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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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.