Report: Online Commerce, Pricing Among Top 2024 Priorities for Small Retailers

It was early 2023 when the team at Moriarty’s Gem Art, a jewelry shop in Crown Point, Indiana, started discussing the need to prioritize online sales after reviewing the 2022 holiday season’s numbers.

“We decided to take the open days in our physical store down to two days a week from five,” says Jeff Moriarty, the company’s marketing director. “Online has become so big for us and we have a small team; we couldn’t keep up with in-store and online at the same time.”

The family business made the switch in April 2023 after alerting customers and putting signage in front of their store. Since then, in-store days have been busy and online business is booming.

An Increase in E-Commerce

This example reflects findings in the Small Retailer Report, a September 2023 American Express survey of 500 small-business retail decision makers with between five and 500 employees. According to the report, in the past six months, 53% of small businesses report seeing most of their sales growth via online or e-commerce – a bump from 49% last year.

There is a lot of pressure to raise prices right now. You have to think about how high you can really go and what's in line with the integrity of your brand.

—Amy Landino, founder, Amy Landino & Co.

The report also discussed the impact of social media on small retail-focused businesses. Those companies are selling more – specifically on Instagram and Pinterest – than ever. In 2023, 80% of businesses reported selling using Instagram, compared with 51% of businesses in 2022. Also this year, 32% of businesses are selling on Pinterest, compared with just 11% last year. Selling on Facebook essentially held steady, from 81% of retailers in 2022 to 80% in 2023.

The boom in social media selling isn’t surprising to Amy Landino, founder of Amy Landino & Co, a digital-only business selling products like planners, mugs, and her own books. Landino has seen an enormous uptick in sales from Instagram in 2023. 

“If I post an Instagram Story, it gets a tenth of the attention organically from my followers than if I post a Story that has a shoppable link – and this is new, maybe just in the past six months,” she says. “Stories are so approachable. People are clicking through and purchasing. It makes me more excited to use the platform.”

Engaging Loyal Customers

Loyalty programs can be important for small retailers. The report found small retailers saw 59% of their revenues come from repeat customers in 2023. In fact, 70% of the retailers who don’t have a loyalty program will likely create one in the next six months, the report found. 

Along with that, many of these businesses promote their shops as social and engaging gathering places to further connect with customers: 73% are planning in-store experiences in the next six months. Moriarty’s Gem Art will host an in-person 'Guy’s Night Out' this month, where the store will supply wine and beer and men are encouraged to shop for jewelry items before the holiday season.

Pressure to Raise Prices

In 2023, 68% of small business owners report inflation and rising production costs as top challenges, versus 49% in 2022. As that happens, many small-business owners face pressure to raise prices. 

According to the report, the need to increase prices is a top challenge for 68% of small business owners in 2023, compared with 36% in 2022. Moriarty says his company realized it's been underpricing and will slightly raise prices. Landino is trying not to raise prices, but she's seeing supply costs increase dramatically – and says fellow business owners in the publishing industry are in the same boat.

“The costs for what we create skyrocketed during COVID, specifically when it comes to printing,” she says. “Unfortunately, that has not leveled out. For me, there's only so high I can go with my product. There's a lot of pressure to raise prices right now. But you have to think about how high you can really go and what's in line with the integrity of your brand.”

Finding the Right Employees

The survey also found small-business owners are facing labor shortages, inspiring 40% of them to invest more into cash-flow management tools like payroll systems and time tracking software programs to offset losing employees or struggling to find the right ones.

Finding the ideal employees for the job is a particular challenge for Moriarty as the team is mainly family members, all of whom are well-versed in the jewelry industry.

“I imagine it would be easier to find people if we were in a big city,” he says. “The last person we hired – not a family member – worked at another jewelry store in town, which was great. But before that, we’d post things on the big career sites and no one had the experience we needed.”

Small Business Saturday 2023

As for capitalizing on the holiday season, the study found small retail owners are eager to hit the ground running: 48% plan to participate in Black Friday, 39% for Cyber Monday, and 38% for Small Business Saturday.

Moriarty is excited for Small Business Saturday this year, he says. The company is located around the town square and usually provides drinks and snacks for shoppers.

“This year our town has more high-end stores that are into collaborating, so I think Small Business Saturday is going to be huge,” he says. “It ends up being a great day for our company and the community.”

The Small Retailer Report was based on an online survey of 500 self-identified small-business retail decision makers relating to shopping trends, strategies, and holiday season planning. The survey was commissioned by American Express and conducted by Morning Consult between August 25-September 7, 2023. For this survey, the definition of a decision maker was a person in a leadership position who is accountable for the success of the business and/or are an authority about its operations, revenue growth, or employee retention.