Indie retailers and the rise of online sales

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A survey amongst independent retailers confirms once again what we’ve known for some time, that the rise of online sales is still something indie retailers consider a threat rather than an opportunity to embrace.

The Autumn Fair Retail Sentiment Survey 2013 revealed that the proportion of independent retailers fearing the threat of rising sales from e-commerce rivals is up from 22% to 37% over the past 12 months.

Their mindset is based on an apparent increase in ‘show-rooming’, the practice of customers photographing and researching products on their smartphones in store to buy them online at a lower price, with over half of retailers at 55% have seen an increase in ‘show-rooming’ over the past year.

A similar percentage of those surveyed (53%) believe e-commerce merchants should have their sales taxed, a prospect recently ruled out by the Treasury, much the same way as bricks and mortar reatilers have to pay business rates.

The survey also indicated that independent retailers are not getting what they expect through the online sales channel, as the number earning revenue from online sources has fallen over the past year. Nearly two thirds (65%)of retailers earned less than £1 in every £10 out of online sales over the past 12 months, up from 44% in August 2012. This is in marked contrast to their hopes a year ago, when they hoped e-commerce would make up over half of their sales by 2015.

Although nearly half of retailers surveyed run discount schemes or loyalty programmes to attract more custom, an almost equal amount at 42% do not run any such schemes or competitions.

Retailers believe a cut in VAT is the best solution to improving the overall health of the High Street (57%), followed by Government investment into the retail sector (50%) and the freezing of business rates and lower car parking costs (45% each).

Nick Davidson, Director of Autumn Fair 2013, said: “It is clear that online retailers are seen as a threat to traditional, bricks and mortar stores. But if you can’t beat them, join them: independent retailers need to think about how they can spruce up their websites to ride the crest of the e-commerce wave.

“They should also be thinking about how they can use their assets to their advantage. Customers often want to buy high-quality goods in person, which means proactively promoting high quality stock through attractive window displays, running customer competitions and raising the profile of your stores through getting involved in the community. Independent retailers need to put their best foot forward if they are to survive in this tough economic environment.”

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