The annual tracker study by Royal Mail suggests growing confidence among online retailers this year with as many as 8 in 10 online retailing SMEs expecting an increase in business in 2016, up from 7 in 10 last year.

2015 was a good year for many e-tailers, with 74% seeing significant increases in business last year. This is the highest growth in three years, with 58% seeing increased sales in 2014 and 49% in 2013.

The study suggests that delivery companies improving their service to online retailers and their customers have played a significant role in improving e-commerce in the UK over the last year. Delivery companies are increasing capacity as well as maturing in the range of services they are offering their clients. A statement from Royal Mail said, “The most common factor in driving customer satisfaction is on-time delivery, voted by two thirds (66%) of SME e-retailers. This is more than the number of SME e-retailers who consider the quality of products (62%) and the price of goods (57%) as key drivers of customer satisfaction.

A good returns process is core to customer satisfaction, and this is reflected in the study. 49% of companies surveyed felt that this would improve customer’s satisfaction with their service, while 45% felt that this would lead to repeat customers.

Managing Director of Royal Mail Parcels Nick Landon said of the survey, “Technology is influencing how people shop, where they shop and what they define as an excellent shopping experience. Our research shows that SME online retailers are plugged in to the needs of the shopper and they are taking actions to enable them to meet the demands of the discerning online consumer.”

Smartphone shopping is set to be the big growth area this year, with 47% feeling that an app could improve business in 2016. Competition is set to increase in the online marketplace and this could be have an impact on sales in the coming months.