In a post on the British Retail Consortium’s (BRC) website, it detailed how the organisation was instrumental this year in preventing what could have been a e-commerce crisis in the UK.
It said how a lack of readiness among the payments industry for new security rules that were due to come into play in September could have left millions of consumers unable to make purchases over the internet with the failure of up to a third of retail transactions, costing retailers billions in lost revenue.
It details that the new rules, known as ‘Strong Customer Authentication (SCA)’, involve shoppers providing further information to verify that they who they say they are when making payments online.
To complete a transaction a customer would be expected to provide two factors of identification from something you are, something you have, or something you know.
It acts like a card and PIN in the physical environment – meaning most face-to-face transactions are unaffected, but online customer journeys could suffer.
The report went on: “Whilst the new rules are welcome as a tool in the fight against fraud, it became clearer as 2019 rolled-on that the banking and payments industry were in no place to implement the new rules without widespread disruption to, or plain failure of e-commerce.”
Adding: “The BRC led a coalition of business organisations to call for a delay to enforcement of the new rules to ensure a greater state of readiness across the country. And in the summer the regulator responsible, the Financial Conduct Authority (FCA), accepted a managed rollout plan for SCA prepared by UK Finance, with significant input from the BRC.”
However, the post concluded in stating that “we’re not out of the woods yet” with regards to the potential e-commerce crisis.
It states: “The new rules will now come into play in March 2021 and so there in a mammoth task to be done to ensure that the crisis is averted and not merely delayed.
“The BRC are working closely with the banking and payments industry through the UK Finance Project Management Office to deliver a good state of readiness for SCA through awareness and the urgent deployment of technical solutions that work for customers and retailers.”
The BRC explained that if you sell online then SCA is critical to your business and will impact the experience of your customers.
What about the high street?
Retail sales in November fell as shoppers held off for Black Friday later in the month, a report put together by BDO has found.
Total like-for-like sales fell by -1.8% this month from a base of +1.4% for November last year.
Total in-store LFLs declined by -1.9% in November from an already negative base of -2.6% for the same month last year.
Overall footfall was down for all weeks in November when compared to the same weeks in 2018 as the month began with footfall recording a decline of -2.7% and actually recorded its largest fall of -5.1% in the penultimate week.
The report detailed how November’s LFL results “provide a stark representation of the delicate trading environment within which retailers are currently operating.”
It went on: “With Black Friday shifting later in the month for the first time in five years, this month demonstrated how engrained promotional discounting has become in directing consumer spending.
“Sales are likely to see an uptick in the tail-end of this critical holiday trading period, but with reports that consumer confidence continues to languish in negative territory retailers will be holding out hope of seeing 2019 conclude with clarity on the future of business rates, investment, and Brexit.”
However, retailers expected growth to return in the year to December, with their strongest expectations in seven months, a CBI Distributive Trends survey has found.
This is despite retailers reporting broadly unchanged sales volumes in the year to November after six consecutive months of declining annual sales.
Business conditions are expected to remain stable over the next three months and total employment was broadly flat in the year to November, with the strongest growth in part time employment in five years counterbalanced by a further fall in full-time employment.
Orders placed upon suppliers fell for the seventh consecutive month though, and at a faster pace than in October. This means retailers are once again planning to spend less on investment next year than they did this year.
Anna Leach, CBI’s deputy chief economist, commented on the survey alluding to an e-commerce crisis: “Retailers are entering the festive season with a bit of hope that sales will head up, with the strongest expectations in half a year. Actual sales have also stabilised and have nudged above average for the time of year. And employment has stopped falling after three years of decline. But Brexit uncertainty continues to weigh on investment plans for the year ahead which remain weak.”
Adding: “As the election period gets into full swing, retailers will welcome the prominence being given to fixing the broken business rates system. But it will be up to the next Government to turn warm words into action.”
Across the economy more broadly, growth has been volatile during 2019, as activity has shifted in response to moving Brexit deadlines, and underlying momentum has slowed. 38% of respondents reported that sales volumes were up on a year ago in November, while 41% said they were down, giving a balance of -3%, the highest balance in 7 months.
Retailers said they expected sales volumes to increase in the year to December (+21%), with 44% expecting a rise and 23% expecting a fall. Orders placed upon suppliers fell for the seventh consecutive month in annual terms. 32% reported an increase while 42% reported a fall, giving a rounded balance of -9%. Those surveyed said they expect a recovery in orders growth next month of 12%.
Following the report on the e-commerce crisis, the BRC reported on how 2019 was the worst year on record for retail in the UK.
Read the full story here: