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SME online retailers to combine Clicks with Bricks in 2014

By FashionUnited

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Fashion

One in six UK small to medium sized online retailers are planning to expand into physical stores in 2014 as online competition for sales grows, according to research by Royal Mail. The annual study of more than 400 UK SME online retailers found that 16 percent expected to launch into

physical store or seek space in an existing store to increase its sales in 2014. In addition, 15 percent of UK SME e-retailers revealed that they were planning to expand by using online marketplaces to sell their goods this year.

In total,

40 percent of the UK’s SME online retailers asked said they were planning to start trading from new channels in the coming 12 months in a bid to increase sales in the growing competitive market. While more than half, 56 percent of respondents said they were confident of sales growth in 2014, however this was down 8 percent from a year ago, which the Royal Mail states is down to a number of new market entrants leading to an increase in online competition.

The study also found that 54 percent said they believed competition for online shoppers was becoming more intense now than this time last year, with six in ten blaming this to more websites to compete with, while 57 percent said customer price sensitivity was the main reason behind increased competition.

Royal Mail study shows online competition is growing

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.”

Image: Royal Mail
Royal Mail