Despite the ongoing challenges posed by inflation and interest rate increases, new research by parcel delivery service CouriersPlease reveals that two-thirds of Australian online retailers have actually increased their revenue in 2022.
The report also found that nine in 10 online retailers plan to invest more in their business to protect against these economic challenges: in detail, 42 per cent will expand their product range; 38 per cent will improve their eCommerce stores; 34 per cent will invest in marketing; 31 per cent will expand into new markets; 31 per cent will implement new technology such as customer service chatbots and automated fulfilment in their warehouses to improve customer service; 18 per cent will introduce more delivery options; and 15 per cent will create better returns or exchange processes.
Richard Thame, CEO at CouriersPlease, said that the results are encouraging and indicate online retailers’ commitment to their business growth.
“Online retailers are still enjoying the positive effects of the eCommerce boom, and total revenue for the Australian market is forecasted to continue growing steadily year-on-year, with the market projected to reach US$35 billion by 2025,” Thame said. “But the survey shows that retailers are not naïve to economic fluctuations and are acting now to prepare for potential future challenges.”
The research noted that micro businesses (businesses with one to 15 employees) are the least likely to invest in their business to generate sales in a tough economic period, with 20 per cent of this group admitting they will do nothing to hedge against an economic slowdown. This was followed by only 10 per cent of medium-sized businesses (51-200 employees) and four per cent of small businesses (16-50 employees). Meanwhile, all the large businesses surveyed (more than 200 employees) have stated that they will not stand idly by and let the recession affect them.
As the 2022 data has shown, the research highlighted the increased revenue experienced by retailers as a result of proactive planning and resilience with 64 per cent reporting increased revenue in the last calendar year, while 28 per cent stated their 2022 revenue remained the same as in 2021. Only eight per cent of online retailers reported lower revenue in the last calendar year.
Larger retailers were more likely to have increased their revenue in 2022 as reported by 91 per cent of large retailers, 68 per cent of medium-sized retailers, 62 per cent of small retailers and 53 per cent of micro retailers. Similar proportions of micro, small and medium-sized retailers achieved the same levels of revenue in 2022 as in 2021, ranging between 30-32 per cent. This compares with just five per cent of large businesses whose revenue did not change in the same period.
“The link between scaling and investing in different areas of the business, and a positive revenue report is clear,” Thame said. “It makes sense that the online retailers that are forward-looking in their business development will help keep their customers engaged and interested in their products and services.
“By offering new products, easier pathways through their eCommerce store, or a range of delivery options, retailers provide customers with a positive user experience that can help convert sales and increase revenue, even during more challenging economic times,” he concluded.
