Small businesses ‘miss out’ on internet shopping boom

Consumers prefer firms with websites, research shows

Internet shopping sales in the UK are expected to rise by 40% in 2007, from £30bn to £42bn, according to an industry body.

The Internet Media in Retail Group has predicted that 20% of all retail purchases will be made over the internet by 2010, as increasing numbers of households gain broadband internet connections.

However a separate report from TalkTalk Business has suggested small businesses are failing to capitalise on the rising popularity of the internet.

The findings show that although most UK adults said it is important to support local businesses and local employment, they are likely not to purchase products or services from small businesses without an adequate online presence.

Eight out of ten consumers use the internet to find out about a product or service before buying it and 40% of these consumers are put off buying the product or service if there is no website.

Professor David Storey, head of SME research at the Warwick Business School said:

“The research clearly shows that 65% of us feel better if they buy from a smaller business rather than a large national organisation. But small businesses are missing out on this goodwill as in many instances they do not have a website or if they do, it is not a good representation of the business.”

The internet could be particularly important for small businesses, as the TalkTalk research shows they are still battling against customer misconceptions.

Six out of ten consumers believe that the prices they pay will be higher from a small business. Nearly half (49%) believe there will be less choice, and four in ten believe the products will be sold out.

“Cost and a lack of know-how is often the reason why small businesses are still lagging behind on technology, but if UK small businesses are to survive in an increasingly global market place it is something they need to address and fast,” said Professor Storey.

© Crimson Business Ltd. 2006

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