One in six UK SME e-retailers are planning to expand into physical stores during 2014 as online competition for sales grows
A Royal Mail study has revealed that 16% of all UK small-to-midsized enterprise (SME) online retailers expect to either open a physical store or seek space in one to increase sales in 2014.
According to the Royal Mail’s annual tracker study into the expectations and challenges facing UK SME online retailers, 15% of UK SME e-retailers were also planning to expand by using online marketplaces to sell their goods.
In total, 40% of UK SME online retailers polled were planning to start trading from new channels in the coming 12 months to increase sales and more than half (56%) were confident their sales would increase in 2014. However, with more and more new market entrants, this was down from the 64% of UK SME online retailers who were confident of growing sales a year ago.
Increased competition online
The study found 54% of more than 400 UK SME online retailers surveyed believed competition for online shoppers was more intense than last year. Six in ten (59%) said this was because there were more websites to compete with. Over half (57%) said customer price sensitivity was a reason for increased competition.
And 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, commented 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,” he said. “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.”