How Small Businesses Are Engaging In E-Commerce
Currently, e-commerce has brought in close to $42 Billion in retail sales and will only steadily increase as more and more consumers turn to the Internet for their purchasing needs. However, the integration between e-commerce and small business seems to be slow coming.
E-Commerce Retail Sales in Billions:
3Q 2009 – $36.5/4.0%
3Q 2010 – $41.5/4.2%
Small Business and Internet Integration
A recent survey from Discover Credit Cards found that although small businesses are beginning to embrace e-commerce, less than half of small businesses surveyed have a website.
Small Businesses with Websites
2007 – 33%, 2009 – 45%
Small Businesses and their Websites
A major reason why small business owners don’t have a website or participate in 3-commerce is simply because they feel they do not need one.
Reasons for not having a website
- 41 % – Business currently does not need one.
- 19% – Cost
- 16% – Lack of time
- 10% – Other
- 9% – Too complex
- 4% – Business will never need one
- 1% – Not sure
Many corner markets, dry cleaners, bakeries, and other mom-and-pop operations have enough neighborhood foot traffic that they really don’t need the Internet to turn a profit. Their Internet penetration is limited to an online Yellow Pages listing. However, 13% of new small businesses do plan on connecting their business to the Internet.
Small Business Website Functions
How small businesses use their websites could also explain their lack of penetration in e-commerce.
- General Information – 80%
- Customer Service – 45%
- Capture Leads – 35%
- E-Commerce – 30%
- Reservations/Appointments – 15%
- Posting a Blog – 13%
Small Business and Annual Sales Size
Barlow Research found that the average number of small businesses that have a website is around 45%. However, this same study also found that the larger the annual revenue for a small business, the more likely that business was to participate in e-commerce.
- 69% – $1,000,000 – $2,490,000
- 67% – $2,500,000-$4,900,000
- 49% – $500,000 – $999,000
- 45% – $100,000 – $499,000
Small Business and E-Commerce Investments
Only a small number of respondents planned on increasing their budgets to make their small business web-enabled or e-commerce ready.
- 17% Put money towards their website
- 15% Put money towards email marketing
- 13% out money towards social media marketing
Small businesses seem more apt to partake in social media marketing that to invest money into creating a website for e-commerce or marketing. While many feel that the next wave of commerce will come in the form of mobile commerce or “m-commerce,” it is still too soon to tell if small businesses will embrace this new form of commerce.
Currently only a small percentage of online retailers participate in mobile commerce.
- 37% of smartphone users have purchased an item via m-commerce
- 8.8% of retailers using m-commerce
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