£459.2 billion is the UK Office of National Statistics’ most recent estimate on the size of ecommerce just in the UK. With Scotland having 8.2% of the UK population then, if ecommerce is performing at the same level as the rest of the UK then we might reasonably expect Scottish ecommerce turnover to be £37.65 billion.

At the latest Ecommerce Scotland 2024 event, where most of Scotland’s ecommerce shakers and movers congregated, the potential of this didn’t come as a surprise. The majority of companies were seeing steady growth in line with ONS data which shows incremental month by month increases along with seasonal variations.

Internationally, the UK is an ecommerce powerhouse that’s out-performed only by China and the US in the total volume of goods sold online. UK ecommerce is approximately the same size as ecommerce in France and Germany combined. The average UK online buyer purchases around twice as much as people in the US.

According to these ONS numbers, ecommerce is huge and growing. Importantly, it does so in a steady and predictable fashion. The industry is, by a very significant margin, commercially larger than any other activity or area of interest within the digital ‘sector’.

Across almost every product category, customers are shifting their buying behaviour online whether the purchases are to retail consumers, wholesalers or even those in large organisation procurement. A high proportion of SMEs, which represent 99.3% of all Scottish companies, could and should be using ecommerce to grow and scale their business.

Iain Barbour, of garden suppliers Jamieson Brothers in the Scottish Borders, has seen trade grow rapidly this way, harnessing the power of online as well as tools like automation. “Taking our B2B and B2C business direct to people’s homes either via their PC or mobile device has been a real game changer instead of relying on footfall through the doors. Investing in systems that allow us to automate tasks that used to be manual human chores has been key to our scalability. We can now not imagine our business not being online.”

Meanwhile, Scottish entrepreneur Jamie Macdonough, founder of hair product company Bold Uniq, has been able to create seven-figure sales selling beauty and lifestyle products—particularly into the US market—and not least by leveraging innovative technologies. “Our use of tools that make use of AI and machine learning have been key to our rapid growth, high productivity and scaling. Automating every part of the business should be a key obsession for every ecommerce business owner.”

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One thing particularly noticeable at the recent Ecommerce Scotland event was that all attendees were using variations around the same technology and tools. They were all using similar standard operating procedures and similar ecommerce marketing channels. Everyone shared the same language and acronyms and every ecommerce team was heavily engaged with the rapid adoption of artificial intelligence and machine learning. Many of those attending talked about their ambitious targets around productivity where several were already achieving turnovers in excess of a million pounds per employee in parallel with decreasing their carbon footprint through the use of recycled packaging and all-electric fulfilment.

A unifying feature for those involved in ecommerce has been their shared use of common tools such as their ecommerce platforms. Common examples include Shopify, Magento and BigCommerce. These platforms are the hub for the online business. As well as selling directly, they typically connect directly to marketplaces such as Amazon or eBay. They allow businesses to show what products are available to customers along with prices, stock-levels, imagery, product reviews and fulfilment options. AI & ML are used extensively to optimise pricing and product targeting, cross-selling and up-selling as well as personalisation and optimising around seasonality. They commonly connect to accounts packages and integrate with warehouses, fulfilment partners and CRM/ERP packages. They manage B2C and B2B sales both locally as well as using translated content for overseas markets.

At the Ecommerce Scotland event we collected anonymised data on different ecommerce platforms and plotted turnover versus productivity (measured as turnover per employee) for attending businesses. We found that:

• Shopify was the most popular platform for small or micro businesses. It is worth noting that it can still be used effectively for some much larger businesses where business integration complexity requirements are low.
• By a significant margin, the largest turnover was from Magento/Adobe Commerce websites.
• Magento showed a wide range of associated productivity levels suggesting that the platform requires higher levels of skill to get the most from it.

Given that Magento was repeatedly associated with high turnover businesses we looked to see how many businesses are making use of Magento in Scotland compared to other parts of the UK.

According to StoreLeads.app, the total number of Magento sites in Scotland is 134. The same tool, applying the same calculations and methodology, was able to identify 3,413 Magento sites in England. This aligns with Magento search figures in different parts of the UK. Together, these figures contribute circumstantial evidence that Scotland has a proportionately lower level of ecommerce activity when compared to, for example, England.

A high proportion of SMEs, which represent 99.3% of all Scottish companies, could and should be using ecommerce to grow and scale their business. The Scottish government’s most recent survey shows that 61% of companies are not selling online while those that are are mostly selling in low volumes. A small percentage change with these numbers would have transformational consequences for the economic performance of our nation.

The ecommerce business community is keen to engage with those helping shape our national economy and would welcome the opportunity to work with those wanting to see a wealth-creating, sustainable, high-productivity, inclusive, and socially aware future for our nation. A few zero-cost or low-cost ways that government and public sector agencies could quickly facilitate this would be to support local community opportunities which help to network, inform, educate, and inspire growing ecommerce businesses in Scotland.

The Scottish government should also press the UK Office of National Statistics to provide a breakdown of ecommerce performance in different parts of the UK. Such information is currently not available. Scotland helps pay for the ONS so getting access to such information would help us set targets and measure improvement in what should be a significant part of our national economy.