UK SME e-retailers planning to combine clicks with bricks to boost 2014 sales

royal mail logoUK SME online retailers are planning to combine clicks with bricks to boost sales in 2014, a study by Royal Mail has revealed.

One in six UK SME e-retailers is planning to expand into physical stores during this year as online competition for sales grows, the study found. Sixteen per cent of all UK SME online retailers expect to either open a physical store or seek space in one to increase sales in 2014. In addition, 15% of UK SME e-retailers are planning to expand by using online marketplaces to sell their goods.

In total, 40% of the UK’s SME online retailers are planning to start trading from new channels in the coming 12 months to increase sales.

Annual tracker shows online competition is growing
Royal Mail’s annual tracker study into the expectations and challenges facing UK SME online retailers revealed more than half (56%) are confident sales will increase in 2014. However, with the number of new market entrants meaning online competition is increasing, this is down on the 64% of UK SME online retailers who were confident of growing sales a year ago.

The study found 54% of more than 400 UK SME online retailers surveyed believe competition for online shoppers is more intense than last year. Six in 10 (59%) said this was because there are more websites to compete with. Fifty seven per cent said customer price sensitivity was a reason for increased competition.

In addition, the research found pricing more competitively has overtaken increasing the range of goods available as the top priority for increasing customer satisfaction. Increasing the quality of products was the third most popular priority for 2014 despite being ranked the top reason by UK SME online retailers for customer satisfaction both last year and in 2012.

Nick Landon, managing director of Royal Mail Parcels, said: “Royal Mail’s annual tracker study of UK SME online retailers shows that while the majority expect to increase sales, competition is more intense than it was last year.

“UK SME online retailers are thinking carefully about how they can develop their businesses during 2014. They are concentrating on exploiting as many channels to market as possible, adding space in physical premises and online marketplace listings to complement their existing web channel. In addition, they are concentrating on how to price competitively while increasing the range and quality of their goods.”

  • Simon

    Agree with the above. The costs involved in moving into a shop based business are massive (add staffing costs to your list). I tried it but it a year later I gave up and just focussed on my online shop (which is doing really well). It will depend on the footfall & location as to whether you get a steady stream of customers. Think twice before taking the plunge!

  • Maire

    Those who have a successful online business need to be really sure about venturing into the bricks model, there will be a need to justify the move as fincances / sales income will be the make of break in terms of affordability (lots of bills, rates & taxes to pay). With the online business at least you have a potential global market and can take orders 24/7 and you don’t have the high outgoing costs associated with a physical shop.