For many businesses in South Austin, the holiday season represents the busiest and most important time of the year. Local retailers, who frequently see their largest profits in November and December, could struggle the following year if revenues do not meet expectations.
C’est Chic! boutique co-owner Melissa Greenwell told Community Impact Newspaper that in 2018, the South Austin store made about 36% of its business for the year in the holiday season. While there are other peaks throughout the year—like around Mother’s Day and graduation—January, February and the summer months represent challenging dry spells, and revenue from the holidays compensates for that.
Each winter, the store—which has been open in Circle C Ranch for 10 years—closes for two days in early November to prepare for the holidays. Greenwell said her staff works like “little elves” to transform the store with holiday decorations and to restock the shelves with gift ideas.
“The holidays are super important,” she said in preparation for the store’s Nov. 15 holiday kickoff event. “We all work more hours for the holidays.”
In Dripping Springs, Mazama Coffee Co. founder Vicky Lewis said there are a number of events that bring people to the city’s business district on Mercer Street over the fall. Those include Shop Small Saturday on Nov. 30, hosted by the Dripping Springs Chamber of Commerce, and the city’s Christmas on Mercer event Dec. 7.
“It’s going to be a hectic couple of months for us, but we’re gearing up for it,” Lewis said. “The holiday season and the cooler weather increases our business naturally this time of year.”
The impact of holiday commerce
According to the American Independent Business Alliance, for every $100 spent at a local business, around $48 gets reinvested into the local economy. That number compares to around $14 when shopping at a national chain, and even lower numbers when shopping online. That is because when people shop locally, local businesses invest profits locally, and employees spend salaries on local goods and services, according to the alliance.
For cities, the sales tax revenue generated during the holidays can have a huge impact on city operations throughout the year. In Sunset Valley, where there is no city property tax, local sales tax makes up about 93% of all general fund revenues in the city, according to the city’s fiscal year 2019-20 budget. Having a healthy local economy and economic development is key to maintaining the city’s current way of life.
Dripping Springs’ sales tax accounts for about 42% of operating revenue, according to its 2019-20 budget. In an effort to bring in those dollars, Susan Kimball, Dripping Springs Chamber of Commerce president, said the chamber is working to make the city more of an everyday destination, not just one for the weekend and wedding crowds. Events such as Shop Small Saturday—held just after Black Friday—in which the chamber gives away local gift cards to participants, can give exposure to businesses and bring customers back to the city, she said.
“We’re really trying to encourage people to go back and shop [in Dripping Springs] a second time, just to give businesses more exposure,” she said.
Challenges for small business
Vince Contreras—who has owned Bee Cave Jewelers for 30 years, 20 of which have been at the South Austin store on Slaughter Lane—said the emergence of online shopping has slowed the holiday rush a bit in recent years.
“That is fading away,” he said. “It used to be [you could do] 60% of your sales during the holidays, but it may be 30%-40% now.”
Kimball said the rise in online shopping presents numerous challenges, including limiting exposure for local businesses and slowing traffic overall. The convenience offered by online shopping also gives it an advantage over smaller shops that may have limited hours or inventories.
“I think it’s hard [competing] with online,” she said. “I don’t know anyone who doesn’t shop online at least sometimes. That’s just the reality.”
According to Kimball, even when a local business does have a strong online presence, that success can adversely affect neighboring shops. As more shoppers choose online instead of heading out to a shopping center in person, it limits the revenue potential for other local businesses in the area. Traditional shoppers may visit two to three stores in one shopping trip, and grab a drink or bite at a local cafe while out for the day. Online shopping eliminates a lot of that potential crossover shopping.
While Black Friday is traditionally a big draw for businesses, Kimball said many Dripping Springs residents leave town for part of the holiday weekend. Others head to larger cities for the convenience of shopping at malls and national retailers, which tempers Black Friday potential for local businesses outside of Austin.
“You can push shopping small, but you can’t find everything out here,” she said. “I think [the area] could end up being more of a big deal as new businesses open and develop.”
To cash in on the holiday rush, businesses offer sales and participate in local events to reach out to locals. The decorations at C’est Chic may catch a shopper’s eye and draw them to the store, but Greenwell said the store also offers sales, complimentary gift-wrapping and a gift registry that allows customers to log their favorite items.
C’est Chic also partners with local charities during the holidays. Greenwell said this year the store is working with Carrying Hope, which provides backpacks for children entering foster care. Last year Bee Cave Jewelry also worked with a local animal shelter during the holidays, offering discounts to those who donated items, such as towels and food. Lewis said Mazama coordinates specials and events with some of the citywide initiatives in Dripping Springs.
“We offer drink and bakery specials throughout the year and just keep them coming over the holidays,” she said.
According to Contreras, sticking with simple techniques such as advertising, offering custom products and offering “excellent service” helps get people in the door at Bee Cave Jewelers.
“We managed to hang on [for 20 years] because we used to know some very good clients who, some have come back,” he said. “It’s mostly word of mouth, more like a friendship thing, because they go tell somebody else [about us] and it’s like a chain reaction. Every little bit can bring out a new person.”