On the night of the 23rd June 2016, something unusual showed up in the Google Analytics of our customer accounts that’s been part of a pattern ever since.
When everyone came into work that morning, analysing the ecommerce stats across our 30+ ecommerce websites was not top of the agenda. It was that the UK had just voted to leave the European Union. Spotting the ecommerce trends came later, especially when we started to look at where the sales were coming from; Germany, Norway, Holland, Denmark, Finland. In short, anywhere that suddenly found themselves with purchasing power that was at least 10% better by buying in Pounds from UK suppliers.
The Pound has continued to fall and has now lost almost 20% of its value since Brexit. Several people that we have spoken to and that operate within the ecommerce sector say that this is around the amount by which International online sales have increased.
Traders shouldn’t get too excited, the effects of the low Pound on ecommerce are now starting to wear off. Some of our customers that sell items such as high-end bicycles or jewellery that are commonly price-fixed by the International brand-owner-manufacturers have now caught up and re-levelled their niche playing fields. As supply chain stocks work their way through the system there will be a gradual evening out of prices. Because the larger ecommerce traders have done more than most to optimise their supply chains in order to minimise paid-for stock-holding, they are the ones whose commercial advantage will erode first. The businesses that will maintain this exporting advantage longest will be those that struck long-term agreements down the supply chain or have bought-forward or who have hedged purchases into Euros, or more likely, into Dollars.
For those selling British products that are not too dependent on import component costs, the benefits of a low Pound should continue long-term and probably improve still further as overseas buyers switch to find the best value products. Overall then, it’s good news for the UK-based ecommerce traders …. until such time as we come to spend our proceeds on some fancy overseas holiday in the sun.
The main reason why the Pound has fallen is because International markets have reappraised the strength of the UK economy in terms of the trading gap between what we import and what we export. Such an analysis has judged us to be in a weak position. With the UK now looking to go it’s own way as a trading nation, it’s never been more important to focus on items that create wealth, jobs and exports. If that is correct then we need to focus on ecommerce even more strongly than before.