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Effects of Brexit being felt across UK ecommerce and multichannel retailing

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The effects of last week’s UK vote to leave the European Union are being felt across ecommerce. While negative effects are being seen as share prices fall, opportunities are opening up as the pound falls against currencies from the euro to the dollar – making the UK prices a bargain for overseas shoppers buying online.

Kantar Retail has noted that international customers started to buy online from UK websites as soon as the pound started to fall on Friday. It points to tweets as social media users from elsewhere in the world order, and indeed set up, Amazon accounts. “Amazon is incredibly creative when it comes to working across borders so we expect Amazon to do very well in the short term,” said Kantar Retail in its analysis.

It also says UK retailers will need to source goods locally in the face of the falling pound. Retailers such as pureplay grocery retailer Ocado would be hampered as they needed to cut back on imports, it said. Ocado, however, makes no mention of the referendum in its first-half figures, out today.

Carpetright said in its full-year results today that it was “cautious” about the effect of post-referendum uncertainty. Chief executive Wilf Walsh said: “The outlook has been further complicated by the outcome of last week’s referendum and we are cautious about the impact the associated uncertainty will have on consumer confidence.”

Sports Direct has said the volatility of the pound, particularly against the dollar, is likely to affect its sourcing. “These factors are likely to impact purchases for which the company is not currently hedge for the full year 2017 period and beyond,” it said.

It is among retail stocks that have been affected by the vote. On Friday it opened at 387.50p – and this morning opened 21% down at 295.3p. Others include Next, with shares opening at 4,384p today, having fallen by 9% over the course of yesterday. M&S, which was trading at 444p as recently as May, stood at 366.3p on Thursday, fell to 326.5p on Friday and today opened at 285.2p after falling by 12.6% over the course of yesterday. Meanwhile, fell by 7% yesterday to open at 53.5p today.

In electricals, AO Group – parent company of and – shares opened at 120.5p today, down from 146.4p over the course of yesterday. That’s a fall of 17%. Last Thursday, referendum day, its share price closed at 158.0p.

On Twitter, veteran retailer Bill Grimsey said today that Brexit voters were now feeling buyers’ remorse.

Kantar Retail has some next steps for retailers. It says they now need to focus on areas where regulations are likely to change. Alongside food labelling and food packaging and social and environmental changes, it points to data as being a key area of focus – and one particularly relevant to ecommerce traders. “The European Union has spent extraordinary amounts of time setting rules on personal data privacy, corporate data security, policing of data and other issues related to cloud computing, data sharing and survey work,” it said. “The types of data that retailers have access to, how they gain access to it, and how they protect it will change.”

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