Royal Mail : Majority of UK SME online retailers are confident sales will increase in 2018

• 74% of UK SME online retailers express confidence that sales will increase in 2018
• 70% of UK SME online retailers experienced an uplift in sales in 2017, compared to 2016
• The biggest concerns for retailers this year are the ability to make a profit (27%), increase sales (26%) and reduce costs (23%)
• 69% of retailers expect costs to be higher in 2018. The biggest costs expected are purchasing (34%), logistics/delivery (32%) and advertising (27%)
• 68% of UK SME online retailers sell overseas
• UK retailers sell the most to USA, France and Germany
• In 2018, 64% of UK SME retailers intend to increase their international sales revenue

The future is looking bright for UK SME (small and medium-sized enterprise) online retailers with 70% saying they experienced an uplift in sales in 2017 compared to the previous year and 74% expressing confidence that sales will increase in 2018, according to a study commissioned by Royal Mail. The health and beauty sector saw the highest increase in sales with 78%, followed by electronics (73%). Increasing their social media presence (43%), running more promotional offers (39%) and introducing new products/services (29%) are the main ways retailers are planning to achieve growth in 2018.

The main concerns for UK SME online retailers in 2018 are the ability to make a profit (27%), increase sales (26%) and reduce costs (23%). 69% of retailers expect costs to be higher in 2018 and the biggest costs expected are purchasing (34%), logistics/delivery (32%) and advertising (27%).

The study also found 68% of UK SME online retailers currently sell overseas. 80% of these retailers sell to Europe, followed by USA (35%), Canada (31%) and Asia (17%). In the fashion sector, 88% sell to Europe, 53% to USA, 28% to Canada, and 25% to Asia. 78% in the electronics sector sell internationally, followed by 72% of health and beauty and 67% of fashion retailers.

USA is the country where retailers sell the most to, followed by France and Germany. The most popular European destinations to sell to are France, Germany and Spain.

In 2018, 64% of UK SME online retailers intend to increase their international sales revenue. In the electronics sector the percentage is higher at 78%. In health and beauty it is 69% and in fashion 68%. Key ways of increasing international sales revenue will be by simplifying the sales/ordering/delivery and payment process (45%), selling more to the markets they already sell to (28%) and targeting new markets and countries (20%).

Nick Landon, Managing Director of Royal Mail Parcels, said 'It's great to see the level of business confidence from UK SME online retailers at the start of 2018. Although obvious challenges exist, retailers are grasping the available opportunities for growth and have a clear view of the actions they need to take to win new customers at home and abroad. At Royal Mail, we already support many retail businesses in delivering against exactly these opportunities and we look forward to working with even more of these great businesses this year.

UK SME online retailers are planning to target Europe (50%), USA (34%) and Canada (28%) in 2018 due to demand, good ecommerce structure and the ease of shipping and delivery. Europe holds the greatest opportunity, according to UK SME online retailers.

Ends

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Note to editors

The research was independently conducted by Illuminas and based on a representative sample of 300 online SME retailers.

About Royal Mail plc

Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and delivery services in the UK and the UK's designated universal postal service provider. UK Parcels, International and Letters ('UKPIL') comprises the company's UK and international parcels and letters delivery businesses operating under the 'Royal Mail' and 'Parcelforce Worldwide' brands. Through the Royal Mail Core Network, the company delivers a one-price-goes-anywhere service on a range of parcels and letters products. Royal Mail has the capability to deliver to around 30 million addresses in the UK, six days a week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which operates one of the largest ground-based, deferred parcel delivery networks in Europe.