Online small firms lose out to trusted brands
Online small retailers are losing sales to bigger brands, as consumers stick to trusted names in the uncertain economic climate, new research has shown.
According to shopping network EdealsUK.com, shoppers are more likely to buy from an established name online, because they fear that a smaller business may go bust before their goods are delivered.
EdealsUK.com’s research found that sales made by smaller retailers were down by 21% in the first two months of 2009, compared with the same period in 2008.
"Consumers are turning to bigger names such as Boots and Next to make their purchases,"said EdealsUK.com marketing manager, Nadeem Azam.
"In the past few years, price comparison websites have allowed small businesses to compete on a like-for-like basis with much bigger companies," he added. "If you could sell a product for less than anyone else, that got you sales. But that situation is starting to change.
"Despite money being tight, consumers are willing to spend a few extra pounds to buy an item from a retail name they know and trust," said Azam. "This is having a significant impact on small businesses that have not focused much attention on brand building."
Marketing specialist E-consultancy editor, Chris Lake, said the results were unsurprising in the wake of high profile retail failures such as Woolworths (soon to be trading trading online-only, according to the WooliesBlog) but that small online businesses could still build trust amongst shoppers.
"Always include security trust marks on your site, and make sure you’re part of an independent payment verification scheme to show consumers that you take their security seriously," he said. "Listing community information and updated customer testimonials will also encourage people to come back to your site.
"Making a contact telephone number easily visible and setting out a clear and transparent returns process are relatively simple, but they can also really help to reassure customers," added Lake. "Enhancing the customer’s experience is also crucial, so look at what you can offer over and above mainstream retailers. Giving a narrow delivery slot, for example, really adds to the convenience factor for shoppers."