The recent UK elections have ensured that the question of “Europe” and ‘Brexit’ will dominate news for the coming year. Is there an ‘ecommerce position’ on Europe, and is this even a commercial question? Ian Jindal considered whether we can find more light than heat in the debate…
The word “Europe” is nebulous, unclear and conceptual - yet viscerally important to people inasmuch it links their hopes, values and futures in a single phrase. Even if it’s possible to disentangle the personal from the political and commercial, the way in which we attempt this will have long-term repercussions.
I am of a generation that saw Europe as a route to trading prosperity and liberal markets, while also working to avoid a third European-generated world war. While the UK has consistently avoided the language of ‘integration’ and a federal European state, the language of unity has also been consistent. Indeed, in the recent Scottish referendum the unionist call was for Scotland to remain part of the UK. A resonant phrase at the time was that ‘the world doesn’t need another small country’ and so we seem to want to be no smaller as a country, yet also remain separate from Europe.
These arguments are emotional and at heart speak of how we see ourselves in the world and our own identity. For commerce, however, this reasoning is too nebulous.
Ecommerce can offer products seamlessly and without friction across borders to the whole of the EU thanks to a consistent trading framework of taxes, market access and legislation. Our logistics partners are able to locate warehouses in one country, sign contracts in others, drive across borders and hire staff where needed supported by the reality of law, roads, buildings and of course people. However, retailers correctly cite that we can readily trade globally, often without the admin overhead of Europe (which a report from the Swedish National Board of Trade, www.kommers.se/onlinetrade characterises as 28 individual markets).
‘People’ may be the key aspect for consideration. Ecommerce needs people - both as employees and as customers. These are of course often the same, especially given retail’s role as a major employer.
Ecommerce needs skills that are in high demand. Senior professionals from the UK are sought-after around the world. Last week I was working with a global brand whose European team in Italy comprised British, French, Dutch and German managers, all working together. Talent rejects boundaries.
For our front-line staff, however, the picture is less rosy. Retail is not known for the generosity of its store pay. The staff who carry our brand to customers feel under threat from wage stagnation, job security concerns and limited prospects. Against this background, European migration for work is a raw topic. Marc Carney (Governor of the Bank of England) said in May that the UK’s employment levels have surged, thanks to people working longer hours and older people staying in work. His estimate was that this contributed 500,000 jobs to the economy. In comparison, net migration contributed 50,000 jobs, yet it’s still a ‘dog whistle’ topic. Crucially, Carney sees that the key question for our economy is not migration but rather increasing UK productivity.
A concern for etailers is whether the European market is addressable as a ‘whole’. Our research into the Top500 retailers in Europe has shown that only 20 retailers have a store in 10 or more countries. Can ‘retailing’ be pan-European, or is it more an opportunity for brands selling direct? Furthermore, those selling into Europe note that there’s no such thing as a “European customer” - rather each country is as distinct and demanding as our own. We are unlikely to have misty-eyed delusionals amongst our readers who trade in Europe on a daily basis!
The question for our readers in the coming year is whether to address Europe in an individual capacity, or to contribute to an industry voice: a narrative of skills, of customer connection, of cross-border commerce. A narrative that is objective and contributory, ensuring that the fundamental commercial questions are aired (amidst the noise of the in-out debate).
At InternetRetailing we will be running a thread of apolitical investigation into the views, options and factors for ecommerce in Europe and we welcome your thoughts and contribution. We have a series of lunches, opinion pieces and research activities in the next 6 months and if you’d like to join in, contribute or cajole, please do drop me a line at email@example.com.