UK online SMEs ‘confident’ in 2018 sales growth

The majority of retailers experienced an increase in sales in 2017 and predict continued prosperity

UK SME online retailers have expressed confidence in the year ahead with 74% anticipating sales will increase in 2018, according to a study commissioned by Royal Mail.Some 70% of retailers asked said they had experienced an uplift in sales in 2017 compared to the previous year.

The health and beauty sector saw the highest increase in sales with 78%, followed by electronics (73%).

Increasing their social media presence (43%), running more promotional offers (39%) and introducing new products/services (29%) are the main ways retailers are planning to achieve growth in 2018.

Of those asked, 27% of retailers said their main concerns were the ability to make a profit, while 26% were worried about how they would increase sales and 23% said they wanted to reduce costs (23%).

Some 69% of retailers revealed that they expected costs to be higher in 2018 with purchasing (34%), logistics/delivery (32%) and advertising (27%) being the main worries.

The study also found 68% of UK SME online retailers currently sell overseas; 80% of these retailers sell to Europe, 35% sell to the USA, 31% to Canada and 17% to Asia.

In the fashion sector, 88% sell to Europe, 53% to the USA, 28% to Canada, and 25% to Asia. In the electronics sector, 78% sell internationally, followed by 72% of health and beauty and 67% of fashion retailers.

The most popular European destinations to sell to are France, Germany and Spain.

In 2018, 64% of UK SME online retailers intend to increase their international sales revenue. In the electronics sector, the percentage is higher at 78%. In health and beauty it is 69% and in fashion 68%.

Key ways of increasing international sales revenue will be by simplifying the sales/ordering/delivery and payment process (45%), selling more to the markets they already sell to (28%) and targeting new markets and countries (20%).

UK SME online retailers are planning to target Europe (50%), USA (34%) and Canada (28%) in 2018 due to demand, good e-commerce structure and the ease of shipping and delivery. Europe holds the greatest opportunity, according to UK SME online retailers.

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