SMEs use the internet widely for electronic commerce, with 60 per cent of them placing orders via the internet and 65 per cent using it to pay for products and services. More than seven in 10 SMEs look for information on products and services via the internet.
The report also says:
The survey revealed that many SMEs are yet to sell on the internet.
The report also found that although there are many SMEs not taking orders online, the average proportion of SMEs taking orders online has increased in the last three surveys, from 32 to 37 to 41 per cent now.
· Those in the retail, and health and community sectors took only 27 per cent of their orders online.
· 49 per cent of SMEs in manufacturing reported that online orders made up the majority of their orders.
· On the other end of the scale, only 16 per cent of SMEs in retail trade reported receiving the majority of their orders online,
Who are they selling to?
· 92 per cent of SMEs that sold online reported making sales to local customers.
· 66 per cent say locals are their main online customers.
· 46 per cent sell to interstate and 45 per cent sell to other regions of their state or territory.
· For three per cent of SMEs, overseas customers were their main e-commerce customer group.
· Medium businesses were much more likely than small businesses to use the internet to target overseas customers – 27 compared with nine per cent.
Among those connected to the internet:
· 51 per cent make sales using e-commerce.
· 43 per cent have no intention of introducing e-commerce to their business.
· 14 per cent of SMEs looking to introduce e-commerce plan to do it immediately, while 44 per cent are looking at introducing it at some stage in the next year, while 14 per cent of interested SMEs felt it would be more than five years before they would implement e-commerce in their business.
Concerns about e-commerce
SMEs’ concerns about e-commerce include
· Security concerns related to hacking – 46 per cent identified this as a major concern.
· The second most important concern (at 23 per cent) was a lack of expertise and knowledge with computers.
· The SMEs were least likely to be concerned about customer readiness to carry out transactions online.
· 35 per cent of SMEs reported using the internet for online advertising.
· 29 per cent used cloud computing.
· Cloud computing has been embraced most by SMEs in the communications, property and business services sector (40 per cent of this sector used it).
· 28 per cent used unpaid search engine optimisation.
· SMEs in the manufacturing sector were the most likely to use unpaid SEO to advertise their business (41 per cent of online SMEs).
· Paid search engine marketing (SEM) was used by 18 per cent of SMEs.
· The use of mobile advertising remains low at nine per cent.
· When asked how essential it was to appear on page one of a Google search, 23 per cent of SMEs said very important, 23 per cent said somewhat important and 39 per cent said unimportant.
· 32 per cent of SMEs in the retail sector were likely to undertake paid SEM, while only seven per cent of those in finance and insurance would do the same.
· The wholesale sector showed the strongest use of online display advertising overall (45 per cent), one point ahead of retail and two points ahead of manufacturing.
· 56 per cent of retailers and 46 per cent of hospitality SMEs advertised on social networks.
· Mobile advertising was most likely to be undertaken by SMEs in health and communications (19 per cent) and retail (18 per cent).
Digital business strategies
The Sensis e-Business Report found 84 per cent of SMEs have an online presence. Here are the results of how they strategically plan in this space:
· Of SMEs on the internet, only 17 per cent have a digital business strategy.
· 31 per cent of medium businesses and 17 per cent of small businesses had a digital business strategy.
· SMEs in metropolitan areas were more likely to have a digital strategy than regional SMEs (20 per cent compared with 14 per cent).
· Social media and mobile strategies have become a more important part of digital business strategies.
· 78 per cent of SMEs that had a digital business strategy reported that it had been developed in house.
· 29 per cent of SMEs that had a digital business strategy developed it within the last year.
· 37 per cent reported having had a digital business strategy for more than five years.
· While there has been an emphasis on mobile digital strategies in the broader business community, just six per cent of SMEs who responded to the report said they had developed a mobile app for their business.
· Medium businesses were much more likely to have developed a mobile app (16 per cent compared with five per cent of small businesses).
· SMEs in the retail sector were leading the charge – 17 per cent had developed such an app, while only two per cent of those in building and construction, and health and community services had apps.
· Nine per cent of those SMEs on the internet without a mobile app intend to develop one in the coming year.
The use of websites
After connecting to and using the internet, for many businesses the next step is the design and construction of a website. The Sensis e-Business Report found:
· 56 per cent of SMEs have a website.
· Of those who don’t, six per cent intend to build one within the next year, while 39 per cent of small businesses have no plans to build a website.
· 35 per cent of SMEs have a mobile-specific or optimised site and 28 per cent intend to get theirs optimised within a year, 16 per cent of SMEs are unsure, while 56 per cent will not optimise their sites.
· 61 per cent of SMEs said that a website increased business effectiveness. They reported that the website offered better exposure to the market, customers were able to more easily access information and their enquiries and sales had increased.
· 43 per cent experienced increased customer awareness and 13 per cent experienced increased sales or orders thanks to a website.
There is a strong link between the size of a company and the use of a website.
· 42 per cent of businesses with one or two employees have a website.
· 58 per cent of business with three or four employees have a website.
· That number rises to 71 per cent for business with five to nine employees, 78 per cent for those with 10 to 19 employees, 89 per cent for those with 20 to 99 employees and 100 per cent for businesses with 100 to 200 employees.
· 78 per cent of manufacturing businesses have a website, while only 40 per cent of those in the transport and storage sector have one.
· For those SMEs connected to the internet but without a website, 42 per cent had some other form of internet presence – 28 per cent with a business directory listing, 15 per cent with a presence on a third-party website, and 20 per cent with a social media presence.
· About nine in 10 SMEs have information on company history and product descriptions on their websites.
· Other features include an email enquiry form (82 per cent had this feature), product pictures (72 per cent), company news (47 per cent), video (26 per cent) and special offers (35 per cent).
· 81 per cent use location maps, 15 per cent have investor information and 32 per cent include independent reviews and testimonials.
· 32 per cent of SMEs include pricing information and 19 per cent have transaction functionality.
· Nine our of 10 SMEs update their websites at least yearly, with the majority updating at least every month.
· SMEs spent an average of $2500 building and maintaining websites. Small businesses reported spending an average of almost $2200. That figure was almost $7500 for medium businesses.
· SMEs in the wholesale and the transport and storage sectors spent the most on their website – on average it was around $4400 and $4100 respectively.
· SMEs in hospitality and the cultural, recreational and other personal services sector spent an average of just $860 each.
While the digital age is upon us the facts and figures from the Sensis show that many small and medium businesses are missing out on opportunities created by having a strong digital presence. It will be interesting to watch the figures in the years ahead to see how many businesses realise that they miss out if they don’t start embracing digital change.
Resources and about Sensis:
As Australia’s #1 marketing services company, we’re here to engage consumers with Australian businesses. We make this happen through a number of leading brands – Yellow Pages, White Pages, TrueLocal, Whereis and Skip and our expert digital know-how. Our digital expertise is what sets us apart – we give businesses a competitive edge through websites, search engine marketing and optimisation, data, and through our digital advertising agency, Found.