British businesses embracing e-commerce and mobile

30 November 2015

Digital commerce channels are increasing in importance, a study of UK B2C and B2B businesses finds. Digital channels now account for 41% of luxury revenues, while for retail the channels account for 26% of income. Mobile-commerce is too taking off, with luxury again at the forefront of the development. Reaping full benefits remain a challenge however, with integrating e-commerce into traditional sales channels, handling customer service and managing distribution of products when selling to customers cited as the key execution barriers.

Digital commerce, performed through the digital channels of desktop, mobile and social, has become one of the most important businesses channels for enterprises in the UK and globally. A recent study by Capgemini for instance highlights that in 2014 nearly a quarter of sales was realised through online channels.

In a bid to find out how e-commerce, as well as m-commerce, are affecting the business landscape, Salmon, a global digital commerce consultancy, commissioned research agency Vanson Bourne to survey 150 e-commerce decision-makers from UK-based organisations with employee numbers upwards of 500. The report, titled ‘British Business in the Digital Age’, reveals where different industries currently stand in terms of digitalisation, and where they are headed. The sectors involved in the study include B2B players, manufacturing and wholesale, and B2C players, grocery-retail, retail, and luxury-retail.

Importance of digital commerce to British business

Digital importance
The study explores in how far the respondents rate the importance of digital technologies, today and in 2025. The research found that on average 73% of respondents believe that digital commerce is important within their industry. The results are particularly high in the retail sector, in which 87% agree, and the luxury retail sector, where 100% agree. The wholesale sector on the contrary, lags with only 33% of the respondents agreeing.

In terms of the trend to 2025, all industries expect e-commerce to become more important. Within manufacturing, digital commerce importance increases from 76% today to 100% in 2025, while grocery increases to 94% from 76%. Even the low scoring wholesale sector will see a 20% increase to 53%.

Percentage of total revenue attributed to digital channels

Increasing revenue
As it stands, the average revenue generated through digital channels equates to 19% across the industries surveyed. B2C leads the pack in 2015, with 41% of revenues generated in luxury sales coming through the channels, while retail generates 26% of its sales through the channels. In the B2B sector, industry reaps a smaller 17% of total revenue, while wholesale generates 6% of revenue through e-commerce, m-commerce and social.

In the coming decade, all industries surveyed expect revenue growth through digital channels. By 2025 the majority of luxury sales (60%) are projected to be through digital channels, while retail will see 40% of its sales through the channels. Industry is expected to see its total revenues through digital channels increase to 25%, while wholesale will see a modest rise to 13%.

Top 3 benefits of an mcommerce strategy

Mobile-commerce has also become more important as more than 35 million people in the UK are now active on smartphones. As a result of changes in consumer behaviour, companies have been quick to develop digital strategies the encompass m-commerce. Almost half of respondents (49%) already have an m-commerce strategy in place either operating a mobile-optimised website and/or a mobile app. Luxury again leads the pack, with a 96% adoption of mobile as a sales channel, while wholesale lags behind, with only 10% of business citing a mobile friendly offering.

The benefits of the channel are agreed on by 89% of those surveyed; the biggest benefit is the ability to get closer to their customers (69%), both in terms of data collected as well as targeting them more accurately.

Who has ultimate responsibility for digital commerce

Whilst the level of digital readiness is strong across businesses, there is still a conflicting view as to what department should be tasked with driving e-commerce growth. Currently, 33% of e-commerce business is led by a dedicated team (with that number rising to 56% for retail-luxury), and a further 33% is managed by the marketing department. Organisational readiness is lowest in the wholesale sector, which is lagging behind its peers, with no department taking responsibility for one third of businesses in this sector.

Challenges in implementing an ecommerce strategy

Major barriers
The survey further explores the major barriers that respondents see in the development of e-commerce for their business. Across all sectors, the most common challenges were found to be the integration of e-commerce with traditional sales channels (41%), handling customer service (37%) and managing distribution of products when selling to customers (35%). Integration was cited as a problem, because of the difficulty in connecting different technology with other software and databases. Further issues include customer concerns about data security 33% and a lack of internal knowledge/skills about e-commerce 33%.

In terms of the different responses from different industries, the survey highlights differences in concerns. B2B businesses, manufacturing and wholesale, find that the largest issue is the lack of board/senior management buy-in at 44% and 46% respectively. For grocery-retail, the biggest challenge is product distribution (47%), while retail cites competition with pure-plays such as Amazon (50%). The luxury-retail industry views handling customer service, at 58%, as its greatest challenge.

Top 3 challenges in implementing an mcommerce strategy

From an m-commerce perspective the key challenges stem from growing the mobile channel into a central sales channel, cited by 67% of respondents. Further challenges indicated include integrating mobile with other sales channels (23%), lack of in-house knowledge (19%) and lack of interest or investment from the board (18%).


Grant Thornton advises on deal for high-growth cloud hosting firm

08 April 2019

Grant Thornton’s North West Corporate Finance team has completed its first TMT deal of 2019. The professional services firm advised the shareholders of Hosted Desktop UK on their investment from specialist SME lender Beechbrook Capital.

Technological disruption and changing consumer behaviour have continued to affect top Technology, Media & Telecommunications (TMT) players in recent years. The industry has seen revenues border on stagnation over the past decade, at 0.4% annual growth since 2008. While the industry is keen to develop new digital services and models to meet market challenges, they face a range of barriers – meaning the recruiting of talent specialising in innovative software and technology has become a key goal for the industry.

Amid this, Hosted Desktop UK (HDUK) provides cloud computing services to small and medium sized businesses across the UK. The firm’s cloud solutions provide businesses with IT reliability, flexibility, value for money and business continuity. As the firm bids to grow in the UK, with demand for its disruptive technologies high, HDUK has secured a key investment from specialist SME lender Beechbrook Capital.

Grant Thornton advises on deal for high-growth cloud hosting firm

The transaction was Beechbrook Capital’s maiden deal from its latest UK SME credit fund, which supports small and medium-sized businesses in the UK with EBITDA of £1 million and above. Manchester law firms Pannone Corporate (sell-side advice, led by Mark Winthorpe) and DWF LLP (buy-side advice, led by Jonathan Robinson) also advised on the deal, while Grant Thornton’s North West Corporate Finance team advised HDUK’s shareholders.

The deal represents the Grant Thornton branch’s first TMT deal of 2019, with a team comprised of Partner and Head of Corporate Finance Peter Terry, Manager Daniel Brecker and Assistant Manager Cariad Mudford advising HDUK shareholders on the investment. It is the third key deal in the TMT sector that the GT North team has advised on in the last 18 months, following the £16.5 million sale of Salford-based Sonassi to Iomart in December 2017 and NorthEdge Capital’s investment in Yorkshire company iPortalis in August 2018.

Grant Thornton’s Peter Terry said of the news, “As our domestic and working lives become ever-more technology dependent, it’s no surprise that there continues to be strong investor interest in any asset in the cloud computing, data infrastructure and connectivity space… We were pleased to work with Beechbrook Capital on the first deal in its new fund. It shows that despite the well-documented uncertainties in the economy there are still good funding options for dynamic SMEs and their management teams.”