Disruption caused by Brexit has had a drastic impact on Britain’s e-commerce economy, with 94% of online UK brands stating they have lost EU customers since the end of the transition period on 31 December 2020.
E-commerce platform ChannelAdvisor and research firm CensusWide surveyed 304 CMOs working at UK brands that sell items online. ChannelAdvisor asked if these brands had lost business due to Brexit disruption, such as added complications around border delays and unexpected tax. The overwhelming majority said they had lost EU customers – with two thirds (66%) saying these complications had caused a significant drop in the number of EU customers.
While bricks and mortar retail shops may have faced harsh conditions due to COVID lockdowns, brands that sell online have flourished thanks to a surge in e-commerce. 92% of brand CMOs say their brand has attracted a significant number of new customers since the start of the COVID-19 crisis, while 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 are roughly the same.
93% of brand CMOs agree that they are more confident in their brand’s future now than before the COVID-19 crisis began in March 2020 – around a third (34%) strongly agree.
Yet this bright future for UK e-commerce could be hindered by Brexit disruption. When asked about overall international sales, more than two thirds (68%) of brand CMOs say Brexit has caused a drop – one in five (22%) say Brexit has caused their international sales to fall significantly. Just 15% say Brexit has caused international sales to rise, while 17% say there has been no effect on sales.
The vast majority of brands say Brexit has caused issues in sending items to international shoppers on time. 73% of CMOs said Brexit has slowed how quickly their brand can deliver purchases to EU customers – a third (33%) say it has caused a significant slowdown in deliveries.
Despite this, brands are confident about overall global revenue growth in the coming year. 91% of CMOs expect international sales to increase over the next 12 months, with a third (33%) saying they expect international sales to rise significantly.
Vladi Shlesman, MD, EMEA for ChannelAdvisor, said: “UK 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 last 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 e-commerce giants without strong international sales and finding a solution to this border disruption will benefit all sides.
“Leveraging expertise like a third-party logistics provider can overcome fulfilment challenges, or looking to new sources of demand could help plug the gap in demand. In the meantime, it’s inspiring to see that brands are enthused and confident about the coming year. After such a transformative time in the industry, I hope they continue to reap the rewards of e-commerce.”