A recent study to measure the effectiveness of an online presence for retailers has revealed some surprising results.
Undertaken by Galaxy Research, the study was commissioned by American Express and comprised 1,012 small business owners across Australia with businesses generating an annual turnover of up to $2 million.
Conducted in August 2012, the research revealed that small businesses which have embraced e-commerce are 33 per cent more likely to have reported a profit increase in the 2011-12 financial year.
In addition, the study found that one-in-three small businesses have made their products available for purchase online with as many as two in three smaller retailers now using e-sales channels.
Smaller retailers in particular have embraced online channels for their business, with those that have implemented e-sales saying it accounts for 63 per cent of their revenue and 44 per cent expect an increase in this type of trade in the next 12 months.
American Express head of marketing and customer engagement, small business services, Amelia Zaina said the study highlights the increased importance for retailers to adapt to the digital age if they want to flourish.
“With 25 per cent of those who haven’t already established an e-sales strategy now thinking about doing so in the next 12 months, it is clear that more and more small business retailers understand the importance of getting online,” she said.
However, in perhaps the most insightful discovery, the research also suggests that Facebook pages have taken over from company websites and more traditional marketing channels as most effective marketing channel for businesses.
According to the report, one-in-three retailers said social media has helped them grow their business in several ways, including:
- Sourcing new customers (65 per cent)
- Generating new sales (53 per cent)
- Raised brand awareness (39 per cent)
Respondents indicated that Facebook in particular (72 per cent), and Twitter (28 per cent) are the most successful social channels for stimulating business growth in retail small businesses.
Zaina said the results are indicative of the changing retail landscape.
“For retailers to remain competitive may mean not only changing the way they market their business, but also the way in which they make sales.”