% of SMBs view social media marketing as the most impactful channel for success, far surpassing email marketing, which only 18% ranked highly. Discounts and sales continue to be the most effective promotional strategy, with more than half of the participating businesses employing these tactics.
Last year’s holiday marketing initiatives were reportedly successful for 81% of SMB owners, primarily resulting in increased sales and new customer acquisition, which underscores the potential for success in the current climate. However, economic constraints remain a concern. The report identifies inflation and rising costs as the leading external challenges, reported by 32% of owners, followed by weak consumer spending at 22%.
Internally, businesses are grappling with customer engagement challenges (39%), budget limitations (36%), and difficulties in generating fresh content (34%). Notably, 46% of SMBs claim to be negatively affected by recent tariff policies, leading many to consider cutting expenses or raising prices, which could further strain customer relationships.
On the consumer side, economic concerns have directed shopping behavior. Approximately 70% of shoppers are actively looking for discounts and promotions. Yet, a silver lining exists; consumer loyalty remains strong, with 72% of shoppers returning to the same small businesses each holiday season, and 88% expressing a likelihood of becoming repeat customers after making a holiday purchase.
Small business owners should be aware of these dynamics as they plan their holiday strategies. The insights presented in the Constant Contact report serve as both a guide and a cautionary tale. Balancing marketing outreach with budget constraints and maintaining customer engagement can present challenges but also offers opportunities to cultivate loyalty and boost sales.
With the holiday season fast approaching, harnessing social media and discount strategies may be the key to leveraging sales effectively. As Wadhawan noted, “Delivering the efficient, simplified marketing solutions that SMBs need to successfully execute these new strategies is core to our mission at Constant Contact.”
It’s clear that while challenges loom large, those who adapt and strategize effectively could see significant rewards this holiday season. For more detailed insights, the full report is available at Constant Contact’s website: Original Report.