Indies fear rise of online sales, says Autumn Fair survey

Independent retailers see rising online sales as a major threat to their business and believe a tax on e-commerce merchants is necessary to level the playing field, according to the Autumn Fair Retail Sentiment Survey 2013.

The proportion of independent retailers fearing the threat of rising sales from e-commerce rivals is up from 22% to 37% over the past 12 months, according to the research.

Their fear is based on a perceived increase in ‘show-rooming’ – when customers photograph and research products on their Smartphones in-store, and then buy the products online at a lower price. Some 55% of retailers have seen an increase in ‘show-rooming’ over the past year.

As a result, a similar proportion of those surveyed (53%) believe e-commerce merchants should have their sales taxed, in much the same way as ‘bricks and mortar’ shops have to pay business rates.

Yet, the study says, independent retailers are doing little to jump on the e-commerce bandwagon themselves, as the number earning revenue from online sources has fallen over the past year. Nearly two-thirds (65%) of retailers earned less than £1 in every £10 from online sales.

Other issues regarded as major threats to business include economic instability, rising rents, rising business rates and falling consumer confidence.

Autumn Fair portfolio director Nick Davison said: “It’s clear that online retailers are seen as a threat to traditional, bricks-and-mortar stores. But if you can’t beat them, join them! Independent retailers need to think about how they can spruce up their websites to ride the crest of the e-commerce wave.

“They should also be thinking about how they can use their assets to their advantage. Customers often want to buy high-quality goods in person, which means proactively promoting high quality stock through attractive window displays, running customer competitions and raising the profile of your stores through getting involved in the community. Independent retailers need to put their best foot forward if they are to survive in this tough economic environment.”

Although nearly half of retailers surveyed run discount schemes or loyalty programmes to attract more custom, but 42% do not run any.

Retailers believe a cut in VAT is the best solution to improving the overall health of the High Street (57%), followed by Government investment into the retail sector (50%) and the freezing of business rates and lower car parking costs (45% each).

It appears independent retailers in the UK have a patriotic streak in these difficult economic times: 61% of them are sourcing an increasing amount of stock from the UK, with a fifth sourcing between 75-100% of their stock from within these shores.

Organised by i2i Events Group, Autumn Fair International was held from September 1-4 at the NEC in Birmingham.

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