Small businesses are failing to exploit the opportunities presented by e-commerce, probably as a result of poor marketing expertise, according to new research by the Small Business Research Trust (SBRT).

The study – the first since the relaunch of the Trust's ongoing quarterly research programme into small business issues – shows that whilst access to the Internet, broadband connection and owning a website where relatively high amongst small businesses (90 per cent, 64 per cent and 73 per cent respectively) only 28 per cent reported a growth in sales through e-commerce. Just under 50 per cent stated they had seen no increase in sales through e-commerce, whilst the remaining 22 per cent said they didn't know what impact it had had.

A follow-up question revealed that expectations of the potential benefits of e-commerce are slightly more positive, with 50 per cent expecting sales to rise, and 49 per cent expected them to remain static. This suggests that SMEs are not realising their own objectives when developing websites and must invest more in website construction to ease use and traffic-driving initiatives to generate interest.

Dr Alan Southern, senior lecturer at University of Liverpool Business School, who carried out the research on behalf of SBRT, says this failure to utilise e-commerce is symptomatic of a wider lack of understanding of marketing amongst SMEs. “Small businesses as a sector are simply not exploiting e-commerce as a sector. This is a huge opportunity for them, and something they should really go to town on.” He points out that the success of many UK companies over the last twenty years has been based on a good understanding and exploitation of e-commerce.

He continues, “This research suggests that marketing skill must be increased across the board. Many SMEs develop marketing expertise in the long-run, but startups struggle.”

New start for the survey

The SBRT has been conducting research into issues affecting small businesses on a quarterly basis since the late 1980s, on behalf of the Forum of Private Business, a not-for-profit lobbying organisation campaigning for the interests of small businesses. The SBRT research programme was recently relaunched the project in association with the University of Liverpool, and sponsored by HSBC.

University of Liverpool vice chancellor Professor Drummond Bone, comments, “The growth and health of smaller businesses is vital to the UK economy. Universities should have a much larger part in that growth than they have had in the past.”

Kieron Hayes, press officer for FPB, explains that the revamped survey has a wider reach than previous research, with a total of 12,000 SMEs participating. “The research is now broader and more inclusive, and therefore offers a clearer reflection of the issues faced.”

Like Southern of University of Liverpool Hayes says he was surprised that the benefits of e-commerce have been so limited. “The Internet is a very valuable and cheap medium – it allows they to potentially look as good as Marks & Spencer. They are missing a trick here.” He says there are isolated examples of SMEs using the Internet for massive marketing benefits, sometimes on a global scale, but he says companies in this sector are often held back by their inability to think big.

Mike Conroy, senior marketing manager at survey sponsor HSBC, agrees. “You don't have to spend tens of millions to take advantage of the Internet for e-commerce. It must be part of SMEs' marketing mix. This survey shows that good marketing skills simply aren't there. Skills like tax and finance are seen as critical by this audience, but marketing expertise isn't.”

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