Neil Francis, Interim Managing Director, Scottish Enterprise
As 2020 draws to a close, it’s a year that none of us will ever forget.
Due to the impact of COVID-19, the norms we previously associated with everyday life have changed. This has been particularly evident in the world of business, where many companies have had to introduce new ways of trading with customers.
This has resulted in strong growth in e-commerce, with companies turning their attention to digital channels to help them sell their products.
As firms have adapted to the changing business landscape, e-commerce has shifted from a ‘nice to have’ to a ‘must have’ for companies to survive and thrive in a post COVID-19 world.
That’s why as part of our trade recovery plan to aid businesses impacted by this global pandemic, Scottish Enterprise has placed digital activity at its very heart.
The rapid growth of e-commerce and online sales channels mean the benefits of ‘going digital’ have never been greater. Scottish Enterprise and our partners want to support businesses to take advantage of these opportunities.
And here’s how we are doing this.
As part of our focused efforts to support businesses, strong emphasis is being placed on assisting companies develop their digital and e-commerce capabilities to help them trade in new ways.
Alongside this, we are enhancing our suite of existing digital services and redesigning these to ensure companies can access them as smoothly as possible.
Our team of digital trade experts is advising businesses on choosing the right e-commerce approach for their company and making sure online activity complements and supports existing sales channels.
For many companies, a Direct to Consumer (D2C) approach to e-commerce is proving to be the most effective way of achieving online sales ambitions. This involves a direct transaction between product owners or manufacturers and buyers.
D2C allows companies to bypass the traditional middlemen such as agents, distributors, stockists and retailers, giving firms direct access to customers online.
Given that most retailers now have both online and offline channels, many companies, particularly those who sell their products primarily through 3rd party retailers, have already achieved some success online.
However, we are increasingly seeing companies wanting to take greater control of their online activity by introducing a direct to consumer approach to e-commerce. For example, in the United States an estimated 48% of manufacturers are currently planning to establish a D2C channel.
The alternative D2C approach is for companies selling products through an emarketplace and it’s fair to say that the rise of these online platforms has been a game changer.
Amazon, eBay, AliExpress and other global emarketplaces make it possible for companies of any size, from new starts to multinationals, to sell directly to their customers on a global basis. Online retail sales reached $4.9 trillion in 2020, and this is a trend that looks set to continue in the future with growth estimated at 40% throughout the next three years.
The record performance of emarketplaces during the pandemic demonstrate that an increasing number of consumers are turning to ecommerce platforms to meet their needs.
And it has been encouraging for us to see so many companies across Scotland embracing this trend. From breweries selling online for the first time, to agricultural firms introducing online livestock auctions, more and more businesses are looking for ways to develop their ecommerce capability.
An excellent example we’ve been proud to highlight on our website involves the agricultural company, ANM Group, based near Inverurie in Aberdeenshire.
Recognising the challenges that social distancing would bring, ANM Group embraced e-commerce, allowing it to take its expertise in the live auction ring and apply it online. Not only did this help the company reach customers adversely affected by COVID-19, it opened up new markets and opportunities for this innovative firm.
Throughout the past nine months, Scottish Enterprise has been hosting online events to support companies on their e-commerce journey. Whether this has been webinars about e-commerce opportunities in the United States and China or providing guidance to businesses about selling on Amazon’s global marketplace, these virtual engagements have proven to be very popular.
Further webinars are planned for the new year and these will be advertised on the e-commerce section of our website, which provides comprehensive advice and guidance for companies looking to do business online.
Scottish Enterprise’s website, alongside the multiagency PrepareforBrexit portal, provides advice, access to sources of financial support and online assessment for companies ahead of the EU transition period ending at the start of January. This includes guidance for businesses who trade online.
So, there has not been a more challenging year for businesses than 2020. Next year will likely bring more hurdles for firms to overcome. But if there’s one positive that can be taken, it’s the emerging opportunities that e-commerce can provide to companies across Scotland.
The perseverance and innovation of companies over the past nine months has been inspiring. So many businesses have focused on what’s possible, rather than what’s impossible. Scottish Enterprise stands ready to support Scottish firms and turn their digital ambitions into reality.