It’s no secret that online trade has become more prominent in recent years. In an effort to provide consumers with more choice and convenience for what they can buy, when they can get it and where they can get it delivered to, many businesses have moved into ecommerce. At a time when high street sales are sluggish, online sales are proving to be the saviour of the retail sector.
Ecommerce has become hugely important to the UK economy as a whole, especially if the set of figures for the past month released by the Office for National Statistics (ONS) are anything to go by. Overall retail sales for March dropped 0.7%, largely as a result of poor weather which will have persuaded many shoppers to stay at home.
Despite that, the ONS revealed that online retail sales year-on-year grew overall by 20.5%, with non-store retailers the biggest winner with 29% growth. Food sales online rose 15.8%, while non-food products grew 11.5% compared to the figures from March 2012. However, household goods stores fared badly, with sales down 10.2%, something Joshua Raymond from City Index alluded to. He said:
“It has been a very challenging time for firms selling non-food items at the top end of the price scale, such as electronics. With no major summer sporting event taking place this year either, consumer spending in this space has been handicapped by anaemic wage growth and high inflation.
“With the Bank of England’s newly announced mandate now making it easier for the central bank to look more towards pro-growth measures likely to see inflation rise even further, and there being no major sporting event this summer (unlike previous years), sales of non-food items will rely on faster UK growth and good weather in the UK.
“To this end, it is firms that have a solid footing in online retail and a low cost base that will succeed”, he concluded.
Making the most of the web
Businesses of all sizes would be foolish to give ecommerce a wide berth. It can help to open up another income stream, which in the current climate could prove to be extremely valuable. SMEs in particular should make the most of online retail, especially if they own a shop which is struggling on the high street.
Setting up shop online brings numerous advantages to small firms. It reduces reliance on selling services and products face to face on the premises; if some businesses decide to move from traditional retail to online sales, they could significantly reduce their running costs by not having to pay for office space, although such a move could be risky.
Online retail helps to open businesses up to wider customer bases – they could sell their wares to just about anyone in the world with the help of shipping.
It also helps to open companies up to a wider area, while marketing is a little easier, especially if there are any special offers to mention on the company website that might interest savvy consumers.
This helpful business information was sponsored by City Index.