Article 50 has been triggered, so Brexit is definitely (most probably) on its way. The Conservative Party has – in an attempt to increase its majority and deliver the mother of all Brexits – lost its majority. So, all is going swimmingly for the UK.
But what does this all mean for online shop owners across Great Britain? Uncertainty for one. Currency fluctuations. Legislation changes, some of which won’t be expected. New challenges, and new opportunities too.
So, what can you do?
According to a recent survey by Global-e, 68% of UK retailers haven’t made any plans for the breakaway. This is a remarkable figure, especially when considering the UK has the largest ecommerce market in Europe (€157.1 billion), and that the EU is the UK’s largest trading partner. Nir Debbi, the co-founder of Global-E, shared her thoughts on the survey’s findings. “Although some retailers did revise their plans, our research suggests that most are taking a wait-and-see approach, before considering whether to change course.”
While we know very little for certain (if anything at all), simply waiting for the inevitable to happen isn’t an option. Now is the time to make sure your ecommerce site is Brexit-ready.
Brexit will affect all UK ecommerce shop owners, with location, customer location and the product source being the main causes of potential issues.
As a starting point, here are some important areas to consider…
Quick as a flash
A wait-and-see approach seems reasonable, considering we don’t know quite what to expect yet. However, you can get ready for change. Ensuring your site can be easily and quickly customised will make all the difference when you need to jump on new opportunities.
Speak the lingo
If the UK manages to agree on decent trade deals and you want to take advantage of the influx in international shoppers, make sure you offer the best user experience possible. Start with your content – offer visitors the option to switch between different languages. If your budget can stretch, hiring a professional translator will yield better results than Google Translate.
If you’re going to offer different languages, why not go one step further and offer multiple currencies. A European shopper doesn’t want to see the pound symbol – they want to deal in their currency.
Cross-border trading is expected to become more complicated, especially if Britain leaves the single market. For example, if the UK government is free to modify the competition’s law, this could present more opportunities in terms of promotions, offering more choice and testing products – keep your eyes peeled for news about updates on this one.
“The UK leaving the EU will likely change the VAT compliance of UK retailers selling to EU and the distance-selling regulations related to duties and taxes,” added Nir Debbi. “How exactly this will be changed depends on the negotiations, however it is likely to increase the complexity of selling cross border, hence the logistics work and costs. In order to avoid any negative impact on their cross-border sales and the customer experience offered to international clients, UK retailers selling internationally should be ready to react to this as legislation is agreed and be wary of the impact it could have on their EU customers.”
Can your ecommerce store handle changes to tax and tariff calculations? Understanding how to make changes in advance could make all the difference. If the changes are going to drastically affect your business, an alternative – if not drastic – solution would be to move your business to Ireland and keep it in the single market. Within the EU, upcoming Digital Single Market legislation is set to simplify VAT improve delivery service transparency, which is a good example of why some are considering jumping ship.
How you position your product / services will differ from country to country. While some might like creativity, others prefer stability. Offering up different versions of your website depending on the user’s location will help boost sales. Localising your domain will help too – some people won’t want to see a .co.uk. domain extension.
The pound has weakened, and is expected by many to continue this trend. As a result, international shoppers can expect to find a bargain or two here in the UK. For exporters, there is the opportunity to keep prices at the same level to increase profits, or reduce prices to boost sales even further.
While this is great news for some retailers, others will suffer. Importing goods could become more expensive, so this might be a good time to test out local suppliers. However, these changes are not set in stone. The pound may recover dramatically, so don’t put all of your eggs in one basket, based on the immediate effects of Brexit.
How would these changes affect your business? Can you weather the storm, or will you need to make changes to compensate? Could you improve the standing of your brand, which would help customers overlook price increases? Can you better your customer service to increase customer loyalty? How about automating more procedures and increase efficiencies to compensate?
Shipping to the EU could become more problematic, with additional paperwork, higher costs, and new import & export duties too. This could result in extended delivery times too.
If Europe just isn’t going to work for you anymore, now is the time to look further afield and test the water. Liam Fox, the Secretary of State for International Trade, has voiced his opinion on the subject – if free trade agreements can be set up quickly with non-EU Member States, this could provide an opportunity for the UK.
Can you ship products to the USA (the pound is also weak against the dollar), China, Australia or Japan, for example? Does your current carrier offer a suitable and competitive service to these new markets?
If you truly want to embrace the international market, a local representative could make a huge difference. They can be the voice of your brand, offering a first point of contact that speaks the local language fluently, understands local colloquialisms and even works the same hours.
Can we help?
There’s obviously a lot to consider, and with so much unknown, it’s important to keep on your toes. As the Brexit negotiations progress, we will all gain a better understanding of what to expect. Keep a close eye on the proceedings to ensure you’re up-to-date with the political and economic changes, and how these changes will affect your online store.
If you need help making any changes or you’re looking to launch a new site to take advantage of Brexit, Bing Digital can help. Our award-winning team of certified Magento ecommerce experts can help create a strong yet flexible ecommerce shop that will stand the test of time. For a closer look at our experience and expertise, take a look at our recent projects.