2012 looked set to be an optimistic one for SME online retailers despite economic uncertainty, with a survey conducted by Actinic reporting a 1.5% increase in online retail sales for SMEs in the fourth quarter of 2011, when compared to Q4 of 2010. Further encouragement for e-tailers has come in the form of the latest figures from the IMRG Capgemini e-Retail Sales Index, reporting that British shoppers have spent £34.9 billion online in the first half of 2012, compared to £31 billion spent in the first six months of 2011.
However, despite the widely reported success for online retailers, many SMEs are still not embracing the opportunities that e-commerce has to offer. The European Commission’s Digital Agenda revealed that, over the last year, only 14% of UK SMEs sold their products online – a staggering figure considering that 71% of British people shop online.
Affordable investment in online channels can enable SMEs to compete
While e-commerce giants such as eBay and Amazon can afford to invest heavily in their online channels, some household brands are still failing to retain customers as a result of simple processes such as deliveries and website efficiencies, exemplified in Global Freight Solutions’ (GFS) report. Online retail success, therefore, is not the reserve of established brands and SME retailers can compete if they adopt online channels and ensure that their websites are geared toward the customer’s needs.
Intelligent, modest investment in technologies can still enable SMEs to offer an e-tail site with greater efficiencies and exemplary levels of service. GS1 UK, the UK supply chain standards organisation, has reported an increase in its membership and GS1 standardised system of barcodes. GS1 identify the reason behind the increase as SME retailers looking to streamline their online supply chain using the standardised system of barcodes, which can be used to identify products more easily.
Creating efficiencies within an e-tail site is also crucial to success, as lengthy and complicated processes can result in customers becoming frustrated and abandoning their baskets. Technologies such as postcode or zipcode lookup in the check-out process to speed up data input; tokenisation to store regular customer’s data securely; and integrating the website with back end processes, can create a sleek website that is thought to only be accessible to those with enterprise-scale budgets.
Using social media to engage customers
Social media can also play a significant role in online success. Play.com recently revealed that Facebook accounted for over £2m of direct sales last year. Play.com calculated that those who had ‘liked’ the brand on Facebook would spend 24% more than those customers who had not engaged with the social media site. US fashion brand, Free People, also conducted a social media campaign to engage with its customers and increase conversions by inviting them to post Instagram images of themselves wearing its clothing on the Free People website. Evidently social media is not a tool to be underestimated and is a valuable means by which SMEs can engage with customers and deliver a personalised service.
And don’t forget mobile
Sales via mobile devices also continue to rise dramatically, with a 356% year-on-year sales increase for the first half of 2012.This therefore begs the question of whether SMEs are also neglecting the mobile channel at their peril? As recent research shows that 76% of SME retailers haven’t adopted m-commerce.
It is clear that online, and arguably mobile, is a crucial channel for SMEs to adopt and invest in to generate new business and maximise potential profits. Modest investments are sufficient in making websites function smoothly – a key component for customer retention.
Do you have any other top tips for easy and affordable ways to engage customers and improve online sales? We’d love to hear them – share your thoughts below!