UK retailers facing e-commerce divide

Some of Britain's largest retailers, such as Tesco, are e-commerce trailblazers, but smaller firms are failing to implement any e-business strategy at all

Britain's small retail firms are falling behind their larger rivals at taking up and using e-commerce, despite government attempts to encourage UK businesses to get online.

A Department of Trade and Industry (DTI) study published on Monday has found that while some of Britain's largest retailers are world leaders at e-commerce, a majority of smaller commercial firms are failing to use e-commerce methods at all.

As a result, the UK is falling behind other counties in the use of e-commerce in the retail sector, despite the government's aim to make the UK "the world's best place to trade electronically".

The report, titled E-commerce Impact Study: Retail Overview, found that 23 percent of retailers surveyed make no use of e-commerce, defined as "the exchange of information across electronic networks, at any stage in the supply chain, whether within an organisation, between businesses, between businesses and consumers, or between the public and private sector, whether paid or unpaid."

The situation is worse for the smallest business. Over half (56 percent) of micro-retailers, such as corner shops, are failing to use e-commerce at all, according to the survey, which was conducted by PricewaterhouseCoopers.

The report warned that this growing digital divide means that many of Britain's smaller firms are failing to benefit from the advantages of systems such as online payment and ordering systems, and B2B marketplaces.

" is a global e-commerce leader while many of the small independent convenience stores have not yet begun to think about e-commerce," said the report.

In total, around three-quarters of UK retailers are already making some use of e-commerce methods in their businesses. Some 71 percent use external email, and 53 percent already have a Web site.

The government has said that it welcomes the news that some UK companies are leading the way by putting e-commerce at the centre of their commercial thinking, but has admitted that much still needs to be done.

"The UK's retailers are making progress in adopting e-commerce and developing e-business solutions. But there clearly is room for improvement, and we cannot afford to be complacent," said e-commerce minister Stephen Timms in a statement.

Timms added that the government's "UK online for business" initiative, an ongoing attempt to encourage firms to use technology more, will mean companies will use electronic methods more in the future.

"E-business technologies offer a wealth of benefits. In order to exploit these we must help create the right culture throughout the business community so that UK firms of all sizes can seize the competitive advantage. UK online for business is leading the way in getting business online, and the Government's aim to make the UK the best place in the world for e-commerce," Timms said.

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