Like many businesses, retailers are closely monitoring the effects of the Brexit referendum. While much remains to be seen, British fashion retailers, such as Burberry and Superdry, have seen profits jump due to the weaker pound. Burberry’s in-store sales have swelled as foreign tourists spend more on luxury items in the shops. Meanwhile, online clothing store Superdry has seen increased spending from customers based outside of the UK, helping the company beat their profit forecasts.
A weak exchange rate provides distinct upside opportunities for British retailers related to international online shopping. A recent global commerce study from Bronto looked into the attitudes of consumers regarding cross-border shopping and found that only 27% of US consumers have made a purchase from a UK-based store, despite 77% being open to purchasing from abroad.
Conversely, the study found that 80% of British consumers are open to cross-border online shopping, with 44% having made at least one purchase. For this group of consumers, a weaker pound means less shopping power abroad.
The current exchange rates make it an excellent time for UK brands to expand their ecommerce presence and marketing efforts overseas, while looking to lure back local consumers that have been shopping abroad.
The Bronto report also offers insight into where you should focus your efforts to take advantage of this opportunity. Think about product offerings, shipping costs, fulfilment and pricing.
Think globally. Act locally.
To address these new markets, focus on why foreign consumers would consider buying directly from a British retailer. Per our report, the top two reasons are better prices and unique product offerings. With the exchange rates, price will take care of itself. To put yourself in the best possible position for unique offerings, however, do your research and know which products and brands are under-served in your chosen market. These should be the focus of not only your site, but any promotions you run.
Now that the product offering is set, it’s critical to make shoppers feel comfortable navigating your website. Make it look local, offer prices in local currency and use local terminology – even where English is the primary language in both markets. If possible, consider a local language option to improve accessibility to your brand. For example, Ted Baker, the quintessential British brand, has recently launched its first fully foreign language site in German.
Win the fulfilment battle everywhere
Other than purchasing power, the biggest weapon retailers can wield is efficient (and inexpensive) fulfilment (shipping and delivery). Our report found that the most common barriers to cross-border commerce are customer concerns about shipping costs and potentially lengthy delivery times. Help close that first sale by offering shipping incentives – with offers encompassing both regular and premium shipping.
Apply the same ideals to homeland offers as well. For example, offer free upgrades to express shipping. For overseas shoppers, you remove the lengthy delivery time. For home-grown business, you create a service that foreign competitors will find too expensive to match. Further down the line, shipping costs could be used as a loyalty incentive for returning customers.
Total cost matters
Price, alone, won’t convince foreign shoppers to purchase from you, though. Other factors must be considered. While the weaker pound opens other ecommerce markets, it could increase costs associated with shipping, logistics and fulfilment. Not only must the total purchase cost make sense to the consumer; it must be profitable for you, too.
With foreign consumers re-engaging with British brands as they see their buying power increase, retailers should look abroad for growth opportunities. With 61% of our study respondents citing ‘better prices’ as a major factor in shopping internationally, the current exchange rate is a powerful tool for finding new business in both foreign and domestic markets. It creates a nice silver lining on an uncertain cloud.
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