A new study has highlighted the importance of embracing e-commerce for UK firms, and alluded to the benefits of reliable web hosting. Research commissioned by search engine provider Google indicates that online business is worth £100 billion per year to the UK economy. This accounts for 7.2 per cent of gross domestic product, a figure which is set to increase to ten per cent by 2015, the report found.
If it were an industry in its own right, the internet would be more than twice as large as the UK hotel and restaurant market and nearly as big as the financial services sector, which accounted for 9% of GDP in 2009, the study says.
The country has the biggest e-commerce market in the world when measured by the amount spent per capita, BCG found. The popularity of shopping for goods and services online has also helped to fuel a boom in online advertising as companies spend heavily to attract users to their sites.
Britain has the biggest online advertising market anywhere outside the US. It is worth around 3.5bn a year.
The internet economy is likely to grow by 10% a year for the next five years and could contribute up to 13% of GDP a year by 2015, the report`s authors conclude. It is already larger than the utility and transport industries combined.
That growth will depend in large part on whether targets for broadband penetration are met, however. The government has said it wants everyone to have internet access at a speed that would allow users to download video content by 2015.
A total of 31 million people were found to have purchased goods online during the last years – 62 per cent of all adults living in Britain. With this in mind, companies may be shooting themselves in the foot by failing to offer secure and stable online shopping opportunities.
And that is what is happening too.
In a trial study conducted by the DMA, researchers posing as prospective customers requested catalogues or brochures via the websites of 200 UK-based companies covering a variety of sectors. A dismal 19 per cent of retail and service industry companies contacted made no response to a request for information.
Companies were also evaluated on their acknowledgement, use of personalisation and presentation. Of those companies that responded, just 38.5 per cent sent an email acknowledgement and only 53 per cent sent a personalised response. Many were also guilty of sending duplicate response packs, incorrect address details and poor presentation.
The automotive and home sectors recorded the best response rates while hobbies, pets, sports and transport sectors comprised the largest number of non-respondent companies. Virgin Holidays, Voyages of Discovery, Honda Lawn & Garden and several automotive brands including Mercedes Benz, Mitsubishi and Skoda came out on top, responding within one day with a personalised response. Other brands such as Vauxhall, Laura Ashley and Everest Windows fared less well, taking over a week to respond or not responding at all.
Sally Hollis, chair of the DMA Response Management Council, commented:
“While the UK online economy may be booming, the findings should be a warning to business as more and more shoppers are using both the web and catalogues to purchase goods – with this increasing by about 60 per cent in the run up to Christmas. The internet offers consumers a massive choice and they are quick to move on if they don’t get a prompt response. It’s a proven fact that a fast personalised reply will result in more sales – businesses need to buck up their ideas by going back to basics and focus on offering good customer service.”