Physical stores remain important for SMEs says Royal Mail

By Chris Dawson February 22, 2019 - 10:59 am

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.

  • SAM
    3 months ago

    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.

    LOADS of them all with Too Let, For Sale signs, and Empty Streets, but all come with huge rents and rates ….Race to the bottom Britain…
    Honestly I would love to open one, and am in fact speaking to someone later this afternoon about 3 franchise options, but am wanting more up to date figures for footfall, and them to stop trying to sell me on examples of success stories from the South East things are different here in the North…

    • 3 months ago

      @Sam We are purely online at the moment but like you said, I do have a couple of local shops that stock a small range of my products.

      For small shops there is the benefit of Small business rate relief and you can sometimes negotiate with the landlord over the rent, for me the added expense is staff, I would not want to run it myself.

      I have toyed with the idea of opening a shop and may open an indoor market stall in the North West later this year, as I have somebody who can run it 3 days a week.

      Things are different in the north compared to living close to London, but here we pay a lot more for rent, housing and the general cost of living. If I moved my business to the NW my rent would be a 1/3rd of what it is now but my income would be the same.

      Footfall is important but not something that you can rely on, I have seen many businesses that have failed through lack of promoting themselves on social media compared to those that do. You need to drive traffic to your door.

    • alan paterson
      3 months ago

      @ Tyler. I tried an indoor market with our product a few years ago, we thought that budget shoes would sell. We are next to one of the biggest indoor markets in UK with a 9000 footfall per weekend.

      what a waste of time. when I deducted the price of the stalls (I think it was about £80) my staff (another £80) my van and fuel and the dozen cheeseburgers I used to eat from the snack vans – I was running at a loss.

      6 months and 2 extra stone later – I was still not making any money. I wrapped it. It depends on your product but it certainly didn’t work for shoes. I was selling LEATHER shoes for £20 and folk still wanted a discount. Not to mention the thefts! (easy to steal shoes once they are on your feet – I can’t chase anymore). It was disheartening.

    • 3 months ago

      @alan paterson So you ate all the profit and were too fat to chase the thieves….

      I have no idea why it did not work for you Alan, sometimes things just go that way, I am sure there are people out there selling shoes from market stalls and making a living.

      £80 seems a bit steep for a market stall, the one I have my eye on is an indoor style market for £25 a day in a very deprived area of the NW, probably be lucky to take £100 a day.

      But the think is you had a go.

    • alan paterson
      3 months ago

      @ yes, but I didnt eat all the profit – there was no profit to begin with. I tried all types of promotions. We did:

      “buy left shoe get right shoe free”
      “free air with all Airmax TM trainers”
      “free laces with all slip on shoes”

      I even tried modelling the slippers myself with only my underpants on.

      nothing worked and I ended up putting on 2 stone. I would not recommend it.

    • 3 months ago

      @alan paterson Like I said, although it did not work out for you, it does work for others.

      I think I would have worked out it was not profitable within the first 2 months.

      My project is in the pipeline, it will be a trial to see if it works out, I won’t lose too much money or sleep over it if it does not.

    • alan paterson
      3 months ago

      @ Tyler, I was told by several of the long term stall holders that I needed to have a presence at the market for at least 2 years so that folk would get to know my location. Most stall holders were claiming DSS to supplement their income.

      The only stalls that seemed to be making money were the snack vans, the pet stall and fishing tackle stall. BUT not shoes.

      Best spend your time on Ebay in my opinion.

    • 3 months ago

      @alan paterson I hear you but as I said before, it depends on many factors.

      It didn’t work for you, it may not work for me, I will let you know….

      I would rather spend time on my own website promotion than eBay, my sales seem to be at an all time low yet Amazon seem to be increasing.

      Try and keep away from those burgers…..

  • jim
    3 months ago

    who one cares about all this horlicks, ,or acts upon it, other than a royal mail with price increase

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