New research conducted by parcel delivery service CouriersPlease reveals that 90 per cent of Australian online retailers are not expecting any revenue growth in 2023 as they face a slew of challenges such as inflation, surging interest rates, and wage pressures, alongside decreased consumer spending and demand brought about by the inflation.
The retailers cited cashflow availability as their primary concern according to the survey, followed by customer retention and overhead costs.
Commenting on the survey results, Richard Thame, CEO at CouriersPlease said the findings were a stark reminder of the challenges faced by online retailers of all sizes and regardless of jurisdiction, but that he wasn’t concerned, given the strength and resilience of online retailers.
“While the economic outlook is uncertain, I have no doubt that the eCommerce sector will overcome the challenging environment and emerge ever stronger on the other side,” Thame said. “In 2022 we delivered more than 30 million parcels, an increase of two million when compared with 2021. Both years were fraught with their own economic challenges, but as our records show, online retailers managed to adapt and strategise to secure sales.”
On an organisational size level, the mood of smaller SMEs with 16-50 employees was most bleak with 57 per cent saying that they expect to see a drop in sales revenue this year. This sentiment was echoed by 50 per cent of microbusinesses with one-15 employees, 46 per cent of larger businesses with more than 200 employees and 42 per cent of larger SMEs with 51- 200 employees.
And while cashflow availability was the dominant concern for microbusinesses (40 per cent), SMEs employing 16-50 employees were most concerned about customer retention (37 per cent) followed by staff shortages (35 per cent). For larger SMEs employing 51-200 people, the dominant concerns were equally weighted between cashflow availability and overhead costs (36 per cent). This contrasted with larger businesses employing more than 200 employees who flagged their most acute concerns were equally weighted across staff shortages, staff retention, competitor activity, cashflow availability and overhead costs.
“The data reveals online retailers are facing a varying number of significant challenges and that there isn’t one universal issue affecting all businesses,” Thame said. “Concerns such as cashflow constraints and the ultra-competitive labour market can’t be resolved overnight, but by keeping the customer experience at the heart of their business journey, such as providing convenient delivery options or offering loyalty incentives, online retailers can mitigate avoidable revenue loss.”
