Insights

How SMEs can benefit from online spending decimating the retail sector

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Every week brings more news of failing businesses in the retail sector, whether through bankruptcy, or going into administration. It is easy to understand why, even if it has taken 17 years from the spectacular overestimation of online purchasing adoption that led to the “dot com” crash in 2001.

The fact of the matter is that buying online is better for (almost) everything. It is more convenient, quicker, cheaper, has infinitely more choice, and you can do it anywhere on the planet. Perhaps best of all, we have learned to trust the suppliers to deliver on time and include an excellent and convenient returns service.

This stampede to online purchasing is only going to increase and the future looks bleak for the retailers.

Their problem is that the retailer is the last step in the supply chain. Their costs are considerable in bricks and mortar and must be reflected in their mark up of their supplier’s costs to deliver a profit. From our perspective, it is just a premium price over an online supplier. How many of us have visited the retailer to make our selection (it is always nice to see some things before you buy), then bought the same thing cheaper online?

For wholesales and manufacturers that are still reliant on their retailers for sales, their online competitors are now an ever-increasing threat and services like Amazon for Business simply increases that risk.

The House of Commons Briefing Document (27 December 2017) shows that the SME represents 5.7million businesses, (over 99.9% of all business in the UK), accounts for 60% of all employment and 52% of turnover.

Wholesalers and manufacturers are proactively looking for new ways to access this huge SME market, as whilst these are smaller businesses with low levels of spend, the potential prize is still huge if it can be accessed in a cost-effective manner. As important, online purchasing has already delivered a cost-effective distribution capability for the domestic market – which can easily be leveraged for the commercial sector.

For SME businesses, we have always been limited in the pricing we can achieve, as it is reflected in the amount we individually spend, our knowledge of best procurement practices and our ability to get everyone in the business to then use a preferred supplier at the agreed pricing to achieve the savings available.

Technology has changed this dynamic and with it, reduces the prices of an ever-increasing range of products and services.

By delivering online direct access to the wholesalers and manufactures though cloud “Punch Out” purchasing automation software, Compleat, working with our partners Auditel, can now deliver between 10% - 20% savings on an ever-increasing range of existing spend, allowing our customers to save money on items they already buy, irrespective of their size.

For larger organisations, the savings can be as much as 57% - representing over £100k per annum and a 10 x ROI on the cost of purchasing automation.

The SME can now enjoy pricing levels of far larger competitors and that is a game changer.

Visit us at www.compleatsoftware.com, or speak to us in person at stand 460 at Accountex to find out more.