Online retail sales predicted to grow by 56% by 2014
I read an interesting article on Saturday in the Daily Telegraph ?Web sales growth set to decrease after 2014 which predicts strong growth (56%) in online sales until 2014. At this stage Verdict, a retail research company, predict that the channel will mature and the increase in online sales will slowly level off to around 12% growth (still out performing the off line retail market). For the last decade small businesses and especially retail businesses have been able to complete with businesses significantly larger within their sector. For many of these small businesses their success was down to taking a punt ten or twelve years ago and being some of the first online businesses within their niche.
There are obviously some businesses that were and still are web based and got in right from the start (amazon.com being the first that springs to mind, founded in 1994) but for many small businesses this was a way of increasing their market beyond the traditional retail outlets on the high street.
We have worked with a number of online businesses that enjoyed a period of sustained growth over the last decade and hit well above their weight, often competing with their larger counterparts (including the supermarkets). However we are seeing some of these businesses getting squeezed out by increased competition as each sectors online presence becomes more mature. There are some obvious sectors that have matured faster than others, tourism and groceries being two of these with some big players dominating. It is worth noting that some of these larger players were in fact fledgling internet businesses ten years ago (lastminute.com founded in 1998).
Opportunities still exist and the growth of online sales is still increasing. However businesses have to get customer loyalty to sustain their market share and it's definitely getting tougher and more competitive! We have worked with a villa rental business in Greece over the last six years and they are seeing increased competition, some of which is coming from larger tourism businesses that have massive marketing budgets and buying their way to the top of the search engines. For smaller businesses, this is becoming an increasing problem, competing with marketing budgets ten or even a hundred times their own size. What they need to do is focus on brand / customer loyalty.
Online businesses have to stay ahead of the game, grabbing new opportunities where they can, whether it's using social media to increase exposure or investing in modern e-commerce platforms that can encourage add-on sales or just make paying online easier. Too often I hear businesses complain about the increased competition, but they need to understand they have to evolve with their environment and the internet is constantly evolving. Your potential customers expectations are constantly changing as well, so the goal posts are constantly moving.
The good news is that if you manage to carve a niche out for yourself and build your customer loyalty, the chances are you'll do well. I joined amazon.co.uk years ago and never look anywhere else, in fact I often pop down to Waterstones and then buy the books online as their mobile platform is brilliant and works really well (even on a Blackberry)!
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