For retail merchants, holiday planning begins now

The holidays may still feel far off, but summer is the perfect time for small businesses to gear up for the holiday rush – and it looks like shoppers won’t be far behind.

According to research from Capital One Shopping, 55% of holiday shoppers make holiday sales purchases before Thanksgiving, and by the Thanksgiving weekend, 85% of consumers have started holiday shopping.

To ensure they’re attracting early shoppers, major retailers are making changes to how they get set. Four of the 10 largest U.S. retailers started holiday sales in October or early November last year, and general holiday advertising started even earlier.

This year may also prove to be a more competitive environment for small businesses as they vie for a share of more careful holiday spending. According to a report from Bread Financial, 87% of shoppers in 2024 said inflation affected their holiday purchases – a slight increase from 84% in 2023. The report said that smart shopping strategies, like watching for discounts and waiting for major sales, are likely to prevail in 2025.

Despite consumer concerns around the economy and inflation, there are ways merchants can capitalize when shoppers are receptive to spending.

Here are five things to consider to get the biggest and most lucrative retail season right:

1. Consumers shop early to avoid shortages

Fear of missing out prompts some consumers to order popular items early, so retailers should focus on managing inventory.

July and August are the best months for small business owners to plan their holiday inventory needs, according to Forbes, especially for items that have long lead times for delivery.

To assess holiday inventory needs, many retailers use the following best practices:

• Dive deep into your data from previous holiday seasons. Which products had the best profit margins? What trends were popular? When did sales peak?
• Determine delivery dates for your critical products. Items with longer lead times should be ordered now, and there may supplier discounts when merchants order early or pay upfront.
• Understand your cashflow position to ensure you can finance holiday inventory. If the funds aren’t there, merchants still have time to explore financing and lending options.

Harnessing data to create a holiday sales strategy isn’t always easy for small businesses, especially when the information is stored across multiple business systems. Technology platforms like Commerce360 house all that data in one place, and offer reporting tools that empower retailers to make informed business decisions.

2. Shoppers want to pay how and when they choose

During the 2024 shopping season, U.S. shoppers relied heavily on debit cards, followed by cash and a wide variety of bank-branded and retail-branded credit cards. At the same time, buy now pay later, digital wallets, and other digital payment methods continue to grow in popularity.

“This holiday shopping season, it’s critical retailers make in-store and online purchases as frictionless as possible,” says Shae Orrick, senior product manager at Worldpay. “You don’t want to lose the sale because you don’t accept your customers’ favorite ways to pay. Investing in the latest payment solutions for the holiday season now will continue to pay off in the months and years ahead. We’re projecting that 53% of in-person shopping value will be transacted via mobile devices by 2030.”

You don’t want to lose the sale because you don’t accept your customers’ favorite ways to pay.

3. Shoppers are looking for sales and promotions – are yours set?

Most retailers have already scheduled their sales windows, but now is the time to take stock of whether the plan is right or whether to pivot. Based on business performance, demand for items, macroeconomic factors and other trends, the quieter months are when to evaluate how to make the most of the busier weeks ahead – preparing for Black Friday and Cyber Monday, as well as newer key shopping days like Small Business Saturday. Given the move to earlier holiday shopping, retailers may also consider holding pre-holiday sales in the weeks leading up to Halloween and Thanksgiving.

Whatever holiday sales strategy you choose, make sure you’re equipped with all you need to succeed.

4. It’s in their hands: Gift cards continue to grow in popularity

Gift cards are always popular due to the flexibility and convenience they offer. Last year, 44% of shoppers said they planned to give gift cards during the holidays – more than electronics and jewelry combined.

Retailers of all sizes can take advantage of this trend. Not only can small businesses capture more sales when they offer gift cards, they can also set up repeat visits and drive customer loyalty by offering this no-wrap option for customers’ “impossible-to-buy-for” loved ones.

• Tip: Retailers still have time to use the latest technology solutions, like Commerce360, to create custom gift cards and other loyalty programs before the holiday rush.

5. Shoppers want to know their transactions are safe

An increase in shopping volumes inevitably means an increase in fraud attempts, which can be catastrophic for small businesses. When looking for fraud protection tools, make sure the solution can:

• Identify fraud and block attacks.
• Incorporate sophisticated machine learning.
• Offer easy to install and implement solutions.

If small businesses follow these tips, they’ll be well-prepared for the holiday shopping season this year, whenever it kicks in.

Worldpay customers can get more ideas to make the 2025 holiday shopping season successful, and learn more about Commerce360, by contacting their Worldpay representative. Or visit our small business hub.