Small-to-medium businesses (SMBs) in Australia and New Zealand are feeling the brunt of inflation more than the United States (US), United Kingdom (UK) and Canada, according to a 2024 study by global digital marketing and automation platform, Constant Contact.

The Small Business Now: Holiday Crunch report found that, in response to inflationary pressures, three in five (60%) ANZ consumers are reducing spending at SMBs – the highest of any region polled. Further, 43% of ANZ SMBs have had to increase costs to combat inflation – slightly below the global average (44%).

Constant Contact vice president of Asia Pacific, Renee Chaplin said, “Small businesses make up almost 98% of businesses in Australia and New Zealand. Supporting them right now will genuinely help some of these businesses survive the economic storm.

“Big businesses have the economy of scale to weather inflation and decrease costs in the face of competition. But small businesses are rarely in this position and instead need to find ways to stay top of mind and connect with the community to keep them coming back.”

Unlike the US, Canada and the UK, ANZ SMBs are less reliant on spending over the Christmas and New Year period to boost spending.

In ANZ, SMBs report to have the most evenly distributed dependency throughout the year, with just 29% feeling the most pressure to drive revenue during Q4 – the lowest among polled regions.

“It’s clear that SMBs are missing an opportunity to further drive revenue in what is typically the busiest spending season of the year for many industries – particularly at a time when, regardless of inflation, people are looking to spend more than usual. It comes down to marketing and being prepared in areas like labour and training for staff. SMBs in Australia and New Zealand seem to be lagging behind their global counterparts,” Chaplin said.

The report found that ANZ consumers begin to plan on spending over the Christmas and New Year period at the last minute. Close to three-quarters (72%) of ANZ consumers typically only start thinking about end-of-year spending from October onwards, with 26% beginning their end-of-year spending plans in October, 28% in November and 18% in December – the latter of which is the highest among polled regions.

“The opportunity is there for SMBs to drive revenue at a time when local customers are looking to spend in what, comparatively to the world, is a relative flurry. But much like their customers, A/NZ SMBs are leaving things to the last minute when it comes to marketing and promotion,” Chaplin said.

SMBs in the ANZ region tend to start marketing for the end-of-year rush later than in other regions, according to those surveyed. Nearly half (48%) of ANZ SMBs surveyed wait until Q4 (18% in October, 20% in November and 10% in December) to start preparing their marketing for the peak spending period of Christmas and New Year.

“When customers do have money to spend, SMBs need to have those customers thinking of them first. Now granted, ANZ consumers typically start to think about holiday shopping later than other regions, but that’s no reason to wait. In tight economic times, being first to market and working hard to be top-of-mind is not only smart, it’s good business practice,” Chaplin explained.