Britain will leave the European Union at the end of March 2019, but e-commerce businesses need to plan for a post-Brexit future now.
Why? Online sales rose a mere 3.6% year-over-year in July—one of the slowest growth rates of the past three years, according to Visa—which suggests that consumers have started to shy away from spending.
With that in mind, we’ve taken a look at our data to get a clearer view of how Brexit is already affecting e-commerce and what online sellers can do to prepare.
A weaker pound could boost exports
The British pound has become one of the worst-performing currencies in the world. It plunged to a 31-year low against the US dollar last October and has spent most of the summer nearly on par with the euro for the first time since the 2009 global recession.
But while a weak pound makes imports to the UK more expensive, it also means that British goods are now cheaper to European shoppers—and xSellco’s customers are reaping the rewards.
Our UK clients increased their sales to Europe by 49 percent year-over-year in July. In fact, European customers made up 15.5% of their total sales that month, up from 12.8% a year earlier. This additional revenue was driven by Amazon and eBay’s European sites, French marketplaces Cdiscount and Fnac, and the Polish giant Allegro.
To that end, there’s never been a better time to improve your international support strategy. Whether you currently sell on European marketplaces or you’re planning to expand your distribution, xSellco’s auto-translation and localization features help you speak the language of your customers and communicate in a way that’s familiar to them when it comes to clothing sizes or measurements.
E-commerce sales could increase thanks to changing spending habits
Visa reports that British consumers spent 0.8% less in July than they did a year ago, marking the third-straight monthly decline and the UK’s longest spending slowdown in more than four years.
On the bright side, e-commerce channels are bucking the trend, as shoppers increasingly favor online shopping and make fewer trips to stores—and businesses that have positioned themselves to benefit from this change in behavior are clearly winning. In fact, xSellco’s UK customers saw a 22 percent year-over-year increase in domestic sales in July alone.
That being said, it’s more important than ever to offer a personalized support experience. If a customer reaches out to you post-purchase about a problem with their order, you should respond as soon as possible in a tone that’s human, friendly and personal—not robotic.
With xSellco, you can turn something as dull as an automated email into a positive customer experience. Our customizable message templates help you write a quick, personalized response that includes key details like their name and order information in a couple of clicks. In addition, our auto-responder means that you can still meet customer expectations during peak support times or out-of-office hours.
Buyers will be on the lookout for the best deals
No wonder Britons are tightening their purse strings. Market research company Mintel’s most recent British Lifestyles report reveals that four in five (83 percent) consumers are concerned about price hikes on goods and services in the aftermath of Brexit.
As such, people will increasingly shop around to find the best deals. Online sellers who offer the right products at the right price will reign supreme and the price war, as ever, will be fought and won on Amazon.
But most shoppers won’t even see your products unless they appear in the Buy Box—and price is just one of the many factors involved. While Amazon doesn’t disclose specific targets, it has said its algorithm is programmed to choose the sellers they believe will offer the best shopping experience, based on fulfillment, feedback, customer service and other elements, including price.
xSellco helps increase your seller scores—and, thus, your shot at winning the Buy Box—by sending smart, selective feedback requests to happy customers so you can improve your reputation.
A soft Brexit would be good news for cross-border sellers
Brexit trade talks won’t begin until October, but if the Labour Party has its way, the UK would remain inside the single market and the customs union for a transitional period as it leaves the EU.
This would be a major boost for online sellers who trade on EU marketplaces, as it would eliminate customs and duties requirements that would essentially be seen as an additional tax on cross-border trade.
For xSellco’s UK customers, domestic and European sales were both up in July versus the same month a year ago, but as with any time of uncertainty, the market is bound to change. To ensure the UK’s exit from the EU affects your e-commerce business as little as possible, you need to improve the online experience for your customers now. Do this and you’ll weather the post-Brexit storm.