Online sales accounted for 35% of all retail sales in the UK last month, an all-time high. But retailers who assume this percentage will fall back once the Covid-19 lockdown comes to an end may be making a costly mistake.
Analyst Retail Economics estimates that since the beginning of the pandemic, one in two Britons have bought a product online they had previously only bought in a shop. People’s shopping habits are changing for good.
Building a platform
For smaller businesses, this represents a challenge. They may lack the expertise to exploit e-commerce opportunities. And even if they do manage to get online sales and fulfilment operations up and running, they may struggle to attract attention in a crowded marketplace where larger rivals have huge marketing budgets.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The good news is that there’s plenty of help available. The first option is to build your own online shop with the help of an e-commerce platform. These platforms provide templates you can customise for your own needs, along with all the sales functionality you’ll need to actually begin trading online. The idea is that the platform takes care of the technical stuff so that you can concentrate on growing sales.
There is a wide range of options to choose from, but in one recent report, startups.co.uk, an online community for small businesses, named Wix, Squarespace and Shopify as its picks of the platforms. Wix did particularly well in the study, with pricing that begins at £13 a month; the platform also offers support with customer relationship management, marketing and order fulfilment.
If you’re worried that your brand will get lost in the ether if you go it alone, an alternative is to sell through someone else’s platform, where you’re guaranteed plenty of traffic. The obvious option is to set up shop on Amazon. But while plenty of small businesses report good results from the e-commerce giant, there are also a growing number of platforms specialising in hosting independent brands.
The best known of these platforms is Not On The High Street, launched in 2006, which is now home to more than 5,000 small, creative retailers from across the UK. It has seen its traffic and sales soar during the pandemic, investing heavily in marketing to bring new customers on to retailers’ home pages.
More recent arrivals in this area include Mighty Small, which describes itself as a “supermarket of small brands” and enables independent food and drinks producers to reach online shoppers all across the country. Local & Independent is another operator worth considering. It hosts smaller food retailers, often offering artisan products, and enables customers to search by both region and type of food.
These platforms often feel like a better fit for smaller retailers, whose brand values may sit less comfortably with the giants of e-commerce. Indeed, many of the emerging platforms are keen to highlight their community links and to tap into movements such as ethical consumerism.
An accelerating shift
Not On The High Street launched a campaign to work with retailers to increase face-mask production at the height of the pandemic last year. Mighty Small works closely with the charity FoodCycle, which uses surplus food to prepare meals for those struggling financially or with problems such as loneliness.
Different options will appeal to individual businesses, depending on what they sell online and their current levels of experience and expertise. But the bottom line is that the UK’s shift to e-commerce appears to have been accelerated by the pandemic – possibly by as much as ten years according to some retail analysts – and small businesses can’t afford to be left behind.
-
Rachel Reeves confirms ‘workaround’ for pensioners facing tax bill on state pensionAs the full new state pension looks set to breach the tax-free personal allowance within years, the government has said anyone on just a state pension won’t have to pay income tax on the payment until the end of this parliament
-
Zoopla: House prices in southern England drop for first time in 18 monthsHouse buyers could benefit from a fall in prices, triggered by a rumoured ‘property tax’ prior to the Budget, as Zoopla revealed lower prices for the first time in 18 months
-
No peace dividend in Trump's Ukraine planOpinion An end to fighting in Ukraine will hurt defence shares in the short term, but the boom is likely to continue given US isolationism, says Matthew Lynn
-
Will the internet break – and can we protect it?The internet is a delicate global physical and digital network that can easily be paralysed. Why is that, and what can be done to bolster its defences?
-
Why UK stocks are set to boomOpinion Despite Labour, there is scope for UK stocks to make more gains in the years ahead, says Max King
-
Chen Zhi: the kingpin of a global conspiracyChen Zhi appeared to be a business prodigy investing in everything from real estate to airlines. Prosecutors allege he is the head of something more sinister
-
Canada will be a winner in this new era of deglobalisation and populismGreg Eckel, portfolio manager at Canadian General Investments, selects three Canadian stocks
-
Jim O’Neill on nearly 25 years of the BRICSJim O’Neill, who coined the acronym BRICS in 2001, tells MoneyWeek how the group is progressing
-
Build or innovate? How to solve the productivity puzzleOpinion There are two main schools of thought when it comes to solving the productivity puzzle, says David C. Stevenson
-
More clouds gather over renewable energy trusts – is there any hope for the sector?The outlook for renewable energy trusts has gone from bad to worse this year, with the industry being caught in a 'perfect storm'
