CouriersPlease polled 1,021 Australian online shoppers about their spending habits, and found that for most, less than 20 cents in the dollar is being spent with independent or small retailers.
It found that 54 per cent spend less than 20 per cent of their outgoings with such businesses. Sadly, almost a third (31 per cent) confessed to spending less than 10 per cent of their money with independent retailers when making purchases online.
And rather than it being subconscious, most shoppers actively admitted to thinking that online shopping favours big business (69 per cent agreed, versus 31 per cent who disagreed).
So what is thwarting local businesses?
According to the national poll, the biggest disconnect between shoppers and smaller businesses is simple visibility: 31 per cent said they would spend more with these retailers if they simply had more awareness of smaller players in the market.
A further 21 per cent urged independent operators to focus more on having “a unique offering”.
Other things that would entice shoppers to favour smaller businesses over the big end of town include:
- Stocking better quality products than the majors (19 per cent)
- Supporting local or social causes, such as a cafe offering discounts for BYO reusable cups (9 per cent)
- Placing more emphasis on superior customer service (8 per cent)
- A higher premium on delivery and return options (8 per cent)
- Increasing the range and reducing limitations on payment options (4 per cent)
SMEs should play to their strengths
Jessica Ip of Couriers Please said that a major downfall for smaller businesses is their inability to absorb the cost of free shipping and more flexible delivery methods, some that “is an expectation many shoppers have and it’s here to stay”.
Yet rather than try and compete around deliveries, she urged SMEs to entice customers using other means at their disposal.
“For instance, we’re seeing more consumers shop ethically sourced goods or purchase from retailers who are environmentally conscious,” said Ms Ip.
“Retailers that cater to this may have the chance against the larger enterprises, who might struggle to establish such programs quickly.”
Ms Ip also suggested the federal government’s planned Business Growth Fund would be “good news for start-up retailers if it goes ahead”, despite a business growth academic raising question marks about its effectiveness, given the relatively small number of businesses that will be eligible to access it and a disbelief that money alone will support SMEs to achieve their growth potential.