Online marketers bemoan Brexit red tape as sales dive

online-shop2Data adequacy might be in the bag but Brexit continues to be a thorn in the side of UK online retailers, with nearly every business (94%) reporting they have lost EU customers since Britain left the bloc at the end of 2020, with two-thirds (66%) admitting they have lost a “significant number”.

So says a new study by ecommerce platform ChannelAdvisor, which commissioned research firm CensusWide to quiz over 300 chief marketing officers at UK brands that sell items online to gauge the current state of the nation.

It confirms that online firms have flourished during the past 18 months with more than nine in ten (92%) of CMOs saying their brand has attracted a “significant number” of new customers since the start of the pandemic, while more than ten in ten (82%) say their brand is seeing higher sales than pre-Covid, and more than a quarter (27%) say their sales are “significantly higher”. Just 16% say sales have remained the same.

Nearly all (93%) of CMOs also agree that they are more confident in their brand’s future now than before the crisis began last March; just over a third (34%) strongly agree.

Yet, despite this new-found confidence, most CMOs fear their brands are being hindered by Brexit disruption.

When asked about overall international sales, more than two thirds (68%) said Brexit has caused a drop; one in five (22%) said sales had fallen “significantly”. Just 15% witnessed a rise in sales, while 17% say there has been no effect on sales.

The main issues appears to be the increase in “red tape”, the very issue Brexiteers claimed would disappear once the UK left the EU.

The vast majority of CMOs say this has caused issues in sending items to international shoppers on time. Three-quarters (73%) said Brexit has delayed deliveries to EU customers; a third (33%) report a “significant” slowdown in deliveries.

Even so, you cannot keep a marketing chief in the doldrums long; nine in ten (91%) CMOs predict international sales will still increase over the next 12 months, with a third (33%) saying they expect international sales to rise significantly.

ChannelAdvisor EMEA managing director Vladi Shlesman said: “UK online brands are enjoying a phenomenal period of growth and will no doubt play an integral role in the country’s post-Covid recovery.

“However, the past few months of Brexit disruption have caused a significant headache for the vast majority of these firms, thanks to delays and complications at UK-EU customs.

“Brands rarely become ecommerce giants without strong international sales and finding a solution to this border disruption will benefit all sides.”

The report coincides with a study by the UK Fashion & Textile Association, which questioned leading UK fashion brands, UK textile manufacturers, wholesalers, fashion agencies, garment manufacturers and retailers.

Nearly all (98%) report additional bureaucracy since the start of the year, with 92% experiencing increased freight costs and 83% encountering increased costs and bureaucracy around customs clearance.

The findings also showed that three-quarters (74%) of fashion businesses were experiencing generally increased costs associated with Brexit. The vast majority of those were looking to pass on these costs to consumers in the next six to 12 months.

Back in March, a study from delivery company ParcelHero claimed that increased red tape and duties meant UK traders could face a 35% drop in sales of products sourced overseas, opening up a £5.25bn black hole due to lost trade and increased costs.

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