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.
Subscribe to 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.
-
8 of the best houses for sale with home cinemasHouses for sale with home cinemas – from a modern oast-house style property in Kent to a house in Buckinghamshire with Dolby sound and bespoke seating
-
Rachel Reeves faces £23 billion capital gains tax “black hole” – will she be forced to look elsewhere?The fiscal watchdog has downgraded its forecast for capital gains tax revenues, leaving chancellor Rachel Reeves with £23 billion less than previously expected
-
Protests erupt in Turkey after the arrest of president Erdogan's rivalTurkey's president has jailed his main political opponent, Ekrem Imamoglu
-
What is the Mar-a-Lago Accord and why is it getting attention from Wall Street?On Wall Street, there is talk that Trump's tariffs aim to make the world’s leaders come crawling to Mar-a-Lago, his Florida residence
-
Spring Statement: Rachel Reeves 'must turn good intentions into effective measures'Opinion Chancellor Rachel Reeves understands the economy’s structural problems but is unlikely to solve them, says Max King
-
England's department stores return – but do they have a future?Opinion The great traditional retail shops of Middle England have bounced back for now. Don’t get too carried away though, says Matthew Lynn
-
Can investors stay optimistic about Russian stocks?Investors look to profit from Russia as Trump pushes for peace in Ukraine. But is it worth the risk?
-
Labour's 'Project Chainsaw' begins by abolishing NHS England – will it backfire?Keir Starmer is taking the fight to the blockers, the NIMBYs, public sector workers and the unions says Emily Hohler. What happens if Labour fails to deliver?
-
The benefits of a stock bubbleOpinion We tend to think of stock bubbles as bad things but, as the dotcom craze shows, good things can come from them, says Matthew Lynn
-
Friedrich Merz proposes 'radical' spending package for GermanyGermany's chancellor designate Friedrich Merz wants to scrap restraints on borrowing and allow for much higher defence spending
