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Brexit – one week on

It has now been a week since we found out that the UK had voted to leave the EU.

It would therefore be tempting to begin this article by saying ‘now that the dust has settled’ but there are still so many unanswered questions that quantifying the likely impact of Brexit is impossible – at the moment we have no firm date for submitting the official confirmation of our decision to the EU, what the timeline for leaving will be, what trade deals will be put in place, who the prime minister will be, whether there will be a second referendum…

The list goes on. Of most immediate interest to retailers though is whether shopper confidence will take a hit (and, if so, whether it will be short- or long-term).

So there is still a lot of uncertainty, and there are no definite answers – but what do we know so far?

One obvious area that will need to be addressed concerns the regulations governing cross-border trade into EU countries, which are currently covered by EU legislation such as the consumer rights directive and data protection directive. The fact is Brexit may have a deep impact for online retailers or it may end up just seeming like business as usual, with a few minor tweaks.

The uncertainty generated obviously led to sharp fluctuations in economic measures such as the currency, but again how short- or long-term these impacts will be remains to be seen. 

The most important thing now is that we accept the result, like it or not, and start debating how industry can move forward successfully within this new reality in a pragmatic way. 

And so to get the debate started, we asked some of our members for their views on the potential impact of Brexit:

Richard Asquith, VP global indirect tax, Avalara Europe: “The Brexit outcome necessitates a new VAT compliance landscape for ecommerce businesses trading overseas. From the loss of intra-community trading status to the potential introduction of various non-tariff ‘frontier costs’ to costs of exporting into 27 EU states, businesses will need to understand obligations and complexities for their financial systems.” (further analysis:  http://www.vatlive.com/european-news/uk-leave-eu-vat-regime-brexit/)

Zbynek Loebl, CEO, Youstice: “I am Czech. When Czechoslovakia split I considered it our failure that we didn’t manage to keep the country together – now however, there is zero nostalgia. This is an uncertain period, but my hope is the same happens between UK and EU over the next few years – to become the best neighbours.”

Dan Cohen, Regional Director, Tradedoubler: “Talent: UK businesses, especially internationals without a physical presence in a European country, need to concentrate on retaining and attracting talent. Consumer behaviour: I don’t think users will stop buying but the way that they shop might change. Understanding real-time buying behaviour to tailor marketing activities and optimise sales will be key.”

Caroline von Renteln, Director International Business, Omikron: “I live in Germany. The whole continent is watching and observing the UK because you are leaders when it comes to ecommerce technologies, fast-moving changes and breakthrough innovations. If I was working for a UK business I would focus on retaining a strong customer base and try to take the anxiety away from the consumer.”

Nir Debbi, co-founder and CMO at Global-e: “New trading agreements might make cross-border sales processes more complex for both UK retailers and EU-based shoppers. The introduction of customs duties and taxes plus the additional handling could be off-putting; British retailers must be ready to react to the new legislation and head off the impact this could have on the overall online shopping experience for cross-border customers.”

Patrick Wall, CEO at MetaPack: "At first glance it might be thought that cross-border ecommerce is at the mercy of forthcoming complex trade negotiations. This need not be the case. Future trade agreements must protect consumers’ access to an open European ecommerce market and MetaPack are fully committed to ensuring that this happens."

We’ll be keeping you up-to-date on the likely impact of Brexit as it becomes clearer over the coming months (and, perhaps, years).

 

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