Physical stores remain important for SMEs says Royal Mail

Almost 60% of SMEs sell on marketplaces and half of SMEs are looking to expand the channels they sell through in 2019. What might surprise you is that 41% of SMEs are looking for space in physical stores to sell their goods.

75% of SMEs now have a website according to research from Royal Mail but almost half also have a bricks and mortar presence – for 80% of SMEs with a bricks and mortar presence this is their own shop, but 33% sell in another retailer’s store (which must include also some of those who have their own shop).

Other popular ways to sell goods for these retailers include: over the telephone (22%), via exhibitions (13%) and via a catalogue (12%).

Just under one in five UK SME online retailers import goods, 16% export goods and 52% do both. 12% neither import nor export goods. However, Over eight in ten of those that sell overseas target Europe, 42% sell to the USA and 29% to Canada. Asia (27%) and Australasia (23%) are also common destinations to target.

“Entrepreneurial UK SME online retailers are increasingly turning to online marketplaces to sell their products. The rise of online marketplaces is impacting the way consumers shop online and how retailers sell to their customers but the physical store still has a role to play. As the ecommerce sector becomes increasingly global, UK SME online retailers should look at opportunities to expand the international side of their business. At Royal Mail, we already support many retail businesses in their overseas expansion and we look forward to working with even more of them in the future”.
– A spokesperson, Royal Mail

The research was independently conducted by Illuminas and based on a representative sample of 301 UK SME online retailers and we suspect that if it had been limited to marketplace sellers that the percentage that export would be much greater. What is especially interesting is the number of SMEs selling in another retailer’ shop. There are many new businesses springing up in High Streets across the country which rent out space on a monthly basis – some will take a cut of sales and others rely purely on rent from multiple suppliers. Other SMEs will have more traditional supplier relationships with retailers and supply goods on normal contractual terms.

An example of a retail space that SMEs can easily access is All Our Own Crafts, a pop-up crafts shop based in Festival Place shopping centre, Basingstoke in Hampshire, UK. All Our Own Crafts host 40 small (and local!) businesses under one roof, many of which are too small to have their own retail space. There’s bound to be a similar enterprise in your area.

If you are a pure online retailer, take a wander up and down your local high street and consider if there are shops that could be interested in stocking your products.