Blinded by tech, are UK businesses forgetting the basics?

Common sense still not an optional app.

 

The nation’s “bricks and mortar” retailers are beginning to show cracks, with vast numbers looking to set up their stalls online. In fact, the UK retail industry is embracing e-commerce quicker and more successfully than any other Western European countries. But are they missing a trick by deserting the high street?

The UK has indeed taken the lead with innovation and mobile commerce is beginning to kick off: once the smartphone  was invented we had to find a use for it and this is how we started ordering Android-delivered pizza, i-phone delivered pairs of shoes or phone delivered music.

So, whether it’s a country of tech-savvies or a country with too much rain, the mere fact is that no one in Europe has done better in convincing people to shop online.

However, it’s time for the downside. Turning the pages of a couple of reports and chatting with retail, payment and regulatory gurus, it turns out that, in the rush to the web-mirage, UK businesses are forgetting something: “The basics of business”.

This is the conclusion offered by the CEO of a leading payments services provider a few days ago, in front of very full English breakfast.

The very same breakfast that went the wrong way after hearing the staggering number of e-companies, including big players, that are putting security issues linked to customers’ information right at the bottom of the agenda, or just forgetting about it altogether.

Twenty per cent of businesses surveyed by payments company Sage Pay said they are not even sure whether they are compliant or not. They don’t know if they are managing their clients’ data according to the law. Names, addresses, credit card details? Yes, maybe, we don’t really know.

It doesn’t get any more refreshing when it comes to certainties: some 20 per cent know - they are really, really sure - they are not compliant. And another third is convinced it is not important after all, despite the fact that breaches could tarnish the reputation of a business forever.

Even when focusing on the revenue side of the story not everyone seems to get it right.

Take HMV, for example: was it simply the latest high-street retailer to lose out to the power of the web and of new technologies? The truth is that the music store had been on the web for many years before being forced to go into administration.

It did jump on the right tool, but kept a bricks and mortar mentality. When shopping on the web, instead, the same clients become different clients, with speed being the first commandment. When the structure is big and heavy the jump has proved to be more risky.

What should the rules be then? The recipe for success can only come from finding where failure hides.

It’s best to start with the toughest moment of the shopping experience: paying. The majority of customers who visit the website drop out after landing on the payment page, namely after having shown the clear intention of wanting to buy the goods.

Why? Read the data and you’ll get the answer: the longer it takes to pay and the greater number of payment pages you’ve got, the greater the probability the client will get tired and leave. Some websites use up to four pages: worse than queuing ten minutes at Costa.

There are some ego-problems as well: many small merchants think it’s a smart idea to personalise the payment page with their brand. However, if your logo makes your aunty look famous, it will be difficult to convince the customer he can safely give out his data. Better leave the job of reassuring the client to the payments brands. Visa, MasterCard or PayPal inspire more trust than a beloved but unknown aunty Grace, after all.

It doesn’t end here: surprisingly, many small and medium merchants are not taking advantage of social networks. Figures show they work more than the pay-per-click strategy to drive traffic but not enough businesses have an embedded payment feature in the payment page. On the opposite side, a good number of them haven’t got a Facebook page at all.

The moral is ready to be home delivered: new technologies are there, but the human brain and a fine instinct are not an optional app. Business is – and will remain – business.

Don't forget the high street. Photograph: Getty Images

Sara Perria is the Assistant Editor for Banking and Payments, VRL Financial News

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Why Angela Merkel's comments about the UK and US shouldn't be given too much weight

The Chancellor's comments are aimed at a domestic and European audience, and she won't be abandoning Anglo-German relationships just yet.

Angela Merkel’s latest remarks do not seem well-judged but should not be given undue significance. Speaking as part of a rally in Munich for her sister party, the CSU, the German Chancellor claimed “we Europeans must really take our own fate into our hands”.

The comments should be read in the context of September's German elections and Merkel’s determination to restrain the fortune of her main political rival, Martin Schulz – obviously a strong Europhile and a committed Trump critic. Sigmar Gabriel - previously seen as a candidate to lead the left-wing SPD - has for some time been pressing for Germany and Europe to have “enough self-confidence” to stand up to Trump. He called for a “self-confident position, not just on behalf of us Germans but all Europeans”. Merkel is in part responding to this pressure.

Her words were well received by her audience. The beer hall crowd erupted into sustained applause. But taking an implicit pop at Donald Trump is hardly likely to be a divisive tactic at such a gathering. Criticising the UK post-Brexit and the US under Trump is the sort of virtue signalling guaranteed to ensure a good clap.

It’s not clear that the comments represent that much of a new departure, as she herself has since claimed. She said something similar earlier this year. In January, after the publication of Donald Trump’s interview with The Times and Bild, she said that “we Europeans have our fate in our own hands”.

At one level what Merkel said is something of a truism: in two year’s time Britain will no longer be directly deciding the fate of the EU. In future no British Prime Minister will attend the European Council, and British MEPs will leave the Parliament at the next round of European elections in 2019. Yet Merkel’s words “we Europeans”, conflate Europe and the EU, something she has previously rejected. Back in July last year, at a joint press conference with Theresa May, she said: “the UK after all remains part of Europe, if not of the Union”.

At the same press conference, Merkel also confirmed that the EU and the UK would need to continue to work together. At that time she even used the first person plural to include Britain, saying “we have certain missions also to fulfil with the rest of the world” – there the ‘we’ meant Britain and the EU, now the 'we' excludes Britain.

Her comments surely also mark a frustration born of difficulties at the G7 summit over climate change, but Britain and Germany agreed at the meeting in Sicily on the Paris Accord. More broadly, the next few months will be crucial for determining the future relationship between Britain and the EU. There will be many difficult negotiations ahead.

Merkel is widely expected to remain the German Chancellor after this autumn’s election. As the single most powerful individual in the EU27, she is the most crucial person in determining future relations between the UK and the EU. Indeed, to some extent, it was her intransigence during Cameron’s ‘renegotiation’ which precipitated Brexit itself. She also needs to watch with care growing irritation across the EU at the (perceived) extent of German influence and control over the institutions and direction of the European project. Recent reports in the Frankfurter Allgemeine Zeitung which suggested a Merkel plan for Jens Weidmann of the Bundesbank to succeed Mario Draghi at the ECB have not gone down well across southern Europe. For those critics, the hands controlling the fate of Europe are Merkel’s.

Brexit remains a crucial challenge for the EU. How the issue is handled will shape the future of the Union. Many across Europe’s capitals are worried that Brussels risks driving Britain further away than Brexit will require; they are worried lest the Channel becomes metaphorically wider and Britain turns its back on the continent. On the UK side, Theresa May has accepted the EU, and particularly Merkel’s, insistence, that there can be no cherry picking, and therefore she has committed to leaving the single market as well as the EU. May has offered a “deep and special” partnership and a comprehensive free trading arrangement. Merkel should welcome Britain’s clarity. She must work with new French President Emmanuel Macron and others to lead the EU towards a new relationship with Britain – a close partnership which protects free trade, security and the other forms of cooperation which benefit all Europeans.

Henry Newman is the director of Open Europe. He tweets @henrynewman.

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