Brexit hits UK e-commerce sales

Brexit is already clearly impacting e-commerce sales in the UK and threatens to become a big hit on the market unless there is clarity soon, MetaPack founder Patrick Wall warned today.

Growth in British online sales have slowed significantly over the last few months, according to the latest figures from IMRG, he told over 1,200 delegates at The Delivery Conference 2019 (TDC Global) conference in London, which is organized by MetaPack. “There is definitely a reduction in growth in the UK,” he said.

Wall, who is now director of the retail logistics technology company, put the blame on Brexit for depressing demand amongst British consumers, especially for cross-border purchases. “We are in an incredibly ambiguous situation. It is having an impact on e-commerce sales,” he commented.

Wall estimated that one third of cross-border buyers in the UK are now buying less and warned that two thirds of a £50 billion export market “could be at jeopardy” unless there is greater clarity soon. However, he pointed out that the current UK de minimis level of £135 (€150) per item value will stay in place regardless of what kind of Brexit will take place.

Addressing general e-commerce trends, Wall pointed out that “fundamentals are changing” as brands and marketplaces, including global giants, regional players and specialists such as Zalando, Wayfair and ASOS, outgrow the overall market by providing the best customer experiences.

“We will also see a huge growth in brands online. They are investing in a direct-to-consumer approach underlined by technology that is setting new standards. And it is a proposition that is winning market share for brands,” he commented.

At the same time, physical stores are under cost pressure yet need to improve their customer experience, Wall continued. “It seems to me that many retailers with physical stores are making serious strategic mistakes by not investing enough in the in-store look-and-feel, range authority and face-to- face staff interaction. If these areas are being cut back in order to meet the economics of falling footfall, the decline will continue unabated. If necessary, close stores, but ensure those that remain offer a compelling experience to customers.”

In terms of challenges for carriers, Wall predicted there will be more acquisitions within the industry and urged carriers to collaborate more to improve their drop density or to introduce differentiated pricing.

“There are vast differences in drops per route and therefore the cost per drop. This is unsustainable. The best way forward is to collaborate or failing this, to create differentiation in delivery charges,” he urged the industry.

TDC Global, for which CEP-Research is a media partner, took place at The Royal Lancaster Hotel, attracting over 1,200 delegates from the retail, brand and carrier sectors as well as over 30 exhibitors, including all major British carriers and diverse international firms.