A recent survey of major UK retailers found that delivery regulations are seen as the second largest barrier to international growth. When asked what the biggest concern was when entering a new market, 28% answered ‘delivery’ which was only surpassed by ‘tax & duties’ at 36%. The survey focused on major retailers, those earning over £1m in turnover, and the potential opportunities and pitfalls that surround international trade over the next two years.
The same survey focuses particularly on the international opportunities available to UK retailers. With Brexit uncertainty persisting, many retailers are considering other, non-EU markets as destinations for future growth.
Change in Delivery Strategy is a Must
Brexit has continued to cause more confusion among businesses, with key details such as trade agreements and other business legislations still waiting to be clarified. Whilst the UK government wants to assure a smooth exit from the European Union, the lack of strategy is forcing businesses themselves to prepare for the worst-case scenario. This situation is undesirable for almost all international companies in the UK as the EU, despite Brexit, has steadily remained the UK’s largest trade partner. In 2017, 44% of all UK exports were to the EU. Whilst this is a decrease from around ten years ago (55% in 2006), that figure has gone up since the EU referendum in 2016, when the EU accounted for 43%.
Regardless of the short-term uncertainty regarding Britain’s trade arrangements with the EU, the long-term future will undoubtedly be different. The survey report outlined the importance of all companies trading to the EU to perform a detailed evaluation of their delivery chain. It is vital that businesses are in constant, detailed contact with their delivery partners regarding any future problems that could arise. It is likely that any deliveries to the EU post-Brexit will take longer and cost significantly more than previously. Therefore, whilst it might feel impossible to plan for something that is not outlined, it is important corporations put some mitigation in place.
International Opportunities Post-Brexit
As previously mentioned, the report also highlights the importance of considering different international markets. By designing and implementing international trade plans now, some of the problems that will arise with EU trading can be mitigated by other revenue streams. Our trade relations with non-EU countries provide relative stability that can be built upon for long-term growth. However, many companies still appear to be disinterested by markets further afield.
In 2017, eight of the ten biggest markets for UK exports were in the EU or EEA, with the USA (first) and China (sixth) the only outliers. This is despite only three of the top ten largest e-commerce markets – the UK included – being in the EU. The report also notes that the number of UK SMEs trading internationally has dropped considerably in the last two years, perhaps as a result of domestic economic uncertainty. This shows that there are potential markets that can be targeted by businesses, particularly when the weakening pound sterling, a positive noted in recent manufacturing export reports, is taken into account.
Help to Refine Delivery Strategies
The report outlines many different restrictions and worries faced by global traders. Many retailers highlight the costs of managing external carriers, especially when using multiple outsourcers for different markets. Other customer experience issues, such as local delivery habits and international returns policies, all add to a list of expenses that can often be allowed to grow unnecessarily when secondary costs such as technology are included.
Here at ERA, we have been helping major companies to reduce distribution costs for many years. Our experts can focus on a range of cost areas, such as couriers, international distribution and pallet networks to help you streamline your delivery chain, both in the short and long-term. With Brexit on the horizon, now is the perfect time to evaluate your delivery mechanisms, and our dedicated team can make sure you save on any future arrangements. If you are interested in seeing what our experienced delivery team could do for your procurement systems, why not get in touch with us today?