Most SME online retailers in the UK are optimistic about increasing their sales this year, including to international customers, despite slower overall e-commerce growth in 2019, according to a new study commissioned by Royal Mail.
Online retail sales in the UK grew by just 6.7% last year, which was well behind the 2018 growth rate of 11.8% and recent years, e-commerce association IMRG said last week. It pointed to low consumer confidence in a year marked by the country’s delayed EU exit.
But SMEs selling online are looking ahead to 2020 with optimism and 70% are confident that their sales will increase in 2020, the Royal Mail survey showed. Key reasons include plans to increase advertising/marketing spend (48%) and to improve the customer experience (36%).
Looking further ahead, 79% of these retailers rate the prospects for business as good or very good over the next five years, the postal group noted. In 2019, a majority (62%) of retailers experienced an uplift in sales compared to the previous year, the survey found.
The biggest perceived challenges for UK SME online retailers this year are online competition, economic uncertainty in the UK and pricing goods competitively.
Moreover, UK SME online retailers are increasingly looking overseas to increase their sales. The study found two-thirds (66%) of UK SME online retailers currently sell overseas. These retailers sell the most to Europe, USA, Asia and the Middle East.
In the coming year, 62% of online retailers intend to increase their international sales revenue. Key plans for increasing international sales revenue include: simplifying the sales/ordering/delivery and payment process (33%), selling more to the markets they already sell to (28%) and targeting new markets and countries (21%).
Shane O’ Riordain, Managing Director of Marketing, Regulation and Corporate Affairs at Royal Mail said: “As we enter a new decade, the level of business confidence is promising for 2020 and the years beyond. Royal Mail already supports a wide range of retail businesses, providing them with the tools they need to succeed in the UK and across the globe. We look forward to working with even more of these great businesses this year.”
