UK SME online retailers plan to increase their use of online marketplace sites, Royal Mail study finds

FacebooktwitterredditpinterestlinkedinmailFacebooktwitterredditpinterestlinkedinmail

UK SME online retailers are planning to increase their use of online marketplace sites, such as eBay and Amazon Marketplace, as they target growth in 2015.

Royal Mail’s annual tracker study into the expectations and challenges facing UK SME online retailers revealed the sector is in positive mood for the year ahead with seven in ten businesses expecting sales to increase

The optimism for growth – which is up nine percentage points on last year – is despite 76% of SME online retailers saying competition is more intense than a year ago

The study found that 63% of UK SME online retailers are planning to increase the number of channels they trade through in 2015 to grow sales. One in four (24%) e-retailers plan to start using online marketplaces to increase sales. A further 21% plan to open a shop and one in six (16%) are planning to take out space in a store to sell their goods

Six in 10 (58%) UK SME online retailers surveyed reported an increase in sales in 2014, up from the 49% who reported growth in 2013

Delivery when expected jumped to top of the rankings for factors driving customer satisfaction last year, followed by the price of goods in second place and quality of the product, which was ranked third

UK SME online retailers are increasingly recognising the importance of providing a good returns process for online shoppers, the study found. Three in 10 (27%) UK SME online retailers will be simplifying the returns process in 2015 to increase customer satisfaction. The top initiative will be increasing the range of goods but pricing more competitively dropped down the rankings to third place

UK SME online retailers are planning to increase their use of online marketplace sites, such as eBay and Amazon Marketplace, as they target growth in 2015.

Royal Mail’s annual tracker study into the expectations and challenges facing UK SME online retailers revealed the sector is in positive mood with seven in ten businesses expecting sales to increase in 2015.

The optimism for growth – which is up nine percentage points on last year – is despite 76% of SME online retailers saying competition is more intense than a year ago. The increasing number of websites was the top reason for rising competition (67%), overtaking price sensitivity (42%) which ranked first last year.

Targeting online marketplaces for growth

The study found that 63% of UK SME online retailers are planning to increase the number of channels they trade through in 2015 to grow sales. One in four (24%) e-retailers plan to start using online marketplaces to increase sales. A further 21% plan to open a shop and one in six (16%) are planning to take out space in a store to sell their goods.

Delivering sales and customer satisfaction in 2014

Six in 10 (58%) reported an increase in sales in 2014, up from the 49% who reported growth in 2013, the study found

Delivery when expected (62%) jumped to top of the rankings for factors driving customer satisfaction last year. The price of goods (52%) was ranked the second most important factor. The importance of the quality of the product fell. In the study, 44% of online retailers said this was a key factor, compared with 66% last year.

Meeting customer needs in 2015

UK SME online retailers are increasingly recognising the importance of providing a good returns process for online shoppers. A third of retailers surveyed said a simple returns process was a key factor to customer satisfaction last year, up from 23% in 2013. Three in 10 (27%) UK SME online retailers will be simplifying the returns process in 2015 to increase customer satisfaction. This is up from 11% last year.

Increasing the range of goods (51%) will be the top initiative for increasing customer satisfaction in 2015. Four in ten (41%) said they will be improving the range of delivery options in 2015, which compares to 21% in 2014. Pricing more competitively (32%) fell to third in the rankings from last year’s second place.

Nick Landon, managing director of Royal Mail Parcels, said: “Royal Mail’s annual tracker study of UK SME online retailers shows that there is strong optimism for growth despite increasing competition.

“UK SME online retailers are thinking carefully about how they can develop their businesses during 2015, with one in four looking to expand to online marketplaces, such as eBay and Amazon Marketplace.Simplifying the returns process for customers is also a key area of focus for many online retailers in the year ahead.”