Retailers are split into e-haves and have-nots

A digital divide is emerging in the UK retail sector with small businesses generally lagging behind their larger counterparts in...

A digital divide is emerging in the UK retail sector with small businesses generally lagging behind their larger counterparts in the take-up and use of e-commerce, according to a government study published this week.

The report revealed that, while many large retailers are global leaders in the application of e-commerce, nearly a quarter of the 343 retailers surveyed have no e-commerce strategy.

It also found that only 53% of retailers questioned have a Web site of any description.

The report, which was commissioned by the Department of Trade & Industry (DTI) and carried out by professional services firm PricewaterhouseCoopers, found that the digital divide is most evident in the grocery sector. Larger companies such as Tesco have world-leading Web operations, but about 56% of micro firms in the sector have not implemented an e-commerce strategy, it said.

The key barriers hindering the adoption of e-commerce for retailers are investment costs and consumers' need to touch the product before they buy, said the report.

For small retailers in particular, the cost of implementation is a deterrent both in terms of money and the management time required to deal with day-to-day operations, it said.

Other costs - including advertising a new channel to market, maintaining up-to-date content on a Web site, and developing an effective fulfilment infrastructure - can be prohibitive, the report said.

Stephen Timms, e-commerce minister, said while UK retailers are making progress in adopting e-commerce there is clearly room for improvement.

"E-business technologies offer a wealth of benefits," he said. "In order to exploit these we must help to create the right culture throughout the business community so that UK firms can seize the competitive advantage."

To help other retailers learn from the experiences of e-commerce leaders such as Tesco, the DTI is developing a benchmarking tool, which will be available in the autumn, which will enable businesses to evaluate their positions in the market in terms of technology uptake, the DTI said.

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