Crisis? What crisis? Marketers bullish on revenue rise

The prophets of doom may be circling, with the triple whammy of soaring prices, rising interest rates and rocketing inflation, but it seems marketers remain bullish, with more than two-thirds feeling positive about their revenue growth over the next year, especially in online channels.

So says a new study by ChannelAdvisor, which quizzed over 300 chief marketing officers working at UK brands to gauge the state of their nation.

While marketers do recognise that the current economic climate will be challenging, 23% cited the cost of living crisis as their biggest concern, 67% are positive about their revenue growth over the next 12 months.

Meanwhile, just over half (51%) said they were optimistic about their sales growth over the next five years and over a third (36%) expect their brand will increase international sales; just 4% expect their brand will significantly decrease sales outside of the UK.

The report claims this optimism is being driven by the online shopping market, with the UK being the fourth largest ecommerce sector in Europe, increasing by 12% to a total value of £148bn in the past 12 months.

Although the growth of online shopping has slowed since its pandemic peak, UK brands believe they maintain growth over the coming years. This optimism is also influenced by the growth seen across Europe and international markets like the US, the global value of ecommerce has grown to over $13trillion, sparking a genuine sense of optimism among leading UK marketers.

ChannelAdvisor managing director EMEA Vladi Shlesman said: “As pressure on household budgets continues to intensify consumers may look to tighten their wallets and refocus on essential spending. At the same time brands are trying to navigate through these tricky times and are under pressure to remain competitive among some of the most difficult trading conditions in recent years. Despite this there does remain a real sense of optimism among UK CMOs as growth in the ecommerce market continues to beat expectations.

Shlesman continued: “Loyalty will play a key role in the short term as customers are more willing to shop around to grab the best deals for products. Brands and retailers need to consider a number of approaches in order to ensure that they are the most attractive proposition among the competition, delivering consistently on value and quality both domestically and internationally.”

The ChannelAdvisor study coincides with the publication of new research from digital payment firm Shieldpay and the Centre for Economics & Business Research (CEBR), which reveals almost 900,000 UK businesses are currently selling on online marketplaces, generating an estimated £282bn worth of sales every year – worth 6% of all UK business turnover.

Online marketplaces that enable independent sellers and businesses to reach a wider array of consumers have dramatically increased in popularity over the past decade, and now represent a significant portion of the UK ecommerce market.

The research found that companies selling on marketplaces reported stronger business performance, with annual revenue growth in 2021 amounting to 9.4% for businesses selling on marketplaces, compared to 7.4% for those who have not used them.

However, despite the significant turnover from online marketplace sales, these figures still represent only just over a fifth of the UK’s annual business turnover. As such, there is still significant scope for growth in this area, as more and more businesses begin to capitalise on the value of a ready-made, secure environment for ecommerce.

When asked about the drawbacks of using marketplaces, more than a quarter (27%) of businesses noted that they saw none whatsoever, and that nothing would prevent them from using marketplaces, again suggesting few barriers to growth.

Surprisingly, SMEs are less likely to use marketplaces than larger businesses. According to the ONS, just 3% of microbusinesses cited selling through marketplaces in 2019. This is despite the benefits that additional services that marketplaces can offer small businesses, including logistics support and data analytics from large marketplaces such as Amazon or eBay.

Shieldpay revenue director Claire Van der Zant said: “A marketplace is more than just a business in and of itself, it is a distribution channel to empower other businesses to reach new markets and a transformational tool to unlock new value for the end consumer through greater choice and more competitive pricing.

“Our research not only shows that marketplaces make a notable contribution to the UK economy, but that businesses are not yet fully capitalising on the significant benefits they can bring.”

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