The result of the EU referendum came as a genuine surprise to many – including those campaigning most vociferously to leave. Less surprisingly, the outcome has left British business in a state of flux, writes Paul Galpin, managing director of P2P Mailing. The value of the pound has see-sawed since the vote and each passing day delivers headlines of major corporations re-locating or considering their UK future.
For UK retailers despatching overseas – to Europe and beyond the result has raised many questions and concerns. However, does Brexit really spell doom and gloom for retail fulfilment? It was recently reported that Asos expects to benefit from the fall in the pound’s value after the UK voted to leave the EU because sterling’s slide has made its clothes cheaper for US and European customers. Whilst there will undoubtedly be turbulent periods ahead, it is vital for retailers to take stock and consider the factors that will most likely affect the performance of retail fulfilment.
Despite the current turmoil, delivering real change to the way UK PLC conducts business will take time. Once Article 50 of the EU Treaty is formally invoked, the expectation is that leaving will take two years. So what do retailers do between now and then? From our own position as an expert in facilitating the movement of goods from the UK across the globe, we see a number of immediate points for consideration.
The value of the Pound against the Euro
For retailers, a weaker Pound is actually an opportunity as it will make British exports more competitive against their European and US competitors. As highlighted by Asos, retailers have already anticipated an increase in volumes to not only the EU but worldwide just in the last few days due to the weaker pound. Immediate impacts on the markets and currency fluctuations will inevitably settle down, and new levels will found, enabling businesses to forecast more accurately.
Support is at hand
Retailers will need expert advice and support on navigating any different export regulations and trading terms with Europe. Companies like P2P Mailing have built their businesses on advising and supporting retailers on parcel delivery to the EU and the wider world. There is the possibility but not necessarily the inevitability that the picture will get more complex as the UK’s exit takes shape. Tracking any changes and plotting the best course takes time and expertise – retailers cannot afford to make the wrong choice.
Whilst the EU is an important market for the UK as a whole, there are key emerging markets outside of Europe that present significant opportunity. We are seeing massive interest from retailers in markets such as Russia and China and the logistical challenges of entering these markets are minimized with innovative tracked-delivery solutions. Other emerging markets such as Middle East and South America are equally accessible to UK retailers – why limit the customer-base to the EU?
Clearly, there is considerable uncertainty at present and how long this continues will depend on a number of factors. But amidst this short-term anxiety, retailers such as Asos are looking expectantly to the future. Analysts suggest that the focus will be to eliminate the risk of the European situation by creating new relationships both within Europe and with other markets globally. Forward-thinking businesses are already positioning to be at the front of the pack.
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