Independent retailers evidence growing fear of online rivals

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Independent retailers are demonstrating a growing fear of their online rivals, and would like to see the ecommerce sector taxed in order to level the playing field, a new survey suggests.

Researchers for the Autumn Fair Retail Sentiment Survey 2013 quizzed an average of 700 independent retailers in surveys carried out both this August and last August. They found that 37% of respondents now fear the threat of online rivals winning rising ecommerce sales. That’s up from 22% at the same time last year.

Behind that fear lie perceptions of increased ‘showrooming,’ where customers compare products on mobile devices in-store. Some 55% of those taking part in the study said showrooming had increased over the past year.

Most (53%) now believe the Treasury should proceed with the ecommerce sales tax, something the Government recently ruled out.

At the same time, 65% said less than £1 in every £10 of their income came from online sources over the past 12 months. That’s up from 44% in August 2012. Last year many hoped ecommerce would make up more than half of their sales by 2015.

“It is clear,” said Nick Davidson, director of retail buying show Autumn Fair 2013, “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.”

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

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).

The study comes ahead of a much-anticipated review of the high street, set to be published tomorrow by veteran retailer Bill Grimsey and expected to bring alternative ideas to the Portas report.

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