With online selling increasing annually to more than 40% of total sales for SMEs, according to the latest survey, what is your business doing to stay ahead?
The Sensis e-Business Report 2015, which is based on interviews with 1000 small and medium business owners and managers over the two months to June, focused on how SMEs were using technology and what they thought e-commerce had to offer. Here are the key findings:
What are SMEs using?
Ownership of desktops, notebooks and tablets was 83%, 52% and 43% respectively for SMEs, but there are significant differences between small and medium firms with the penetration of each type more pronounced in medium businesses.
Why are SMEs going online?
Internet connectivity is 98% in medium businesses compared with 83% in small businesses. In firms employing more than two people, internet connectivity is well over 90%, so it is the very small businesses, with one to two employees (73%), that bring the overall numbers down.
The most important reason for online use continues to be email, stated by 93% of all internet-connected SMEs. Other key uses include banking, looking for information about products and services and seeking suppliers of products and services. This reflects the importance of the internet for B2B transactions.
With websites, size matters
Employee size is clearly correlated with website incidence. It rises from 42% in businesses with one to two employees in solid increments up the business size scale to 100% in those with 100 to 200 employees.
Sixty one percent of SMEs with websites said this had improved the effectiveness of their business, mainly by increasing its exposure and facilitating information access for customers.
Expenditure on building and maintaining their website averaged $2500 in 2014 which was similar to the year before. The average was more than three times higher in medium businesses ($7500) than small businesses ($2200). Expected average expenditure on websites for 2015 is $2400 overall.
Yes to Facebook, Twitter … not so much
Thirty one percent of SMEs reported that they use social media in their business. Nearly all of those have a Facebook page but uptake of other social media platforms is not pronounced.
Online buying and selling on the up
Sixty percent of SMEs have made purchases online. For such SMEs, an average of 44% of their total procurement was transacted online, up three percentage points.
The percentage of SMEs taking orders online was 43%, but it is 34% in businesses with one to two employees, and closer to 50% in larger firms.
Online sales as a share of total sales activities continues to increase, from 32% to 37% to 41% over the last three studies.
Use of online advertising static
Thirty five percent of online SMEs advertise on this medium (up 5 points) and 31% do on social networks, just as in 2014. Twenty eight percent use unpaid search engine optimisation (SEO) which was two points higher this survey.
Almost one quarter (23%) of SMEs feel it is very important to be on page one of a Google search.
Adults big on technology and online shopping
Adult Australian consumers continue to embrace technology with 95% having a computer and many using a number of devices. This includes ownership of desktop (65%) and notebook (53%) computers, smartphones (72%) and tablets (56%).
Ninety three percent have used the internet in the last year. In certain segments, like full-time workers and students, it is 100%. Even 90% of retired people fall into this category.
Adult Australians using the internet on their mobile phones in the past year is quite widespread with 69% and 57% doing it on a tablet. Just over six in 10 made purchases online in the past year, spending on average almost $4400 for the year.