1/25/13

Small e-retailers have big plans

49% will create sites this year and most will offer free shipping, a survey says.

Amy Dusto , Associate Editor

In a survey of 600 small retailers that almost all sell online, nearly half—49%— say they plan to create a new web site this year and 14% say they will start offering free shipping on all purchases, catching up to the 42% reporting that already do.

E-commerce company Alibaba Group of China conducted the survey in December 2012 jointly with two U.S. companies it bought in 2010, Auctiva and Vendio, both of which provide tools for sellers on eBay and other online marketplaces. 97% of the retailers that responded to the survey sell online, 80% are web-only retailers, 85% are based in the United States (with just 21 retailers from outside North America) and 82% had 2012 revenue of $50,000 or less, Alibaba says.

After building new e-commerce sites, the respondents’ next most popular plans for expansion in 2013 are to import new products (30%), start selling internationally (18%), build a mobile web site (14%) and build a new physical retail location (10%), the survey says. Just 17% of retailers in the survey say they already have a mobile-optimized web site.

Most retailers surveyed plan to make those improvements without extra staff—87% of respondents say they will hire no one this year.

While 46% of the respondents say they expect revenue to grow this year, their top business priority for 2013 is cost-reduction and streamlining business processes, say 78%. For many, Alibaba points out, advertising with Google Inc. represents an important consideration in those costs: 46% of respondents say they aren’t sure if they’ll pay for Google Shopping ads in 2013, and 38% say they cannot afford to pay for Google Shopping at all—Google started charging last fall for clicks from product placements in the middle of natural search results, those clicks previously were free.

Asked which marketing tactics were effective for them in 2012, 54% cited word of mouth, and 37% selected social media campaigns. Retailers could select multiple options.

Of the 41% of respondents who say they will sell internationally in 2013, 29% say their top choice is the United Kingdom, followed by China and Brazil, cited by 15% of respondents, and India and Russia, each cited by 11%.

Turning to political questions, 70% of respondents say taxes are their biggest concern in 2013, followed by government regulation (50%) and the Affordable Care Act, also known as Obamacare (36%).

Topics:

Affordable Care Act, Alibaba Group, Brazil, China, free shipping, Google, Google Shopping, government regulation, India, Obamacare, Russia, small retailers, social media, United Kingdom, Word of mouth

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