Royal Mail’s annual tracker study into the expectations and ambitions of UK SME e-retailers reveals growing business confidence: eight out of ten SME e-retailers are confident they will increase sales in 2016. This is up from seven out of ten e-retailers who expressed confidence last year. 

The confident outlook builds on the sales success of 2015. More than seven out of ten (74 per cent) SME e-retailers increased their sales last year. This is the highest level in the last three years: 58 per cent reported increased sales in 2014 and 49 per cent reported sales growth in 2013. 

On-time delivery drives customer satisfaction

SME e-retailers are also confident about their customer satisfaction levels: 63 per cent believe their customers have become more satisfied in the last year.
The most common factor in driving customer satisfaction is on-time delivery, voted by two thirds (66 per cent) of SME e-retailers. This is more than the number of SME e-retailers who consider the quality of products (62 per cent) and the price of goods (57 per cent) as key drivers of customer satisfaction.

An easy payment process – particularly important for mobile commerce – leapt up in importance this year. SME e-retailers now rate the payment process as the fourth most important factor for customer satisfaction, up from eighth place in 2015.

Good returns deliver sales

The UK’s SME e-retailers also recognise the importance of a good returns process. They believe it will make consumers more likely to be more satisfied with their service (49 per cent), more likely to order in the first place (45 per cent) and more likely to become repeat customers (40 per cent). As a result, one in four SME e-retailers plan to simplify their returns process in 2016.

In independent research, conducted by Hall & Partners in April 2015, online shoppers voted Royal Mail as their most trusted delivery brand.

Smartphone shopping and price promotions new factors in online competition

The overall increase in confidence among SME e-retailers comes despite 53 per cent claiming that competition is more intense this year and 45 per cent stating that levels of competition remain unchanged. 

SME e-retailers have identified new factors for competition this year: the rise of on-the-move smartphone shopping (47 per cent) and price promotions which lead shoppers to seek out the best prices (44 per cent).

However, the main drivers of competition remain the same this year, with SME e-retailers naming consumers’ price sensitivity and an increased number of websites as the main reasons for increased competition (both at 52 per cent).

Online marketplaces key to increasing sales 

To address increased competition and increase sales in 2016, seven in ten online retailers plan to increase the number of channels they sell through: 85 per cent are planning to list on additional online marketplaces. Half of SME online retailers intend to launch their own website.

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Source: Royal Mail Group