British e-businesses are leading with innovation but neglecting business fundamentals in the quest to beat the recession and stay ahead of industry changes, according to the UK’s most comprehensive survey of online businesses. The third annual Sage Pay e-business Benchmark Report reflects insight from over 1,500 small and large online organisations and identifies how UK business growth and online sales will be achieved in 2013.

Mobile optimisation is top of the agenda, with UK business investing more than ever in new apps and technology online to capture the growth in mobile transactions. However, this investment may be at the expense-of the basics such as data protection and fraud security.

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 mobile revolution

The e-Business Benchmark Report reveals that businesses are leveraging mobile commerce with 73% optimising their sites for mobile commerce and 22% boasting mobile apps. 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.

Black said of the mobile trend in the Report; “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.”

Expanding overseas

As in 2011, exploring international markets remains an important strategy for UK companies with 61% of online small businesses and 62% of large ones trading abroad in 2012 – up from 57% the year before. Additionally there has been a significant increase in trading outside of the EU to countries such as China –  this year saw a 63% increase in trade to China (from 19% to 31%).

Black said of the increased expansion overseas;  “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.”

Back to Basics – is the consumer at risk?

Consumer awareness of fraud prevention and data privacy is high on the news agenda – but not on the business agenda.  Worryingly, the Report reveals that 18% of large businesses fail to comply with PCI (Payment Card Industry) regulations and 31% think it’s unnecessary, while on the matter of fraud, 68% have lost money unnecessarily. For small businesses, 18% don’t know if they comply with PCI regulations or not, and more than half (58%) don’t understand it in the first place.  Compliance to PCI standards ensures that consumer card data is secure.

Simon Black said: “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.”

** Sage Pay has defined a small e-business as one conducting fewer than 5,000 transactions per quarter and a large e-business as transacting over 5,000 transactions per quarter.

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