The Brexit interruption has had a major impact on the UK e-commerce economy: 94% of UK online brands said they have lost EU customers since the end of the transition period on December 31, 2020.
ChannelAdvisor e-commerce platform and research firm CensusWide surveyed 304 chief marketing officers who work for UK brands that sell items online. ChannelAdvisor asked if these brands had lost business due to the Brexit disruptions, such as additional complications from border delays and unexpected taxes. The overwhelming majority said they had lost EU customers – two thirds (66%) said these complications led to a significant decrease in the number of EU customers.
Britain’s post-COVID e-commerce boom
While brick and mortar retail stores may have faced harsh conditions due to COVID lockdowns, brands selling online have thrived thanks to a surge in e-commerce. 92% of brand CMOs say their brand has attracted significant numbers of new customers since the beginning of the COVID-19 crisis, while 82% say their brand has seen higher sales than before COVID-19 – and more than a quarter (27%) say their sales are significantly higher. Only 16% say sales are roughly the same.
93% of brand CMOs agree that they now have more confidence in the future of their brand than they did before the COVID-19 crisis began in March 2020 – around a third (34%) fully agree with this statement.
That bright future for UK e-commerce, however, could be hampered by the Brexit disruption. When asked about total international sales, more than two-thirds (68%) of brand CMOs said that Brexit led to a decline – one in five (22%) said that Brexit led to a significant decrease in their international sales. Only 15% say Brexit resulted in an increase in international sales, while 17% say there was no impact on sales.
The vast majority of brands state that Brexit has caused problems shipping items on time to international buyers. 73% of CMOs said Brexit slowed the speed at which their brand can deliver purchases to EU customers – a third (33%) say it caused a significant slowdown in deliveries.
Even so, the brands are confident about overall global sales growth in the coming year. 91% of CMOs expect international sales to increase in the next 12 months, and a third (33%) say they expect international sales to increase significantly.
“UK brands are experiencing phenomenal growth and will undoubtedly play a vital role in the country’s post-COVID recovery. However, the final months of the Brexit disruption have been a significant headache for the vast majority of these companies due to delays and complications with customs between the UK and the EU. Brands rarely become ecommerce giants without strong international sales, and finding a solution to that border disruption will benefit all parties. Leveraging expertise such as an external logistics provider can overcome fulfillment challenges, or finding new sources of demand could help fill the demand gap. It is now inspiring to see brands looking to the coming year with enthusiasm and confidence. After such a transformative time in the industry, I hope you continue to reap the rewards of e-commerce ”
– Vladi Shlesman, Managing Director, EMEA, ChannelAdvisor