Online businesses lead with innovation but forget the basics, finds new study
New research has found that UK e-businesses are leading with innovation but neglecting business fundamentals such as data protection and fraud security as they struggle to beat the recession and stay ahead of industry changes.
Results of the third annual Sage Pay E-business Benchmark Report, which surveyed 1,500 online businesses, shows that UK businesses invested more than ever in mobile apps and online technology in 2012 to capture the growth in UK mobile transactions. However, the study found that the investment could be at the expense of measures to protect against fraud and data theft.
Simon Black, CEO of Sage Pay, said: “As the UK e-commerce market continues to mature, the margins between success and failure become even finer. In this year’s report, the differentiators we saw a year ago are now the norm across all retailers. This pressure to stay at the cutting edge is driving UK e-commerce to new levels of sophistication. It’s important the fundamentals such as security and data protection are still at the top of the agenda.”
The report also reveals that businesses are increasingly investing in mobile commerce with 73% optimising their sites for mobile commerce and 22% with mobile apps in 2012. Almost half of all large business respondents (48%) plan to develop mobile apps in the next 12 months with 25% seeing up to 19% of sales coming through from mobile devices.
Never Miss a Retail Update!Black said: “Businesses are starting to see significant growth through mobile – and this is going to increase. We know from our research that building mobile optimised sites will be key for online businesses looking to keep pace with their competition. And with the majority of large businesses boasting an app or planning to build one, this is where the future lies for converting online sales in 2013. Small businesses can look to their larger counterparts for lessons in effective new models of online trading.”
As in 2011, exploring international markets was an important strategy for UK companies last year with 61% of online small businesses and 62% of the larger businesses trading abroad in 2012, up from 57% the year before. Additionally there was a significant increase in trading outside of the EU to countries such as China, where trade increased by 63%.
Black continued: “We’ve seen significant growth in international trading as businesses look to increase their customer base and escape economic concerns at home. Online businesses have also extended sales further afield to countries outside the EU. This type of expansion can only benefit British businesses.”
The report revealed some worrying trends regarding fraud prevention and data privacy with 18% of the large businesses surveyed failing to comply with Payment Card Industry (PCI) regulations and 31% thinking they were unnecessary. In addition, 68% had lost money unnecessarily due to fraud.
For small businesses, 18% did not know if they complied with PCI regulations, and more than half (58%) said they did not understand them in the first place.
Black concluded: “Business simply cannot afford to ignore data protection. This means that consumer data is at risk and businesses face fines and reputational damage if there is a data breach. Fraud also remains a constant concern for consumers as well as businesses and should be high, if not highest on their agenda to address in 2013. The fact that some businesses aren’t aware of whether they are PCI compliant is shocking.”
