New Union Bank Survey Finds U.S. Consumers Willing to Spend More to Support Small Businesses This Holiday Season
43% of U.S. consumers are willing to spend $20 more on an item to support a small or local business vs. saving $20 and purchasing from a large retailer
LOS ANGELES, Nov. 20, 2020 /PRNewswire/ -- In the midst of a pandemic and a difficult year, holiday shoppers are focused on supporting their local small businesses. Seven in 10 consumers say it's more important to support small businesses than to get the best deal, and four in 10 are willing to spend $20 more on a purchase to support them, according to new research from Union Bank, a leading West Coast bank.
According to the Union Bank Small Business Holiday Spending 2020 Survey, 74% of U.S. consumers feel an increased sense of responsibility to support their community this year and over half say they've already increased how much they shop and spend at small businesses to help keep them afloat during COVID-19. Even more compelling, 54% say they're specifically planning to shop at minority-owned small businesses.
"Holiday spending is often the most significant financial inflection point for small businesses each year. However, this year will look much different, as many people continue to adapt to stringent closure guidelines and recover from the overall economic impacts of the pandemic," said Todd Hollander, Head of Business Banking and Small Business for Union Bank. "Small businesses are the backbone of our local communities and sales during the holiday season are often critical to a business's success. These survey results reinforce that our communities feel a sense of responsibility and are rallying to help businesses continue to recover and thrive through the 2020 holiday season."
To gear up for the holiday season, small businesses have an opportunity to promote themselves, as 35% of U.S. consumers say that one of the biggest barriers to shopping at small businesses is a lack of awareness or little advertising. More specifically, when asked what drivers would make them more likely to spend at a small business this season, U.S. consumers cited the following as most important:
- 60% said offering holiday sales, discounts, promotions
- 51% said offering online ordering
- 46% said offering safety measures (mask requirements, social distancing, curbside pickup, local delivery, contactless payment, etc.)
"Now more than ever, small businesses need to tap into their entrepreneurial spirit and continue to be creative in implementing new strategies to keep consumers motivated to spend with them," said Hollander. "Fortunately, it's not too late to ramp up marketing efforts, including social media, to showcase not only any holiday specials but also any safety measures and conveniences that have been put in place. Consumers want to know they can support local businesses safely."
The findings also indicate that this holiday shopping season will revolve less around big shopping events, with only one in five planning to do most of their shopping on Black Friday and/or Cyber Monday.
Despite U.S. consumers' focus on supporting small businesses, the survey revealed some financial hurdles, as most consumers are planning to spend less this holiday season compared to last year – particularly on travel (62%) and restaurants (52%). The only exception is retail, where 49% of U.S. consumers plan on spending the same or more this year. The survey identified several specific financial factors affecting U.S. consumer holiday spending year-over-year, including one in four saying they've suffered a job loss or hour/wage reduction, and one in four saying they're trying to save more.
Californians are doubling down to aid small businesses this holiday season.
California-based consumers are feeling especially generous this holiday season, with 51% saying they'd spend $20 more on an item to support a small or local business vs. saving $20 and purchasing from a large retailer, compared to 43% of national respondents.
Californians seem to understand the value and significance of supporting their local community, with 68% saying it's more important to support small businesses than to get the best deal or discount this holiday season.
Additionally, California consumers are also taking seriously their responsibility to local minority-owned small businesses, as 56% say they specifically plan to shop at minority-owned small businesses this holiday season.
"From retail gifts and gift cards for a variety of services to restaurant take-out, we all have a key role to play during this economic recovery process," Hollander said. "I'd like to call on all of our Union Bank clients and larger West Coast community to continue supporting local small businesses this holiday season – the long-term impact will be significant and uplift many in your local communities when they need us most."
About the Union Bank Small Business Holiday Spending 2020 survey
Research was gathered through an online survey commissioned by Union Bank and conducted by global independent research firm Edelman Intelligence. The survey was completed by 2,677 Americans (age 18+), sampled to be nationally representative. Data was collected between Nov. 9 and Nov. 11, 2020. The margin of error is +/- 2 percentage points.
About Union Bank
Union Bank is a full-service bank with a rich history of investing in our clients, communities and colleagues throughout the West Coast for more than 150 years. Union Bank provides a wide range of personal and business banking products as well as wealth management services. With nearly 340 branches in California, Oregon and Washington, Union Bank remains committed to serving the needs of its local communities. As a member of the Mitsubishi UFJ Financial Group (MUFG), one of the world's largest financial institutions, Union Bank holds our clients' best interests to heart and remains committed to investing in their success.
About MUFG Union Bank, N.A.
As of September 30, 2020, MUFG Union Bank, N.A. operated 348 branches, consisting primarily of retail banking branches in the West Coast states, along with commercial branches in Texas, Illinois, New York, and Georgia. We provide a wide spectrum of corporate, commercial, and retail banking and wealth management solutions to meet the needs of our clients. We also offer an extensive portfolio of value-added solutions for clients, including investment banking, personal and corporate trust, global custody, transaction banking, capital markets, and other services. With assets of $132.5 billion, as of September 30, 2020, MUFG Union Bank has strong capital reserves, credit ratings, and capital ratios relative to peer banks. MUFG Union Bank is a proud member of the Mitsubishi UFJ Financial Group (NYSE: MUFG), one of the world's largest financial institutions with total assets of approximately ¥348.4 trillion (JPY) or $3.3 trillion (USD)¹, as of September 30, 2020. The corporate headquarters (principal executive office) for MUFG Americas Holdings Corporation, which is the financial holding company, and MUFG Union Bank, is in New York City. The main banking office of MUFG Union Bank is in San Francisco, California.
1 Exchange rate of 1 USD=¥105.8 (JPY) as of September 30, 2020
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