A last-minute Christmas rush and England staying in the World Cup to the quarter finals have delivered an unexpected mini-boost to retail this month. Small Business Saturday, for example, generated 30% more revenue than it did last year, driven by consumers looking for bargains. There are also opportunities overseas that many smaller online sellers and brands are looking at, not least in India.
However, many smaller retailers are anticipating being in survival mode come January. Research among UK online retailers in November found that 50% of them are worried that their businesses won’t survive the next 12 months, while 41% are afraid of going bankrupt.
Already, they say, they are seeing abandoned baskets and that those that do spend are spending less.
A separate study across Europe and Africa, focussed on online food sellers, found similar numbers worried about going under in 2023. The biggest challenge they face is attracting new customers and then holding on to them.
However, this study also finds sellers looking to turning this challenging time into an opportunity. According to its data, 82% of UK online retailers surveyed are actually going to target significant growth in 2023. 74% in Spain say the same. The global average is 46%.
The thing is many smaller businesses are seeing the 2023 crunch as the make-or-break moment for the true modernisation of their business. Now, they figure, is the time to not just pay lip service to digital, but to truly try and exploit what digital tech has to offer.
This takes them beyond the realms of having a decent website and into the world of working with tech partners to fully optimise everything from marketing to payments to delivery to retargeting.
Only through following the kind of digital journey exemplified by successful large online and omnichannel retailers can they hope to survive.
And they are going to find tech companies falling over themselves to help. Tough times for retailers translate into tough times for all the vendors out there that make all these things happen. While the big bucks have been made in offering X as a Service to large retailers, the depths of that well is going to be harder to plump in a recession. Vendors then are going to have to target that very long tail of smaller online retailers who are now ripe to reap the rewards of a more tech-heavy approach to online selling.
This move could well be the boon that vendors need and it will certainly improve the overall experience for customers. It also may have another hidden benefit: has smaller retailers become more competitive and start to take business away from big brands, those big brands will have to invest in the next next generation of technology, driving ecommerce forward again in a revolutionary leap. Is it too early to wish you all a Happy New Year?
