Royal Mail : UK SME e-retailers reveal growing business confidence for 2016

Royal Mail's annual tracker study into the expectations and ambitions of UK SME e-retailers reveals growing business confidence: eight out of ten SME e-retailers are confident that they will increase sales in 2016; this is up from seven out of ten last year

The confident outlook builds on the sales success of 2015: more than seven out of ten (74 per cent) SME e-retailers increased their sales last year - the highest level in three years

The UK's SME e-retailers are also confident about their customer satisfaction levels: 63 per cent believe their customers have become more satisfied in 2015

Two thirds of SME e-retailers rate on-time delivery as a key driver of customer satisfaction, more than the quality of products (62 per cent) and the price of goods (57 per cent)

SME e-retailers also recognise the importance a good returns process plays in customer satisfaction: almost half (49 per cent) believe it makes consumers more likely to be satisfied with the service, more likely to order in the first place (45 per cent) and more likely to become repeat customers (40 per cent). One in four SME e-retailers plan to simplify their returns process in 2016

The overall increase in confidence of SME e-retailers comes despite 53 per cent claiming that competition is more intense this year

New factors have been identified as drivers of competition this year: the rise of on-the-move smartphone shopping (47 per cent) and price promotions which lead shoppers to seek out the best prices (44 per cent)

SME e-retailers again cited consumers' price sensitivity and an increased number of websites (both 52 per cent) as the main reasons for increased competition

To increase sales in 2016, seven in ten online retailers plan to increase the number of channels through which they are selling: 85 per cent plan to list on additional online marketplaces. Half of SME online retailers intend to launch their own website

Online shoppers voted Royal Mail as their most trusted delivery brand of 2015, according to independent research Royal Mail's annual tracker study into the expectations and ambitions of UK SME e-retailers reveals growing business confidence: eight out of ten SME e-retailers are confident that they will increase sales in 2016; this is up from seven out of ten last year

• Royal Mail's annual tracker study into the expectations and ambitions of UK SME e-retailers reveals growing business confidence: eight out of ten SME e-retailers are confident that they will increase sales in 2016
• The confident outlook builds on the sales success of 2015: more than seven out of ten (74 per cent) SME e-retailers increased their sales last year - the highest level in three years
• The UK's SME e-retailers are also confident about their customer satisfaction levels: 63 per cent believe their customers have become more satisfied in 2015
• Two thirds of SME e-retailers rate on-time delivery as a key driver of customer satisfaction, more than the quality of products (62 per cent) and the price of goods (57 per cent)
• SME e-retailers also recognise the importance a good returns process plays in customer satisfaction: almost half (49 per cent) believe it makes consumers more likely to be satisfied with the service, more likely to order in the first place (45 per cent) and more likely to become repeat customers (40 per cent). One in four SME e-retailers plan to simplify their returns process in 2016
• The overall increase in confidence of SME e-retailers comes despite 53 per cent claiming that competition is more intense this year
• New factors have been identified as drivers of competition this year: the rise of on-the-move smartphone shopping (47 per cent) and price promotions which lead shoppers to seek out the best prices (44 per cent)
• SME e-retailers again cited consumers' price sensitivity and an increased number of websites (both 52 per cent) as the main reasons for increased competition
• To increase sales in 2016, seven in ten online retailers plan to increase the number of channels through which they are selling: 85 per cent plan to list on additional online marketplaces. Half of SME online retailers intend to launch their own website
• Online shoppers voted Royal Mail as their most trusted delivery brand of 2015, according to independent research

The most common factor in driving customer satisfaction is on-time delivery, voted by two thirds (66 per cent) of SME e-retailers. This is more than the number of SME e-retailers who consider the quality of products (62 per cent) and the price of goods (57 per cent) as key drivers of customer satisfaction.

An easy payment process - particularly important for mobile commerce - leapt up in importance this year. SME e-retailers now rate the payment process as the fourth most important factor for customer satisfaction, up from eighth place in 2015.

Good returns deliver customer satisfaction and drives sales

The UK's SME e-retailers also recognise the importance of a good returns process. They believe it will make consumers more likely to be more satisfied with their service (49 per cent), more likely to order in the first place (45 per cent) and more likely to become repeat customers (40 per cent). As a result, one in four SME e-retailers plan to simplify their returns process in 2016.

In independent research, conducted by Hall & Partners in April 2015, online shoppers voted Royal Mail as their most trusted delivery brand.

Smartphone shopping and price promotions new factors in online competition

The overall increase in confidence among SME e-retailers comes despite 53 per cent claiming that competition is more intense this year and 45 per cent stating that levels of competition remain unchanged.

SME e-retailers have identified new factors for competition this year: the rise of on-the-move smartphone shopping (47 per cent) and price promotions which lead shoppers to seek out the best prices (44 per cent).

However, the main drivers of competition remain the same this year, with SME e-retailers naming consumers' price sensitivity and an increased number of websites as the main reasons for increased competition (both at 52 per cent).

Online marketplaces seen as key to increasing sales

To address increased competition and increase sales in 2016, seven in ten online retailers plan to increase the number of channels they sell through: 85 per cent are planning to list on additional online marketplaces. Half of SME online retailers intend to launch their own website.

