By Claire Reilly
SYDNEY, NSW: Small- to medium-sized businesses are feeling the pinch post-GFC, and increasingly feel the need to embrace technology in their day-to-day operations, according to the Sage SME Business Sentiment Index 2011.
The index, released in May by business software company Sage Software Australia, presents information from over 600 business owners, decision makers and experts across various industries – including retail – and gauges sentiment on the post-GFC economy.
According to the index, “Australia's retailers are divided over the state of business performance in 2011 with four in ten (43%) believing their business is performing better compared to last year and three in ten (30%) stating that their business is performing worse.”
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While the index measured business sentiment on the whole, the research also indicated key differences between the opinions of those working in retail and those of the larger business community.
“Retailers were more likely than all businesses to agree that customers have been demanding lower prices for the same product/service, and agree strongly that costs have gone up but revenues haven't by the same margin since the GFC,” according to a Sage spokesperson.
“They were also significantly more likely to see increased competition as a challenge in 2010 compared to all businesses and were more likely than all businesses to have cut back on advertising and promotional spend to save money since the GFC.”
Technology also seems to be a key focus for business. According to the index, 68% of businesses felt that an online presence was “critical to the success of their operation”. However, 40% also believed that creating such a presence would be too expensive or complex.
In terms of challenges for 2011, retailers were almost twice as likely as other businesses to see investment in technology as a key focus.
Commenting on the findings is Alan Osrin, Managing Director of Sage Software Australia.
“Retailers are among the first of the industry sectors to be affected in times of economic uncertainty. Our research clearly identifies that the lingering memory of the GFC coupled with ongoing cautious consumer sentiment continues to take their toll on many retailers.
“However, on a positive note, it is evident that retailers are clearly appreciative of the challenges they face around marketing to new customers in 2011 in order to increase revenues, as well as a clear recognition of the need to focus on technological solutions to help them improve their business’s bottom line,” Osrin said.