It is the third holiday season where small and medium-sized enterprises (SMEs) are still reeling with the lasting impacts of the pandemic. From global supply chain disruptions to labor shortages and now inflation, this time of year has certainly caused challenges for U.S. businesses. However, the past three years have also resulted in some unexpected opportunities for SMEs, such as the dramatic increase in online shopping and e-commerce activity.
To gain insight into SME expectations for this holiday season as well as their outlook for 2023, DHL conducted a survey of U.S. SMEs. Overall, the findings suggest that while challenges persist, a majority of SMEs are still optimistic about the holiday season and the global trade market going into 2023.
Here are the key findings, compiled from the nearly 2,000 responses:
Supply chain is the top challenge, but inflation is a close second. When asked about expected business challenges this holiday season, 46% of respondents said supply chain delays were their biggest concern followed closely by inflation, which nearly doubled from last year with 35% saying it was their biggest concern in 2021.
Significant changes to YOY holiday sales are expected. Half of the respondents expect either significant increases or significant decreases to their business’ 2022 holiday sales compared to the 2021 holiday season. 27% expect a significant YOY increase while 23% expect a significant decrease. And despite inflation, 40% expect no significant change.
Inflation pressures are being passed down to consumers. To offset rising inflation, 60% said their biggest priority was raising the prices of their products or services. Furthermore, 78% of respondents have increased their product pricing due to inflation:
17% have increased their pricing by over 20%
22% have increased their pricing by 11-20%
And 39% have increased their pricing by 39%
The 2023 outlook is global. When asked what they think will be most beneficial to their business in 2023, almost half (45%) of respondents said expanding globally. Despite global trade challenges, SMEs are optimistic for expansion into new trade markets and are eager to reach new international consumers. 30% expect the Inflation Reduction Act will be most beneficial to their business in 2023.
Business owners are willing to be Santa for success. All the SME respondents said they were willing to go to great lengths for a successful holiday season.
44% said they would volunteer as Santa at the mall if it meant their business would exceed their holiday sales goals
21% would live in the Grinch’s cave
21% would spend Christmas week in the airport
14% would dress as an elf for a year
Working with an experienced logistics partner, like DHL, during peak season can help companies navigate the challenges and uncover new opportunities. DHL is dedicated to working closely with companies, and to creating custom-shipping solutions so they can begin or continue to expand their businesses beyond the U.S. borders.
See here for the full survey results. Follow @DHLUS on Twitter and Instagram for timely information and updates.
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