Ecommerce in 2007 Is More Profitable & Less Expensive

New research on the state of the UK SME retail market indicates that trading online has become more profitable and less costly to implement, but that few retailers are grasping the opportunity.

According to Actinic's latest annual survey, 90% of company web sites are profitable; and on average, companies that implement ecommerce find it costs 40% less than they anticipated. But only one in ten retailers has a transactional web site. Even amongst those who already accept telephone orders for home delivery, only one in four have an ecommerce facility.

The survey was undertaken by pfa Research on a sample of around 600 randomly-selected small and medium-sized retailers, of whom 146 had web sites. It found that the number of retailers with ecommerce sites had risen by over 30%, from 8% of companies in 2005 to 11% in 2006 - confirming trends reported by bodies such as the IMRG.

Dave Lomax of men’s fashion retailer Bagga Wear feels that ecommerce has benefited his business by, “generating a new income stream and enhancing the turnover of our high street shop. And overall life is much easier now with fewer staff and less overheads.”

ECommerce Survey Highlights

• The proportion of retail companies using ecommerce rose from 8% in 2005 to 11% in 2006.
• But 75% of retailers who accept mail and telephone order still do not have an ecommerce facility.
• 90% of companies with an ecommerce facility said their web site was profitable - up from 70% in 2005.
• On average, companies paid 40% less than expected for their ecommerce solution. The average anticipated cost was £2416, whereas the average price paid was only £1585.
• 45% of companies built their own ecommerce sites. Of the remainder, 85% used a web designer. Very few used other third parties such as consultants or IT resellers.
• 10% of retailers think that online shoppers are lazy. The primary advantage of internet shopping is perceived to be not price, but convenience - named by 75% of retailers as the main reason why customers shop online.