Small businesses which operate online channels earn double the revenue of their offline retail competitors.
A new report from consulting firm Mandala found small and medium businesses (SMBs) that adopted online retail channels earned 2.2 times more revenue and were 45 percent more productive than offline peers.
Mandala Partner Adam Triggs said despite the potential benefits, just 12 percent of all Australians SMBs currently used online retail channels, such as third-party websites, apps or online marketplaces.
Dr Triggs said the report found if SMBs increased their adoption rate of online retail channels from 12 percent to 15 percent, Australia’s GDP would increase by $1.6 billion.
He said the report found:
- Online retail channels boosted productivity, with SMBs utilising online channels 45 percent more productive than those that don’t, generating approximately $86,000 more revenue per worker.
- Online retail channels helped more SMBs to sell to customers overseas. Only two percent of those not using online channels exported overseas, compared with 37 percent for those that did use online channels.
- The average Australian SMB that didn’t use online retail channels generated $1.7 million in revenue, in contrast with SMBs that did use online retail channels which generated 2.2 times more revenue ($3.6 million).
“SMBs represent 66 percent of GDP, so even a small improvement in their productivity has big effects.”
Dr Triggs said a lack of awareness was a big barrier.
“Too many businesses don’t know how these online channels work and what they can deliver for them.
“The same is true for other digital technologies where the biggest barriers are more often than not a lack of awareness and understanding.”
Read the full report: How online retail channels boost Australia’s small and medium businesses
