Small businesses say cautious shoppers are seeking 'cozy' and 'festive' this holiday season

After the busy Black Friday holiday weekend, Kristen Tarnol, owner of Emerald City Gifts in Studio City, California, is already asking her supplier to send more more fuzzy alpaca scarves and warm slippers that were best sellers over the weekend.

“Even though it’s Los Angeles … I think people are looking for cozy items, really,” she said.

With a late Thanksgiving, the holiday shopping season is five days shorter than last year, and owners of small retail shops say people have been quick to snap up holiday décor early, along with gifts for others and themselves. Cozy items like sweaters are popular so far. But there’s little sense of the freewheeling spending that occurred during the pandemic.

Overall, The National Retail Federation predicts retail sales in November and December will rise between 2.5% and 3.5% compared with same period a year ago. Online shopping is expected to grow too. Adobe Digital Insights, a division of software company Adobe, predicts an 8.4% increase online for the full season.

Comfort and 'whimsy’

Some owners say shopping has been erratic so far this holiday season. Nathan Waldon, who owns Nathan & Co., with two gift shops in Oakland, California, said he had his best Black Friday ever, with sales up 32%. But business slowed dramatically after that. He’s hoping it picks up again soon.

“I still feel like I’m optimistic for the season,” he said. “But it’s definitely going to be one of those roller coaster seasons again.”

He said comforting items are selling: Scarves, hats and gloves, humorous Christmas and Hanukkah cards and bright colors.

“People want that sense of whimsy, that sense of fun,” he said. ”A couple of seasons ago everything was sort of muted and earthy, and now everyone is craving happy colors.”

One of his top sellers is a bright pink sweater with the word “Merry” written in big letters that sells for $120. But generally, shoppers are looking to spend less than half of that, he said.

“It could be they could buy the $25 item, but then they’ll add on a little something extra,” he said. “It seems to me that the sweet spot is between 40 and 50 bucks.”

Bouncing back

Small businesses in some parts of the country are hoping holiday shopping helps them recover from extreme weather during the year. In Florida, Jennifer Johnson, owner of consignment shop True Fashionistas in Naples, Florida, had a slow summer season, partly because the area was hit by three hurricanes this year. She decided to increase her Black Friday weekend discount this year to draw in shoppers – offering a 25%-off deal rather than the 18% to 20% she normally offers.

It worked. The store had record sales days over the weekend. People snapped up festive Christmas outfits and Christmas décor. The Christmas décor, including ornaments, candles and other home decorations, is selling faster than last year, she said.

“Last year we were out of Christmas stuff like by the second week of December, and we’re almost out of it now and it’s only the first week of December,” Johnson said.

As for clothing: “anything sequins, anything that has had bedazzling on it, anything that looks fine and festive is what they were buying,” she said.

At her three Philadelphia-area Serendipity shops that sell clothing, accessories and home goods, owner Nicole Beltz also faced weather-related challenges in foot traffic over the year, including snow in the first quarter, a lot of rain in the second quarter and extreme heat in the third quarter. An unpredictable economy and tough competition on pricing from bigger chains were also obstacles during the year.

During the Black Friday weekend, she offered 20% off for orders of $75 or more and 30% off orders of $150 and more. Last year she just offered discounts on select items, not blanket discounts.

“We gave out our biggest incentive ever for shoppers to come out with discounts and promos. I certainly think that that was necessary this year,” she said.

Beltz’ customers gravitated toward prices either under $20 or around $100. At her shops, Philadelphia Eagles and Taylor Swift merchandise were the top sellers, including $14 socks and $99 sweaters.

“One is the impulse category, where if it’s under $20, they’ll buy it. No matter what,” she said. “And then the second category would be for really people that are coming in looking for a gift. We’re pushing the $100 sale. We try to keep our best sellers, like those sweaters and those items that people are really grabbing for a nice holiday gift at $99, right under the $100 mark.”

'Extra touch'

Not all small businesses can use discounts to drive business, since margins are often tight.

Between Friends Boutique in Philadelphia is using events to drive holiday traffic instead. They held a “Sweater Explosion” event at 8 a.m. on Black Friday where they served hot apple cider and hot chocolate with marshmallows and promoted different styles of sweaters.

Sweaters under $100 were big sellers, along with $25 reversible silk scarves that feature art from impressionists like Monet.

“Our customers appreciated that little extra touch of laughs during the holidays. Coming in and smelling the cinnamon in the air felt like the holidays have arrived,” co-owner Claudia Averette said. Sales are up so far from last year, she added.

They’re also hosting a “Bourbon and Bow Tie” event on Dec. 20 to promote the fact that they carry men’s accessories as well, like bow ties, socks and scarves.

An event helps get exposure, Averette said. “It’s a great marketing strategy,” she said.