UK SME e-retailers reveal growing business confidence for 2016

Eight out of ten small to medium-sized online retailers have stated in new research that they are “confident” that they will increase sales in 2016.

The Royal Mail’s annual tracker study, which looks into the expectations and ambitions of SME e-tailers, reveals a growing business confidence from last year when seven out of ten online retailers expressed confidence.

The research states that this confident outlook builds on the sales success of 2015, where 74 percent of SME online retailers increased their sales last year, the highest level in three years. This compares to 58 percent reporting increased sales in 2014 and 49 percent in 2013.

The SME e-retailers surveyed also felt more confident about their customer satisfaction levels with 63 percent believing their customers have become more satisfied in the last year. The report found that the most common factor in driving customer satisfaction was on-time delivery, which was cited by 66 percent of respondents. While 62 percent stated quality of products and 57 percent indicated that the price of goods was responsible for higher customer satisfaction. Other factors included an easy payment process, which leapt up the ranking of priorities to fourth from eight place in 2015.

SME e-retailers also recognised the importance of the returns process, 49 percent of businesses polled believe that a good returns process will leave customers more satisfied with their service, and 45 percent believe that it will also mean that shoppers are more likely to place an order, while 40 percent believes it will ensure repeat customers. As a result, one in four SME e-retailers plan to simplify their returns process in 2016.

The overall increase in confidence among SME e-retailers comes despite 53 percent claiming that competition is more intense this year, while 45 percent state that levels of competition remain unchanged.

Small to medium sized online retailers “confident” they will increase sales in 2016

The report also identified new factors for driving competition this year, with 47 percent stating the rise of on-the-move smartphone shopping, while 44 percent highlighted price promotions that lead shoppers to seek out the best prices. However, 52 percent named consumers’ price sensitivity and an increased number of websites as the main reasons for increased competition, the same issues stated in last year’s survey.

To address increased competition and help achieve increase sales in 2016, seven in ten online retailers plan to increase the number of channels they sell through, with 85 percent planning to list on additional online marketplaces, while half of SME online retailers intend to launch their own website.

Nick Landon, managing director of Royal Mail Parcels, said: “Royal Mail’s annual tracker study of SME online retailers shows that confidence is continuing to grow this year and that technology is playing an ever more important role in the retail world.

“Technology is influencing how people shop, where they shop and what they define as an excellent shopping experience. Our research shows that SME online retailers are plugged into the needs of the shopper and they are taking actions to enable them to meet the demands of the discerning online consumer.”

Image: Huffington Post