Why are SMEs reluctant to get online?

With Britain spending an estimated £68bn a year shopping online, our mid-sized and smaller businesses need to make greater use of online marketing to draw in local revenue, says new research commissioned by bdaily this month: only one in four SMEs carry out online marketing to drive their business, in spite of the importance of local customers and supplies for their success.

Bdaily’s research shows that the vast majority of SMEs, which contribute £1trn to the economy, are neglecting the internet as a tool to reach their most important customers and support and indeed to network with each other. Some 57 per cent of all SMEs mainly use suppliers within a ten-mile radius of their location.

Why aren’t more SMEs online?

Lack of expertise

Much of the issue comes down to SMEs’ lack of skills when it comes to digital and online networking. The report shows 67 per cent citing lack of expertise, confidence or understanding of the opportunities available as the main reason for not venturing online.

“The expected returns from the online channel are being lost through an ineffective supply chain, as many traditional retail supply chains simply aren’t set up to meet the demands of an online consumer – failing to meet the customer’s expectations in areas such as customer service, delivery, packaging and returns,” says senior consultant and retail expert at ERA, Tony Wilcock. “While the internet offers a brighter future than the high street, with many consumers visiting stores but buying goods online, retailers cannot afford for their supply chains to be a weak link at a time when every penny counts.”

Businesses that fail to promote their firm online to their target market are putting themselves at serious disadvantage to the 25 per cent that do.

SMEs simply can’t keep up

Have SMEs simply failed to keep up with emerging technologies?

More people are going online; a recent global survey carried out by eventbrite highlighted the UK as the biggest social network sharers: “Every time someone in the UK shares an eventbrite event on facebook, 22 of their friends and contacts click on the link.” This is an important way to drive traffic to business sites. With Brits spending more time online then ever, local SMEs need to use thriving social networks to advertise to customers.

New modes of technology means Britain now accesses the web in a variety of new ways. Research carried out by the online advertising network, chitika, showed some 24 per cent of Google’s search queries are now local. Smart phones, tablets and netbooks also make it easier to find immediate local information. Geotagging has made it quicker and easier to send your own whereabouts to others or find local amenities. If businesses aren’t responding to these changes, they’re losing out on vital revenues.

Budgets, or the lack of

For the SMEs that are investing in online marketing, budgets are extremely tight. Bdaily research showed that 45 per cent of businesses spent less than £200 a month on their digital presence; fewer than one in ten stepped over the £1,000 mark.

The pressure to get online has led SMEs to explore other avenues of advertising: 31 per cent say PR and content marketing is their number one choice; some 28 per cent believe display advertising the answer, whereas only 24 per cent use email marketing.

“I’m astonished that given SMEs account for 99 per cent of all enterprise in the UK and more than half of them rely on local business to survive, so few are using the web to connect with their local business communities,” says bdaily founder and managing director, Siobhan Bales. “SMEs really should be looking at the web as a local resource, not just a worldwide one.”

Your local community still matters. Message to growing businesses: don’t shy away from online marketing; instead see it as a tool to communicate with customers and suppliers, and to build a  network within your local community.

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