On the face of it, Welsh enterprise is booming. The country’s 240,000 SMEs turned over £46bn in 2017, equivalent to £126m every day (Federation of Small Businesses). SMEs also provide 62% of all employment in Wales, and following the gradual decline of the country’s heavy industry, traditional high street businesses have become a vital part of the economy.
Yet, according to recent research from NatWest, Welsh SMEs could add £1.36bn a year to the UK economy with a series of productivity-boosting measures. Greater investment in technology was central to the recommendations, but the same survey found that just a third of SME owners in the region were prioritising digital adoption.
Are Welsh businesses punching under their weight, and failing to exploit the potential of ecommerce?
10,000 businesses, over £100m in revenue
Bricks and mortar retailers of all sizes are facing the axe today, making ecommerce a saving grace for high street businesses as a revenue stream. Ecommerce platforms that can take the pain of picking, packaging and distributing out of the equation could breathe new life into businesses that traditionally rely on retreating footfall.
This is according to head of Amazon UK, Doug Gurr, who addressed around 300 SME owners at Amazon Academy Wales earlier this week.
Gurr quoted fresh figures from Keystone Strategy showing that the 10,000-plus Welsh businesses selling on Amazon Marketplace generated £100m in 2017, helping to support over 3,000 local jobs. 60% of Marketplace sellers use the platform to export goods and services.
“This is just the beginning and there’s more to do and more to achieve. So I hope through programmes like the Amazon Academy, we can help even more businesses grow their revenue, increase their productivity and boost exports, to build a stronger economy and create more jobs in the country.”
– Doug Gurr, head of Amazon UK
Will Amazon save the high street?
Welsh Assembly member – and local enterprise hero – Russell George arrived in Newport with his own unique insight. As a small business owner himself, the politician-come-entrepreneur explained how Amazon had once “saved” his bricks and mortar business from folding.
“Cash flow was tight and I couldn’t even fill my car up at the petrol station, my overdraft was full, my credit card was full. It was a really stressful time,” he revealed.
Acknowledging that something needed to change, George embraced ecommerce and saw a change in fortunes.
“12 years later, our turnover has gone up every single year, and has increased by about 40% (in that time). That’s in part because of Amazon.”
George’s own experiences demonstrated the impact selling online can have on a high street firm’s revenue, especially given a trading environment of poor parking infrastructure, high business rates and the rise of online shopping. However, he also explained the resistance he’d encountered when visiting a business owner on his local high street who was struggling to keep doors open.
The business owner told George the store had been in the family for generations, but was close to closure. After the Assembly member asked what their website was like, the owner responded: “Oh, we don’t have one”.
“So I picked something off the shelf and I got my phone out and typed it into my browser alongside ‘Amazon’,” George recalled.
He showed the retailer that the item was selling higher on Amazon than it was listed for in the shop, with the same price on eBay.
“You can sell to millions of people, instead of 10,000 people. And their response was ‘we don’t believe you.’ That was their attitude.”
The exporting opportunities made available by Amazon, George said, would save UK high streets.
He added: “To me, a business that stands still just goes backwards. I learned that for myself in my own business experience.
“Thankfully, everybody here today is not in that category. You’re here to grow and expand your business. Amazon is the saviour of the high street. That’s my own experience.”
Since 2016, Amazon’s Academy programme has been helping SME owners across Britain increase sales through greater digital adoption. The key messages of this year’s Academies, from Glasgow to Newcastle, has been clear – selling online is not only key to survival, but will drive business growth.
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