CHLOE RIGBY, EDITOR, INTERNETRETAILING.NET
The Government issued technical guidance in August on what exporters will need to do should there be a no-deal Brexit. That advice came in the same week that the Government launched an export strategy targeting 35% of GDP from exports in coming years. With many now giving a 50/50 chance of the UK leaving the EU without a deal, it looks like it’s time to start planning.
Exports have long been key to online and multichannel retailers in search of growth, and exporting to Europe is one of the easiest markets to serve since currently there are no tariffs to pay on sales and delivery times are fast.
The EU is a key market for retailers such as fast fashion pureplay Asos, which makes most of its sales overseas. Its latest figures, for the four months to June 30, show that 64% (£514.7m) of its total £802.7m retail sales came from international markets. The EU was the largest of those markets: sales of £257.4m accounted for a solid 50% of its international sales.
The latest IMRG MetaPack UK Delivery Index suggests that European orders were an important part of the 15.2% growth it saw in the delivery of online orders in July. Andrew Starkey, Head of E-logistics at IMRG, says 2018 is proving a “solid year” for online delivery growth.
He added: “With European shoppers apparently taking advantage of the strength of the euro against sterling, and UK shoppers wanting to make the most of the hot summer, it’s only the on-time delivery rate (90%) that remains a concern over the coming months as we approach the peak shopping season.”
The Government’s guidance on trading with the EU if there’s no deal says that the major changes will be to customs and excise duties.
No deal would mean that there is no EU free trade agreement and trade would be on World Trade Organisation terms that would apply set ‘most favoured nation’ tariffs to consignments sent between the UK and the EU. What individual tariffs are will depend on what retailers are selling. Currently the UK’s proposed post-Brexit WTO schedule is being reviewed in a three-month consultation among members. After that, the UK schedule, which replicates existing EU commitments, will be deemed approved if there are no objections from WTO members. However, it seems likely that there will be objections from markets including the US and Australia.
The UK Government no deal guidance suggests that exporters – which include online retailers selling abroad – should plan at all levels for the likely changes to these duties. They’ll need to consider how their supply chains might be affected, and may need to renegotiate existing contracts in the light of any changes to customs and excise procedures.
Hiring suppliers such as customs brokers, freight forwarders or logistics providers may help, as may taking on HMRC-authorised customs warehousing in order to delay duty payments until the goods are sold. Northern Irish businesses that export to Ireland “should consider whether you will need advice from the Irish government about preparations you need to make”.
Exporters and importers will need to register for a UK Economic Operator Registration and Identification (EORI) number. They will need to update their contracts and international terms of service to reflect any new status as an importer or exporter, and they may need to apply for import or export licences and will need to pay VAT and import duties as well as recording exports, including through safety and security declarations.
Businesses that sign up for the HMRC’s EU Exit update service, available at www.gov.uk, will be notified when the EORI service becomes available.
But how likely is this to happen? The Government is clear that no deal is not a scenario it expects to come about – but over the summer the likelihood of no deal has been put at about 50% by individuals and organisations from the Latvian foreign minister to the EU, while UK Foreign Secretary Jeremy Hunt has warned of an accidental no deal. That suggests retailers should strongly consider preparing for this scenario.
JESSICA EXTON, BEHAVIOURAL SCIENTIST, ING
Before the first secure online retail transaction in 1994 and the advent of now-global giants Amazon and eBay in the mid-nineties, few may have predicted the take-off of online shopping. But almost 30 years later, most people across Europe, Australia and the United States spend online regularly.
In fact, two thirds (67%) of those in Europe now shop online at least once a month, according to the latest ING International Survey ‘How do you prefer to pay?’
One in six (16%) Britons and Americans have bought goods or services more than once a week in the last 12 months, 6% higher than the overall European average of 10%.
Overall, more than three-quarters of people in the UK (77%) shop online at least once per month – 10 percentage points higher than the European average (67%). At the other end of the scale, only half of those in Belgium (51%), 55% in Romania and 57% in France shop online at least once a month.
However, it’s not just the frequency of online shopping which is increasing, it’s also the many ways people choose to pay. The continual development of new payment technologies, as well as our growing familiarity with online payments and mobile banking more generally, are contributing to the uptake of a growing number of payment channels.
This is allowing consumers to design their own payment process, exercising more choice and control over their spending. But while being able to select the payment process provides a personalised user experience, too many options can be overwhelming.
Because the popularity of online payment methods varies by country, primarily due to availability and familiarity, providing the right number of choices without overloading the customer is key. This involves understanding local expectations, for example we asked about a large number of payment options available in Germany (7) and a smaller number available in Australia (2).
Of current methods, PayPal is the most accepted, facilitating a third (32%) of European online transactions. While debit/credit card payment remains popular, many are storing their personal details and card data to enable one-click purchases. Prioritising trust within strong customer relationships is therefore also essential.
As technology continues to filter through our shopping habits, opportunity for diversification in how we pay online remains. However we haven’t completely moved on from physical cards and cash. A quarter of e-tail payments are still made by manual card entry or cash payment on delivery, suggesting true payment diversification, rather than mass movement to a dominant option.
MICHYL CULOS, HEAD OF MARKETING COMMUNICATIONS, MAILJET
Emojis have come a long way from their origins. By focusing on visual representations of emotions and familiar items, it’s often heralded as the first truly global language.
But to assume emojis are ‘one-size fits all’, underestimates their complexity, even across regions with cultural similarities. In the UK, consumers lap up the opportunity to complement text with imagery, but not all countries follow suit.
Mailjet conducted its annual emoji test within email subject lines across a database of over 20,000 subscribers, to explore what works for different countries and how brand marketers can become more empathetic to their local and international audiences.
In 2017, the research discovered that the outlook for emojis wasn’t certain as open-rates only increased by 5% when including an emoji in the subject line of an email. This year, emojis are back in favour.
Email open-rates increase by 9% among UK recipients when the Symbols on Mouth or Open Mouth Vomiting emojis were included alongside subject line: ‘Emails that make you feel (emoji)’ – highlighting our love of satire and schadenfreude.
There’s no blanket rule for driving engagement across Europe though. While a boost was seen in UK engagement for the Symbols on Mouth emoji, in France and Germany that same emoji caused open-rates to fall by 6%.
French open-rates only increased by 1% when including an emoji in the subject line. A decrease of 6% since 2017 highlights that marketers should rethink their emoji-use as an engagement tool in France.
All is not lost on the continent however. Joy rather than Anger or Disgust sets the tone, with open rates up by 6% for the Grinning Face with Star emoji in Spain, where engagement increases by 2.2% on average.
Similarly, Germany staggeringly peaked at 33% when the Raised Eyebrow emoji was used. Inspiring curiosity is an immediate method for driving engagement.
Across Europe, we continue to see cultural differences when it comes to how audiences engage with emails and emojis year-on-year. However, the stakes are raised. As marketers it’s our job to be sensitive to all changes in our markets, whether large like GDPR or seemingly minor like emojis. It all has an impact.