Small Biz vs. Big Box: Who Wins?

Date: December 21, 2015

It’s a battle out there for holiday shoppers. Guess who seems to be beating out the competition.

This holiday season, there’s a war going on—a war for shopping dollars. And it’s being waged between Walmart, Target and their big-box compatriots, and the small business retail stores of Main Street, USA.

Who’s winning?

“If current consumer trends are any indication, these small players are poised once again to outsell their mainstream competitors during the holiday shopping season and beyond,” according to CNBC.

Over the past 20 months, small businesses have accounted for 72 percent of the growth in total retail sales, MasterCard reported.

Big-box stores still get most of the volume, though. More shoppers said they plan to hit big-box stores (63 percent) and malls (53 percent) than local, independent stores (42 percent), in a Deloitte survey.

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That Personal Touch

Shoppers want a shopping experience that feels personalized, and mass-produced gifts just don’t cut it.

“I do think that uniqueness is what everybody’s chasing,” Rod Sides, leader of the retail and distribution practice at Deloitte, told CNBC. “Whether it be a unique experience or whether it be a unique gift, those local boutiques kind of have that flair.”

More than half of shoppers (54 percent) said they’d shop local to find one-of-a-kind gifts, according to the Deloitte study.

BEAT THE BIG BOXES! Learn how to make this holiday season as profitable as possible.

Consumers are also willing to explore new options: Seventy-two percent said they’d shop at different stores this holiday season—and more than two-thirds of those people said they’d do so at a small or local business, Deloitte reported.

Getting Crafty

Sixteen percent of consumers said they plan to give homemade or craft items—a new entry to the Deloitte survey.

“Given that more than 60 million consumers are believed to make arts and crafts products annually, this is a category for savvy retailers to not only watch but also consider embracing and/or incorporating into their existing product offerings,” the report read.

RELATED: Will this holiday season be naughty or nice to small business?

Do Discounts Decide All?

Big-box stores know they’ll always win the pricing game, being able to offer deeper discounts. But small businesses that offer unique offerings can get away with charging a bit more.

“As the economy improves and consumers are inundated with discounts, analysts have repeatedly said that those retailers with unique merchandise will be able to charge higher prices,” CNBC reported.

And that’s where small businesses have an advantage. “Unique product offerings not only help get consumers in the door; they can also neutralize competition based on price, since consumers can no longer merely compare prices for an identical product,” the Deloitte report read. 

Thanks, Millennials

A large part of the shop local movement has been driven by the younger generation.

“Millennials have a different view of the world,” Chris Poelma, president and general manager of small business at NCR, a technology company, told CNBC. They understand that shopping local means they’re supporting their community.

RELATED: How millennials are disrupting retail

“Small businesses are still the backbone of American retail,” Steve Noll, a marketing professor at Madison College, told Channel3000.com, a CBS affiliate. “A lot of people talk about these big, huge corporations but really a lot of money, especially a lot of the money that stays in a local community, comes from small business.” 

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