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Online sales set to increase again this year for two-thirds of UK’s SME retailers: study

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More than half of the UK’s small and medium-sized online retailers benefitted from rising sales in 2012, and two-thirds believe they will see a further boost this year – despite increasingly fierce competition, according to research.

A Royal Mail study, carried out by research company Brass, found that just over half of the 441 SME online retailers it questioned saw sales rise in 2012, while 64% expect them to grow in 2013. However 70% believe that competition is more intense than it was two years ago

One in three respondents (31%) said the growth of smartphone and tablets in purchasing meant shoppers were using retailers they already knew. Meanwhile 56% saw increased competition boosted by a rise in the number of retail websites. Half said customers were more sensitive to prices and 41% said widespread discounting meant shoppers were usually looking for the best prices.

When asked about the challenges they faced in the coming year, 57% said they must attract new customers in order to increase their sales. Just under half (49%) singled out the drive to price goods competitively, while 36% cited the need to build customer loyalty in order to drive repeat purchases.

Priorities for this group of retailers in 2013 included the need to improve their product range, cited by 48%, more competitive pricing (46%), improving product quality (29%), improving delivery and returns processes (25%). Some 35% said they would develop mobile apps in 2013, while 10% said they already had.

“Our study shows that online retailers are responding to the needs of shoppers to grow sales in an increasingly competitive marketplace,” said Nick Landon, managing director of Royal Mail Parcels.

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