SME e-tailers target greater store presence

One in six UK SME e-retailers are planning to expand into physical stores during this year as online competition for sales grows, the study found. 16 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 per cent of UK SME e-retailers are planning to expand by using online marketplaces to sell their goods.

In total, 40 per cent 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 per cent) 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 per cent of UK SME online retailers who were confident of growing sales a year ago.

The study found 54 per cent of more than 400 UK SME online retailers surveyed believe competition for online shoppers is more intense than last year. Six in ten (59 per cent) said this was because there are more websites to compete with. 57 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.

Royal Mail Parcels MD Nick Landon said: "UK SME online retailers are 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.”