For those intending to sell items in a physical store, SME e-retailers prefer to have their products stocked in an established retail outlet (41 per cent and increased from 2015) rather than opening their own store (26 per cent and declining from 2015).

Nick Landon, Managing Director of Royal Mail Parcels, said: 'Royal Mail's annual tracker study of SME online retailers shows that confidence is continuing to grow this year and that technology is playing an ever more important role in the retail world.

Technology is influencing how people shop, where they shop and what they define as an excellent shopping experience. Our research shows that SME online retailers are plugged in to the needs of the shopper and they are taking actions to enable them to meet the demands of the discerning online consumer.'

For more information contact:

Claire Burgess

07753 461658

Or:

Royal Mail press office

Notes to editors

Royal Mail's annual survey of 300 SME online retailers is conducted in December by independent research companies Illuminas (2015) /Trinity McQueen (2014).

About Royal Mail plc

Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and delivery services in the UK and the UK's designated universal postal service provider. UK Parcels, International and Letters ('UKPIL') comprises the company's UK and international parcels and letters delivery businesses operating under the 'Royal Mail' and 'Parcelforce Worldwide' brands. Through the Royal Mail Core Network, the company delivers a one-price-goes-anywhere service on a range of parcels and letters products. Royal Mail has the capability to deliver to more than 29 million addresses in the UK, six days a week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which operates one of the largest ground-based, deferred parcel delivery networks in Europe.

Royal Mail's annual tracker study into the expectations and ambitions of UK SME e-retailers reveals growing business confidence: eight out of ten SME e-retailers are confident they will increase sales in 2016. This is up from seven out of ten e-retailers who expressed confidence last year.

The confident outlook builds on the sales success of 2015. More than seven out of ten (74 per cent) SME e-retailers increased their sales last year. This is the highest level in the last three years: 58 per cent reported increased sales in 2014 and 49 per cent reported sales growth in 2013.

On-time delivery drives customer satisfaction

SME e-retailers are also confident about their customer satisfaction levels: 63 per cent believe their customers have become more satisfied in the last year.

The most common factor in driving customer satisfaction is on-time delivery, voted by two thirds (66 per cent) of SME e-retailers. This is more than the number of SME e-retailers who consider the quality of products (62 per cent) and the price of goods (57 per cent) as key drivers of customer satisfaction.

An easy payment process - particularly important for mobile commerce - leapt up in importance this year. SME e-retailers now rate the payment process as the fourth most important factor for customer satisfaction, up from eighth place in 2015.

Good returns deliver sales

The UK's SME e-retailers also recognise the importance of a good returns process. They believe it will make consumers more likely to be more satisfied with their service (49 per cent), more likely to order in the first place (45 per cent) and more likely to become repeat customers (40 per cent). As a result, one in four SME e-retailers plan to simplify their returns process in 2016.

In independent research, conducted by Hall & Partners in April 2015, online shoppers voted Royal Mail as their most trusted delivery brand.

Smartphone shopping and price promotions new factors in online competition

The overall increase in confidence among SME e-retailers comes despite 53 per cent claiming that competition is more intense this year and 45 per cent stating that levels of competition remain unchanged.

SME e-retailers have identified new factors for competition this year: the rise of on-the-move smartphone shopping (47 per cent) and price promotions which lead shoppers to seek out the best prices (44 per cent).

However, the main drivers of competition remain the same this year, with SME e-retailers naming consumers' price sensitivity and an increased number of websites as the main reasons for increased competition (both at 52 per cent).

Online marketplaces key to increasing sales

To address increased competition and increase sales in 2016, seven in ten online retailers plan to increase the number of channels they sell through: 85 per cent are planning to list on additional online marketplaces. Half of SME online retailers intend to launch their own website.

For those intending to sell items in a physical store, SME e-retailers prefer to have their products stocked in an established retail outlet (41 per cent and increased from 2015) rather than opening their own store (26 per cent and declining from 2015).

Nick Landon, Managing Director of Royal Mail Parcels, said: 'Royal Mail's annual tracker study of SME online retailers shows that confidence is continuing to grow this year and that technology is playing an ever more important role in the retail world.

Technology is influencing how people shop, where they shop and what they define as an excellent shopping experience. Our research shows that SME online retailers are plugged in to the needs of the shopper and they are taking actions to enable them to meet the demands of the discerning online consumer.'

For more information contact:

07753 461658

Or:

Royal Mail press office

Notes to editors

Royal Mail's annual survey of 300 SME online retailers is conducted in December by independent research companies Illuminas (2015) /Trinity McQueen (2014).

About Royal Mail plc

Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and delivery services in the UK and the UK's designated universal postal service provider. UK Parcels, International and Letters ('UKPIL') comprises the company's UK and international parcels and letters delivery businesses operating under the 'Royal Mail' and 'Parcelforce Worldwide' brands. Through the Royal Mail Core Network, the company delivers a one-price-goes-anywhere service on a range of parcels and letters products. Royal Mail has the capability to deliver to more than 29 million addresses in the UK, six days a week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which operates one of the largest ground-based, deferred parcel delivery networks in Europe.