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RetailX Brand Index 2019

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How would Remain or Leave affect the ecommerce and multichannel industry?

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How would Remain or Leave affect the ecommerce and multichannel industry?
How would Remain or Leave affect the ecommerce and multichannel industry?
What are the arguments for Remain or Leave from the ecommerce and multichannel retail industries? We asked for contributions from across the industry on the debate, ahead of Thursday's EU Referendum. Here's what you told us.

Payments



Simon Black, CEO at cross-border payments specialist PPRO Group

“From small family run businesses to large multi-national conglomerates, commerce resides in an increasingly global marketplace. Research reveals that by 2020 some 40.6% of all British ecommerce revenue will come from sales outside of its borders. Europe itself is expected to account for £16.7bn of all ecommerce revenue for British businesses by the end of the decade.

"If the Brexit was to go ahead, the viability of continuing our leadership in cross border ecommerce would be under severe threat, impacting the very livelihoods of digitally-minded British businesses.”

Image: PPRO infographic

Delivery



Nir Debbi, CMO and co-founder of Global-e

"Our research, conducted last month, found that 60% of British retailers have no plans in place whatsoever in the event of a Brexit from the European Union. Furthermore, it was announced this week that new polls have revealed Vote Leave are edging ahead of the Remain camp. With this in mind, it is vital retailers plan ahead and ensure their business is equipped to deal with the short and long term complexities incurred in the event of a Brexit.

"According to HSBC, the value of sterling is set to drop 20% should Britain vote to leave the EU. Post-Brexit, this is the principal issue impacting the British retail industry. The cheaper pound is expected to increase exports, with British businesses becoming more attractive and better value for money to customers across Europe, and beyond, than those locally.

"However, if the UK does vote to leave, new trading agreements will most probably be set in place with the EU. This might make the sales process more complex for both the retailer and for cross-border shoppers based in EU countries. As the EU is the largest export destination for cross-border exports from the UK, the introduction of customs duties and taxes plus the additional handling, which is far more complex than the current situation, could be off-putting to the consumer.

"British retailers must look at efficient ways to handle the new friction point in the sales process in order to take advantage of the weakening Sterling opportunity. Retailers must have contingency plans in place in order to maintain (or get) their cross-border business up and running in EU countries, without impacting the customer experience.

"If the UK votes remain, British retailers must take advantage of the Single Market’s 500 million consumers and implement long term plans to grow cross-border ecommerce. With the right preparation for both scenarios, technology and processes in place, retailers can continue to see sales grow and conversion rates improve whether the UK is in or out of the European Union."

International trade



Naveen Aricatt, legal expert at Trusted Shops

“The effects of a “leave” vote could be immense. There is no precedent but lots of uncertainty in how the vote will unravel and what the political and economical implications will be for the whole of Europe. What is certain, is that there is a chance of significant breaks occurring in the viability of cross-border commerce. Not being part of the EU eliminates the privileges of free trade, free movement of goods and services and free persons, and with it cuts off direct access to a massive pool of prospective buyers. Currently the EU market covers 28 countries with 500 million potential customers – a number no retailer with growth potential wants to ignore.

“If we move ahead with a Brexit, the UK will lose it's most important trading partners (excluding the US and China) with countries like Germany or upcoming markets including Spain. Especially for those in fashion like ASOS, which has succeeded in selling to countries like Germany, it could now be a struggle to remain competitive as EU consumers are attracted to offerings from other Member States where no additional charges apply. Particularly for small and medium size retailers the cost of exporting to the EU will hinder their capacity to thrive, particularly given they will not be able to form strategic partnerships or retail co-operations as easily as some of the bigger brands.

“While the overall UK market might remain strong because of its size, a Brexit is not just a one-sided loss for the UK. The EU will also lose an influential market. In fact, European consumers have traditionally championed the UK for branded items and electronic goods, despite the fact that new trends and innovations arise in the US.”

European regulation



Emmanuel Arendarczyk, managing director, UK and France at NetBooster

"First, exiting the EU seems likely to add costs. In the absence of a trade agreement, retailers face the prospect of tariffs on goods sold to European buyers. They also face potential extra charge for delivery if goods have to pass through customs. More immediately, the weakening pound that some predict would make British exports cheaper, but, having to source goods from Asia and elsewhere would also make stock more expensive for retailers.

"Even with low or no tariffs, Brexit could still result in extra costs that will make a significant difference to price-sensitive shoppers. Soft barriers, such as longer delivery times, could also have a significant impact on sales.

"Much, of course, is said of EU regulation, but again the changes would not necessarily benefit online businesses. The EU’s Digital Single Market legislation currently being consulting on, for example, is primarily designed to make cross-border e-commerce easier.

"Finally, the role on London as a centre for pan-European online business will also be at risk if the free movement of people is called into question, and businesses are forced to restructure to continue to operate.

"Of course, none of this is certain, and it’s true that many online retailers enjoy a strong export business outside the EU. When it comes to UK consumers buying online, their top markets are actually the US, Australia and China, according to IMRG, the UK industry association for ecommerce. We’ve also seen from places such as California that immigration policies can be designed to support and encourage innovative businesses. So it’s quite possible Britain’s online business could still thrive.

"Nevertheless, the risks of a vote for Brexit must be considered and addressed, and the evidence to date suggests many haven’t begun. That’s not necessarily a problem – the Lisbon Treaty stipulates a two-year negotiation for a member state that does decide to leave, so change won’t happen overnight. If the vote on June 23rd is for Leave, though, the next couple of years are certainly going to be busy."

This is a work in progress – we'll add in new contributions as new points are made. You can add your voice in the comments below.

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