Although Brexit may seem like the stuff of nightmares to a lot of UK retailers, there are some positives; here we explore why brands should consider ecommerce after Brexit.
For the last year and a half, there’s been a lot of speculation surrounding the decision the UK made to leave the EU; what will this mean for our laws, our families and, most of all, our businesses?
Whilst a lot of this speculation has been negative; focusing on what the UK might lose or what extra costs we may incur, there are some seldom explored positives of Brexit, and new opportunities for businesses to consider – one being switching to an ecommerce site.
The UK is a market leader in ecommerce
The UK has one of the most developed ecommerce markets in the world, with an estimated £18bn spent online via smartphones alone in 2017.
Now, by anyone’s standards, that’s a lot! Especially when we consider that UK smartphone shoppers make up almost 3% of the EU’s entire ecommerce industry which stands at approximately £526bn.
And, what this means is that UK ecommerce is already incredibly strong and well-established; consumers trust UK brands online and, when consumers trust brands, they’re more likely to stick with them, even during times of uncertainty. A great start!
The weakened pound
Whilst the rapid and immediate decline of the proud British pound following the announcement of Brexit caused huge amounts of chaos for holiday makers, traders, and traditional retailers across the country, it also led to a massive increase in online sales from the UK to non-EU countries – retail orders in the UK rising by 11.3% in January 2017.
Of course, it doesn’t take a Doctor in economics to figure out why…
The falling value of the pound made UK products more affordable to those outside the UK, if only by a small margin, which in turn made them more attractive.
With the plummeting value of the pound comes a greater sense of value for money outside of the UK, and therefore greater opportunity to mine markets in non-EU countries.
Laws & regulations as opportunities
Although some laws & regulations following our exit from the EU will make international selling more complex – e.g. distance selling regulations – some, like new VAT laws, may make it easier to sell goods outside of continental Europe.
There could also be more opportunities for UK retailers testing new products and promotions thanks to competition laws; in turn decreasing competition from EU retailers which will allow UK retailers to raise their prices without fear.
The change in these laws & regulations will also make it easier for UK retailers to purchase from cheaper marketing outside of Europe. Alongside higher prices, this could increase profit margins, as well as business opportunities in general.
Reduced costs of running an ecommerce shop
Pair all of this with the associated costs of running an online shop compared to a physical store, and we start to see another area of huge benefit for UK businesses.
Where traditional shops come with general, ongoing, and often substantial running costs like: electricity, rent, and staffing, the everyday cost of running an ecommerce shop is much less. All you (as a UK business) really need to worry about is the initial set up cost, regular hosting & maintenance, and maybe the cost of a warehouse if you keep a extensive array of stock. So, you’re already winning.
Less overheads means you can afford to make your prices more competitive, whilst maintaining great profit margins.
Having the freedom to legitimately increase your prices further, and reach new markets outside of Europe, whilst also purchasing from cheaper international markets will inevitably see your online shop succeed.
Why brands should consider ecommerce after Brexit
Amongst all the doom & gloom associated with Brexit and the uncertainty surrounding how it will negatively impact UK businesses, there are some great opportunities that will come out of Brexit for businesses. If ever there were a ‘perfect time’ for UK businesses to start selling online or strengthen your online offerings, it really is now.
To reap the benefits of selling online, talk to us today.