Competing online is enabling small businesses to outmanoeuvre larger players, according to new research.

Despite the huge sums large companies spend developing and optimising their websites, online consumers prefer smaller businesses. In a series of blind focus groups, more than 200 consumers were asked to compare websites of smaller and larger competitor firms, without knowing which was the bigger enterprise.

More respondents chose the smaller firm as their preferred supplier in almost two thirds of focus groups. The larger player won out in only a fifth of experiments, according to the study by from Yell Group plc (LON:YELL) and the University of Southampton.

Even when votes were calculated on an individual participant basis, 51% chose the smaller business, compared to only a third who opted for the larger firm.

Scale

The experiment demonstrates how the online space has blurred perceptions of company size and made scale unimportant to consumers. When asked which they thought was the larger concern, almost two fifths of participants (37%) were unable to tell.

In addition, only a quarter of consumers (25%) rated company size as an important influence when looking for products and services.

Trust

The research also evaluated what makes consumers trust potential suppliers online, finding that authenticity, simplicity and proximity are the traits that win consumers’ confidence.

Authenticity: When looking online for a supplier, the vast majority of consumers look for a sense of the people behind the business (71%). A prominently displayed address or location (78%) and phone number (77%) are also highly important influencers, as customers seek reassurance of an authentic, human presence behind the business.

Simplicity: Even more (81%) cite easy-to-find information as very important to making a purchasing decision. Easy-to-read descriptions (75%) and a simple approach (66%) also scored highly.

Proximity: Close to half of consumers (43%) place high importance on a business being local to them.

Richard Hanscott comments: "The factors driving consumers’ online behaviour offer a unique advantage to SMEs over their larger competitors. Customers are influenced by trust in the company, ease of access to information and locality.

"This presents a clear opportunity for smaller firms to give themselves a competitive edge via their online presence, by presenting the human face of the business and promoting their ability to deliver a more personal service."