Nick Fletcher, VP, Client Success, Rakuten Marketing, explains why brands need to be looking beyond the European Union
When the next step isn’t obvious, is it better to do nothing and wait, or press ahead in the hope that you’re doing the right thing? That’s the problem facing most British businesses right now, who know that Brexit will affect them but don’t know how, or even when.
“We still don’t even know if it will be a hard or soft Brexit,” says Nick Fletcher, VP of Client Success at Rakuten Marketing , the global leader in integrated marketing solutions, spanning affiliate, display and search. “All we really know is that it’s already had a big impact, weakening sterling considerably against all the major global currencies. This means British goods have become a lot more attractive and affordable to other markets. Combine that with the uncertainty around trading conditions with the EU and I think that UK brands can start to focus on marketing to countries outside the EU.”
As an example of what to do next, Nick points to the British fashion industry, which showed a buoyant £10.7bn of exports in 2016. Significantly, the top three markets – the US, Hong Kong and Australia – were all outside the EU, suggesting that opportunities lie further away from home than Europe. “One of the reasons driving this success is the perception of ‘Britishness’,” says Nick. “Brands such as Harrods , Fortnum & Mason , Matches Fashion and Net-a-Porter are all generating demand outside the UK but also outside of Europe. I don’t see these British brands significantly changing their core offering, as being seen as authorities on what is fashionable has become their global voice. Instead, they have worked on their customer experience to have a site in a local language and a local currency that offers reasonable shipping times overseas.”
While Rakuten Marketing see high-end fashion brands doing well on the global market, they think the high street is lagging behind. “High-street brands need to localise their messages more as global consumers become increasingly comfortable with shopping across borders,” notes Nick. “In this respect, I like HSBC’s tagline: ‘the world’s local bank’. Their point is that they are a massive global business which also boasts local expertise. This sort of ‘glocal’ message is what brands should aim to get across too.”
While Brexit will inevitably affect sales strategies during 2018, lack of clarity around trade terms doesn’t have to paralyse businesses. Instead, they can take the initiative now to stay ahead of the curve. “Potentially, the UK is about to lose some of the massive trading advantages it has with some of its closest and biggest trading partners,” says Nick. “Therefore, brands need to look elsewhere. In the case of the fashion space, Brexit actually represents an opportunity. I think the trading picture for British goods outside Europe is actually going to improve significantly, especially since a weak sterling creates an organic demand for goods overseas. As a result, we believe that 2018 could provide brands with the opportunity to continue what they’ve already started and focus on selling more overseas, especially outside the EU.”
About Rakuten Marketing
Rakuten Marketing employs over 200 staff in London, Brighton and Paris alone. Rakuten Marketing is a division of Rakuten Inc. (4755: TOKYO), one of the world’s leading internet service companies. With UK offices in London and Brighton, the company is headquartered in San Mateo, California, with additional offices in France, Australia, Brazil, Japan and throughout the United States. Discover what the Rakuten Marketing team can do for your business at rakutenmarketing.com or call +44 (0) 207 427 8120