SME e-tailers predict boom times

Royal Mail boss Moira Greene’s prediction that online shoppers will give the postal operator a shot in the arm appears to be coming true after a survey of SME e-tailers showed two-thirds reckon sales will rise in 2013.
The study, carried out by Royal Mail Parcels, revealed over half of SME e-tailers saw an increase in sales in 2012, while two thirds (64%) are confident sales will rise further in 2013.
The results would appear to confirm Royal Mail’s prediction that its parcels division is likely to see major growth from online shopping.
Royal Mail has already revealed plans to create 1,000 new jobs as part of a £75m investment over the next four years. Last year, parcels accounted for £4.2bn of Royal Mail revenue – nearly half of the company’s turnover – growing by 10% year-on-year, with domestic parcels bringing in £2.6bn.
Some 70% of those surveyed believe competition has soared during the past two years, driven by online and mobile shopping. The number of people who use smartphones and tablets to buy items continues to increase, which means they are shopping around less, according to a third of those surveyed.
This growth is leading over a third of SME e-retailers to prioritise mobile development, with 35% planning mobile apps for 2013, while 10% are poised to launch apps in the coming months.
Over half (57%) of SME e-tailers said attracting new customers is among their biggest challenges to meeting their predicted sales forecasts, according to the poll. Other challenges include competitive pricing and building customer loyalty to drive repeat purchases.
Online sales were booming in the run-up to and post-Christmas, with 107 million visits to websites on Christmas day – up 86% on Christmas in 2011, according to Experian Hitwise.
Royal Mail Parcels managing director Nick Landon said: “Our study shows online retailers are responding to the needs of shoppers to grow sales in an increasingly competitive marketplace.”

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