Author: Paul Galpin, Managing Director, P2P Mailing
Would the UK be better off leaving the EU, or remaining part of it? This is the key conundrum facing voters on 23 June. The EU referendum is a hot topic in the media as debate intensifies between the two campaign groups. However, with less than six weeks to go, what delivery questions are at the forefront of retailer’s minds in the countdown to this landmark event?
At present, EU membership allows for the free movement of goods so most shipments can be dispatched to other member states of the EU without special customs documentation. However, if the UK were to leave the EU, will UK retailers see additional customs charges? In addition, what implications would stricter border controls have for cross-border trade?
In the event of a leave vote, delivery from the UK may initially be slightly slower due to customs checks at European borders; this could have far-reaching implications for the customer experience. Customers don’t like delayed or unsuccessful deliveries. Indeed our research shows that experiencing delays or delivery problems just twice or more would convince 87% of people to switch to another supplier.
The returns process
In addition to working out how items would be delivered cross-border, it’s also vital for retailers to consider how they would get them back, should the need arise. It is reasonable to assume stricter border controls would also complicate the returns process. Research by Harris Interactive shows that 85% of customers will stop buying from a retailer if the returns process is a hassle and, conversely, 95% will return to the same catalogue or internet retailer if the process is convenient.
Ecommerce provides UK retailers with a clear opportunity to expand their customer base across the world. However, what effect would an EU exit have on UK retailers targeting European markets? The EU is currently Britain’s largest trading partner, with 52% of the nation’s goods and services exported to the region.1 Would international trade and export plans be reconsidered with an exit from the EU? Or will retailers choose to focus on other overseas markets? For example, the eCommerce landscape in China presents lucrative opportunities for UK retailers. Indeed McKinsey & Co recently produced a report suggesting that the market will be between $420bn and $650bn by 2020. Would an exit hasten this growth?
Understanding the European Customer
The political uncertainty around the EU referendum adds another level of complexity to an already challenging international delivery market. However, overcoming these challenges doesn’t have to be done in isolation. An expert partner with a proven track record will have the necessary global knowledge, contacts and expertise to ensure that retailers can successfully navigate any cross-border delivery challenges, whatever the result of the referendum in June.
1 - BBC News, Better off out or in?, 23 February 2016