Brexit makes headlines almost daily in the UK and almost a year since the referendum, what is the likely impact Brexit will have on ecommerce businesses?
The UK’s recent referendum voted in favour to leave the European Union on 23 June 2016. The UK government is in talks with the EU in preparation for its departure, but where does this leave ecommerce sites? Whilst no-one knows for sure at this stage, as a UK ecommerce agency established in 2006, we can take some educated guesses at likely outcomes.
1. Expect fewer high-value purchases in the short term
The outcome of the referendum came as a surprise to quite a few in Britain (and abroad!), and it has caused a great deal of uncertainty. As such, expect consumers to spend less – and buy fewer high value or luxury items – until the situation becomes clearer.
Source – Digiday.
2. British ecommerce stores become less attractive to EU consumers
Another potential outcome after withdrawal from the European Union is that British ecommerce stores become less attractive to EU consumers. This could be for a variety of reasons, including:
- Delivery becomes costlier. Depending on the degree of Brexit, import duties and other taxes imposed by the EU on Britain may make buying from British ecommerce stores much less attractive to European consumers.
- A potential lack of consumer protection. The EU offers a high level of consumer protection; if Britain decides to withdraw these and widthraw from the EEA, European consumers may be worse off than buying from a closer provider (Source – European Parliament Document; PDF).
3. Currency conversion rates make British stores more attractive
One likely outcome, at least in the shorter term, is that more appealing conversion rates from foreign currencies to British Sterling make shopping online on British stores more attractive to some shoppers, particularly while trade agreements remain in place.
So, perhaps it’s time to consider allowing your customers to pay in Euros and Dollars?
4. Changes in taxation for buyers abroad
It is also possible that Brexit will lead to a revision of taxes for foreign buyers. Luckily, in ecommerce platforms such as Magento, this should be a relatively easy process to change.
This is not to say that Brexit doesn’t offer some opportunity for ecommerce businesses; more appealing currency conversion rates