Online retail continues to grow Most have protection plans

„ DALLAS SHERRINGHAM

IF the pandemic taught business owners managers anything, it is to be prepared for anything.

Many learnt the lesson the hard way, but as they face a potential financial slump later this year 90% are prepared this time around.

New research reveals that two out of three Australian online retailers increased their revenue in 2022 despite inflation and rate rises, and nine out of 10 plan to invest more in their business to protect against current economic pressures.

These include expanding their product ranges, improving their customer experience online, and offering more delivery options.

The findings were derived from a survey of 200 online retailers by leading parcel delivery service CouriersPlease.

Business owners and senior decision makers across different retailer sizesmicro (one-15 employees), small (16-50 employees), medium (51-200 employees) and large (more than 200 employees) - were asked whether their revenue increased in 2022 and what investment plans they had to help protect their revenue this year.

Nine in 10 online retailers have at least one business investment plan this year, to help protect their business from lower consumer spending. A breakdown of their responses are as follows:

• 42% will expand their product range.

• 38% will improve their E-Commerce stores.

• 34% will invest in marketing.

• 31% will expand into new markets.

• 31% will implement new technology such as customer service chatbots, automated fulfilment in their warehouses to improve their customer service.

• 18% will introduce more delivery options.

• 15% will create a better returns or exchange processes.

Richard Thame, CEO at CouriersPlease said the results were encouraging and indicated online retailers’ commitment to their business growth.

“Online retailers are still enjoying the positive effects of the E-Commerce boom, and total revenue for the Australian market is forecasted to continue growing steadily year-on-year, with the market projected to reach US$35B by 2025,” he said.

“But the survey shows that retailers are not naïve to economic fluctuations and are acting now to prepare for potential future challenges.”

Micro businesses are most likely to neglect the need to invest in their business to generate sales in a tough economic pe- riod, with one fifth of this group admitting they will do nothing to hedge against an economic slowdown.

This was followed by only 10% of medium-sized businesses and four per cent of small businesses. Zero per cent of large businesses are willing to resign to fate in the event of economic turndown.

The proactive planning and resilience of these online retailers is exemplified by their positive results for 2022. Twothirds (64%) of online retailers reported increased revenue in the last calendar year, despite inflation and increasing interest rates throughout 2022.

Just over a quarter 28% of respondents said their 2022 revenue remained the same as in 2021, and only eight per cent of online retailers reported lower revenue in the last calendar year.

A closer look at the data reveals 69 % of online retailers based in NSW report- ed a revenue increase in 2022, closely followed by Victoria with 66%, then Queensland with 58%.

Given online retailers in these States are already planning ways to tackle recessionary impacts for the year ahead, it is arguable that NSW, Victorian and Queenslander online retailers will report another positive revenue year for 2023.

Larger retailers were more likely to have increased their revenue in 2022 from 2021 levels, chosen by an impressive 91% of large retailers, 68% of medium-sized retailers, 62%cent of small retailers and 53% per cent of micro retailers.

Similar proportions of micro, small and medium-sized retailers achieved the same levels of revenue in 2022 as in 2021, all between 30-32 per cent. This compares with just 5 per cent of large businesses whose revenue did not change in the same period.