How Important Is The Holiday Shopping Season For Retailers?

How important are the holidays to retail

Ask any retailer, and they will tell you that the holiday season in retail is very important to the bottom line.

The holidays can have the potential to make or break a retail business. What is it about the holidays that impact retailers so much? The holiday season, commonly defined as November through December, is considered a retailer’s gold mine. It’s when Americans spend the most and retailers gain the most.  

History of the Holiday Shopping Season

Commercialized gift-giving in the United States was primarily believed to have started in the 19th century during the Industrial Revolution when manufactured holiday gifts became affordable to the middle class for the first time.

America’s first department store, Macy’s, was founded in 1858 and propelled the holiday shopping season. It allowed Americans to buy newly manufactured items from stores rather than making handmade gifts like Christmas cards and filling stockings with fruit and nuts that people usually exchanged at Christmas.

Storekeepers began marketing goods for the holidays, offering gift-wrapping services and selling regular items they had festively decorated. During the first holiday shopping season, some common gifts were factory-made toys and ornaments mass-produced from inexpensive materials. In 1856, the magazine Harper published the famous words, “Love is the moral of Christmas…What are gifts but the proof and signs of love!”   

Present Day

Since then, retail shoppers and business owners have benefitted from the holiday season, getting progressively busier each year. Though we’re still suffering from the pandemic and supply chain problems, the 2021 holiday shopping season is expected to grow in sales by at least 7% compared to last year.

Even with most brick-and-mortar stores open without restrictions, e-commerce sales are expecting to make up to 18.9% of total holiday retail sales this year. Many shoppers are making their holiday purchases online because it’s safer and because it’s more convenient. If you have a brick-and-mortar store, it would be wise to consider implementing an online store or another way for patrons to purchase from your shop via the internet.

Online shopping is growing

Additionally, 44% of shoppers say they’ll be spending more money this holiday season, and nearly half claim to be bargain shoppers. Furthermore, 57% say that they’ll purchase at the biggest discounts they can find. With that information, retailers can utilize it to their advantage by getting started with their holiday preparations now.

According to the Census Bureau, 2020 brought historic holiday sales with an 8.2% increase from the previous year. Furthermore, according to the National Retail Federation, industry sales in 2020 totaled $777.35 billion (yes, with a “b”). To help accommodate the influx of holiday shoppers, Walmart CEO Doug McMillon said they’d be hiring 20,000 supply chain employees to keep up with the demand.

More demand meets more delays

As important as the holidays are, this year is going to be a little different. Currently, there are supply chain issues impacting all businesses and consumers. These issues are primarily due to shipping backups from limited container vessels, and ongoing interruptions are inevitable. 

Plus, because of industry-wide shutdowns, labor shortages, and port congestion, many manufacturing and delivery operations phases are even more delayed than usual. Many believe the holiday shopping season has already begun.

Over 40% of holiday shoppers are claiming to start earlier than expected. Many big box stores have already launched their holiday pricing earlier than ever. Many experts are predicting Black Friday and Cyber Monday to be as busy as ever.

Tips for Business Owners

The good news is, as long as small businesses prepare, they should be fine. While planning, keep in mind that many shoppers make their holiday purchases online because they consider online shopping safer and more convenient. If you have a brick-and-mortar shop, it is wise to consider implementing an online store or another way for patrons to purchase via the internet. With more consumers opting to buy online, retailers need to make accommodations to ensure they get a piece of the holiday pie.

Business owners can set themselves up for success by providing their customers the best shopping experience possible:

Offer free shipping

Many shoppers will opt to purchase from buyers who offer free shipping, even if the cost is the same as what someone else charges, including shipping.

Make sure you stay stocked

The last thing you want is to miss out on sales because you’ve allowed your merchandise to run out.

Ask for feedback

Encourage your customers to give comments and suggestions of how to improve.

Provide stellar customer service

Staying accessible as business owners and making the return/exchange process quick and easy can help give the best customer experience possible.


The holiday season is generally the most critical time of year for many retailers and has been for a very long time. Even with the challenges of 2021, there are plenty of opportunities for business owners to expand and grow. Keeping your customers in mind and preparing in advance will lead your business through a successful holiday shopping season. 


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Alison Sperling
Alison is the Director of Marketing at Payability. She has 10+ years of experience in marketing helping small businesses and startups find new tools to grow their business. Prior to Payability, Alison started the marketing team at Stack Overflow. Alison completed an MBA with a concentration in Finance from Syracuse University in 2011. She volunteers with several cat rescue organizations.

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