Marginable Uplift in Sales for Online Retailers

The sixth quarterly UK online sales survey conducted by ecommerce specialist Actinic shows a slight increase in online retail sales for small to medium enterprises (SMEs) in the fourth quarter of 2011 compared to Q4 2010.

The research reports an average of only a 1.5% increase in sales revenue as well as a 1.6% increase in the numbers of orders processed in the three months to 31 December 2011, when compared to the same quarter in 2010. However, there was over a 3% increase in the average number of orders processed by each company in Q4 2011 when compared to Q3 2011.

The average order value has remained virtually unchanged at £76.30 for Q4 2011 compared to £76.38 for Q4 2010.

Simon Armstrong, marketing manager at Actinic Online comments,

“These figures show a turbulent time for SME online store owners with many needing special offers even before Christmas to tempt customers to place an order. This has meant a hit on the gross profit margins for many e-tailers. However, in comparison to the high street, with frequent announcements of chains of stores in difficulty, e-commerce is still faring well in very uncertain times.”

January sales start early

This year saw a new trend in which retailers brought sales forward with many offering discounts to entice shoppers to spend in the last few days before Christmas. Many online sellers started their sales on Christmas Day with Experian reporting 86 million hits to British shopping websites on Boxing Day.

This was borne out by Actinic merchants like Nick Powell of Trout Catchers:

“It was noticeable that shoppers were delaying placing orders before Christmas. In fact, many waited until after Christmas Day, and we saw a definite increase in orders from 26th through to New Year’s Eve, which hasn’t happened before.”

This is backed up by Paul Nicolson, designer for TerraTag:

“We are always trying different styles of promotions, but a percentage discount invariably works the best. Christmas 2011 was no exception; to get the orders we had to offer better prices than our competitors, but also ensure deliveries arrived promptly. That way customers are more likely to return.”

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