Sendle: More can be done to make Australia’s postal and parcel delivery industry open and competitive

Sendle: More can be done to make Australia’s postal and parcel delivery industry open and competitive

The 2023 Sendle Small Business survey reveals small businesses are divided on sales growth this peak sales season, with customer acquisition the top challenge in 2024

In the face of persistent inflation and recent rate rises, two thirds of small businesses are worried about their sales performance this peak sales season, with 30% of small businesses forecasting zero growth compared to the same period last year, a new survey from Sendle reveals.

The “2023 Small Business Survey” from Australia’s first 100% carbon neutral parcel delivery service Sendle surveyed over 1300 small businesses across Australia, on their attitudes and expectations for the upcoming sales periods and the new year ahead. The survey reveals a year-on-year dip in small business confidence, with 34% of small businesses confident about their peak sales growth this year, compared to 42% in 2022.

Sendle’s 2023 Small Business Survey shows that many small businesses are feeling less confident about consumer demand this peak sales season, due to the impact of recent rate rises and cost of living pressures,” said Laura Hill, Managing Director of Sendle Australia. “However, small businesses are more optimistic about growth in 2024, most likely as they’re taking a number of proactive steps to attract new customers.”

Retail, secondhand and gifting categories to perform best, but not all are convinced

The impact of inflation and recent rate rises on household consumption is top of mind for small businesses,  with over half (52%) worried about slowing consumer spending due to cost of living pressures this peak sales season. Interestingly, they are more concerned about the financial squeeze on customers than their own businesses, with only 11% saying they are worried about the higher costs of doing business this peak season.

When forecasting business performance this upcoming Black Friday / Cyber Monday / Christmas sales period, 36% of small businesses are expecting significant sales growth, with 14% expecting between 50-65% growth. Small businesses in the key gifting product categories such as clothing and footwear, secondhand and vintage items, and toys, hobbies and games are most likely to forecast strong sales growth.

Interestingly, small businesses in the clothing and footwear and secondhand and vintage items categories are also most likely to forecast zero to no sales growth this peak season season, along with books and publishing. Even in the same category, demand levels vary, which could indicate continued uncertainty regarding consumer demand, or the influence of other factors such as ability to offer sales discounts.

Customer acquisition top challenge in 2024, as small businesses look overseas for growth

Persistent inflation is on the horizon for small businesses, with 62% expecting inflation to have a mild impact on their bottom line in 2024. Additionally, over a quarter (28%) anticipate a high inflation environment will have a significant impact on their business. Only 11% believe inflation will have little to no impact.

Looking ahead to 2024, customer acquisition is the number one concern for small businesses, with two thirds (66%) feeling anxious about bringing in new customers in the new year. This is a sizable jump from 2022, where only 22% of small businesses named customer acquisition as their top challenge. Managing cost pressures (53%) and keeping the business competitive (38%) were the other top challenges reported.

Despite a challenging economic outlook, the majority (84%) of small businesses are forecasting online sales growth over the next 12 months, with 36% forecasting up to 25% sales growth. The challenge of finding new customers and a weaker Australian dollar could explain why more are looking overseas for growth, with 37% expecting up to a quarter of their total sales growth to come from outside Australia over the next 12 months.

To grow the business in 2024, small businesses plan to take a number of proactive measures. Many small businesses are looking to level up their social and marketing capabilities, with 61% planning to grow their social media presence and engagement in 2024. Additionally, 39% plan to invest in more marketing and brand awareness initiatives, to help them engage new customers and convert them into sales.

Other proactive steps include updating their pricing strategy to reflect the rising cost of living (41%), expanding into new markets including overseas (37%) and increasing shipping options for customers (23%). Despite increasing cash flow pressures, 69% of small businesses rank sustainability as a high or somewhat of a priority in 2024, and are looking at ways to be more sustainable through their practices and suppliers.

 Small businesses want to see greater competition and government intervention in 2024

Over the last 12 months, Australia Post has hiked up the price of its parcel and package delivery services, which has prompted a number of small businesses to take action. Over the last 12 months, 60% of small businesses have moved 50-100% of their shipping volumes to Sendle to Australia Post price increases. Almost half (49%) of small businesses are using multiple shipping carriers in order to get the best price.

When it comes to the postal and parcel delivery industry in Australia, the majority (84%) of small businesses surveyed want to see greater competition and access to low cost carriers / shippers. In fact, over a third (35%) believe more government intervention and regulation is needed to help drive down prices.

“Small businesses are remarkably resourceful and resilient. But their bottom line is being increasingly squeezed by inflationary pressures and parcel price hikes by Australia Post. While it’s encouraging to see more small businesses shipping around for better rates, more can be done to make Australia’s postal and parcel delivery industry open and competitive, so it delivers choice and ultimately drives down costs for small businesses. Our survey reveals this is what small businesses want to see in 2024,” concluded Laura.

For more information about Sendle’s 2023 Small Business Survey, please visit:

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