£20 billion by 2020. That’s the amount which could be injected into the UK economy by SMEs. Despite being a vital part of the economy and making up 99.9 percent of all enterprises, the sector is facing numerous challenges as policies are rarely in their favour. How can these businesses achieve their potential, open new markets and drive growth?
A trillion dollar industry that lacks innovation
In 2015, consumers are expected to spend an average of £1,174 each on online shopping, an increase of 9.6 per cent compared to previous year. In 2012, for the first time, the global eCommerce industry passed the $1 trillion mark in sales, and it hasn’t even reached its peak.
Based on these numbers, it’s safe to assume that a fair amount of money would be spent on developing new and better technologies.
Evidence to the contrary.
In 1994, a company called Amazon set up its online bookstore. Today, 21 years later, we’re still seeing a confusing and lengthy checkout process, poor user experience and (arguably) bad design. All this, despite a global net revenue of $88.99 billion. Similarly, if we take a look at the most trafficked eCommerce websites today compared to 10, or even 15, years ago, not much has changed.
We’re looking at an industry that overall appears to be suffering from lack of innovation and is in desperate need of disruption. That being said, herein lies the opportunity for emerging eCommerce technologies. Along with those comes the chance for SMEs to take control of their own online sales instead of being forced to rely on outdated systems provided by the major players in the market.
The age of SaaS
As opposed to installation based software, SaaS (Software as a Service) companies make their products available to consumers through a browser, normally offered on a subscription basis. With the rise of SaaS in recent years, the UK’s SME market is facing a changing landscape full of new opportunities.
Most SaaS businesses are hosted in the cloud, this means that no setup or installation is needed, costs are low and new functionalities are available instantly without any need to update the service. As a result, commonly recognised barriers to adoption of eCommerce, such as high cost of implementation, lack of time to implement and lack of technical skills, are instantly removed.
By providing businesses with low cost and risk-free solutions, SaaS businesses are slowly pushing out well-established players that only offer installation based products. Instead of worrying about cost of operations and system maintenance, efforts can be shifted onto building and nurturing the relationship with the consumer. In addition, the business can focus on eCommerce itself as a strategic priority rather than the operational challenges that are normally attached to it.
Ultimately, businesses that choose a SaaS product will be presented with enormous opportunities that enable them to access enterprise-class functionality at a fraction of the cost of installation based products. The affordability and flexible commercial terms allow SMEs to invest both their money and time where they should – growing and scaling their business.