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Ecommerce retailers expect growth in 2012: report

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UK ecommerce businesses are fair set for growth in 2012, a report out today suggests.

Some 73% of the merchants surveyed for Cybersource’s UK Online Fraud Report 2012 said they expected to see their business grow in 2012. That was only a little lower than the 77% who expected that in 2011. Some 24% expect no change at all.

“There’s little prospect of decline for the UK’s online merchants,” the report said.

But while those who expect growth are forecasting double digit figures, 11% for the travel sector, for example, it is the digital media sector that is looking at the fastest growth. Those who expect to see growth in that sector in 2012 are forecasting a climb in revenue of 33%.

Overall it is the largest businesses have the most conservative forecasts for growth, with companies who turn over more than £25m from online revenue predicting average growth of 18%. Smaller businesses, with turnover of less than £500,000, expect to grow by 35% during the year ahead.

The impact of fraud also varies by sector. Some 51% of travel and 46% of services vendors said revenue loss was their greatest fraud concern. For physical goods retailers the challenge is different: 50% say their greatest concern is inadvertently turning away good orders. For digital goods businesses the main challenge is the cost of manually reviewing too many orders (41%).

Cybersource said that since the 2009 survey, the percentage of merchants using manual review had fallen by 10%. Some 61% of merchants said they manually reviewed orders in 2011. The practice remains most common in small businesses where a fifth of respondents review almost every order. Very large merchants are the most efficient users of manual review, examining only 11% of orders on average.

However, manual review remains inefficient, said Cybersource, since merchants ultimately accept 75% of the orders that they review. “These results suggest merchants should devote increased attention to improving their automated order screening procedures to increase detection accuracy and lower the need for manual review,” it said.

But it was in mobile that the report’s co-author Akif Khan sees most potential for growth. “The mobile channel presents a real opportunity for merchants,” said Khan, director, products and services, CyberSource EMEA. “38% of merchants now have a dedicated mobile website and 26% have their own app. But just a quarter of those merchants are tracking fraud originating on their mobile site and only 16% are tracking fraud through their mobile apps. With interfaces often streamlined to make mobile commerce simpler for the user, the fraud risks on mobile channels are different and still need to be properly understood. If fraud costs are to be managed efficiently across multiple channels in 2012, each should be measured and configured individually.”

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