October 26, 2021
DCI Survey Contradicts Conventional Wisdom, Finds SMBs Use Multiple Sales Methods in Modern Retail
Oct. 25, 2021, WASHINGTON – The Data Catalyst Institute (DCI) published Super Selling, new survey research on small business retail and the remarkable diversity of ways that small and medium-size sellers (SMB Sellers) sell products and connect with customers. Sellers today can not be put into simple categories such as selling online-only, through brick and mortar, in suburban malls, or based downtown.
The survey of 2,000 U.S. small business owners and senior leaders demonstrates the fluidity and flexibility of modern retail, where the typical SMB seller uses an average of five sales methods supported by low-cost, efficient digital tools and platforms. The data shows the robust competition between and within retail channels for the allegiance, commitment, and investment of SMB Sellers.
“Small business retail is not a competition between online and offline or between downtowns and suburbs; it is all of the above. Small businesses need to and are eager to do it all, as demonstrated by their average use of five sales methods and their embrace of multiple platforms and channels within each method,” said DCI Editor-in-Chief Dr. Mark Drapeau.
The survey’s major findings include:
- Small business sellers have many methods of reaching consumers to choose from: online and offline, wholesale and retail, online marketplaces, and direct-to-consumer sales. The evolution of traditional retail alongside the growth of digital selling has created an infinite variety of options and aggressive competition for sellers’ attention, investment, and allegiance.
- The typical SMB Seller today uses five (5) different methods of selling products to consumers. The four most popular ones include both traditional and modern sales methods. They are: “brick and mortar” physical retail stores (79% of SMBs use), wholesaling (78%), 3rd-party online marketplaces (68%), and a seller’s owned and operated web store (68%). On average, 72% of SMB revenue is driven by these four sales methods.
- Within sales methods, SMB sellers also frequently use more than one competitive vendor. Taking online marketplaces as an example, a whopping 87% of SMB sellers on Amazon’s online marketplace also sell on at least one other online marketplace, including 54% selling on Walmart’s marketplace and 50% selling on eBay.
- SMB Sellers that use more methods are also far more optimistic about their businesses’ future. They project higher revenue this year vs. last year and are more likely to believe their industry and the U.S. economy are in good or excellent shape.
“There are lessons in this survey for small businesses, local economic development leaders, and national policymakers. Our research should spur local governments to support both digital skills training and downtown retail incentives for small businesses, and should motivate small businesses to continue exploring new sales options because there are limitless opportunities that will help grow their business,” added Dr. Drapeau.
To view the report, click here.