In 2016, the UK voted to leave the EU and, to put it simply, all hell broke loose.
But amongst all the personal opinions and the cold, hard facts of the referendum, there were many questions about what would happen to businesses.
There’s still some time left before the UK officially leaves the EU and economists are still trying to guess what will happen for businesses – both online and in the real-world – once the ties are finally severed. For online businesses serving the UK, European and worldwide customers, there’s been an adjustment period.
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But what about digital product businesses working from the UK and looking to expand? What does Brexit mean for them?
The landscape is still pretty uncertain, but we’re going to touch on some of the main issues eCommerce providers will need to consider.
For many British brands, their so-called “Britishness” has been a key driver in sales. In a survey conducted for The Partners by Lightspeed GMI, around a quarter of people regard a brand’s British heritage as the most important factor in their purchase decision.
It seems like a lot, right?
But it’s not really when you see what other deciding factors people place emphasis on in the buying cycle: 54% are most concerned with the quality of the product, 36% value decent customer service, and 29% care about the brand’s culture and morals. So even though Britain has a big question mark above its head, it’s safe to say that the “Britishness” of a brand isn’t that important anymore. Which means it’s the perfect time to take your online business global.
Going global is on the list of many online businesses – and for good reason. Opening up your business to different parts of the world gives you direct access to a much bigger audience while having the chance to monopolise your industry in certain countries.
But how can digital product businesses go global quicker? Well, most online payment solutions now provide the option for customers to pay in a different currency.
Let’s look at an example: say there’s a UK-based customer who wants to buy your product. They look at the price in GBP and decide it’s too much, but when they look at the price in USD with the current exchange rate, they notice it’s cheaper.
So they buy in USD.
Giving them the option to pay in a different currency will help you retain customers and allow you to reach a wider base of people around the globe (as well as in the UK). For online businesses that don’t have a cross-currency feature, there’s a real chance they’ll lose out on business from the rest of Europe and America, as well as people living in the UK.
And guess what?
Losing customers from Britain will be a real blow for online businesses based in the UK, because it has one of the most developed eCommerce markets in the world – not to mention the highest in Europe – which is why hunting down business in Europe and America is so important in the interim and, most likely, in the long run. According to eCommerce Europe and the eCommerce Foundation, the UK takes the lead in market size, with the highest average spending per e-shopper.
So, if online businesses start losing these customers, the market is going to take a huge hit. This is why it’s more important than ever for brands to take their online businesses overseas.
The Main Change: International Payments
There are plenty of online businesses serving customers all over the world that won’t see much change in the way they conduct their business after Brexit has gone through. Perhaps the biggest change we’ll see as a whole in the eCommerce market is a shift to friendlier payment solutions that easily allow international payments in a variety of different currencies.
Solutions that offer international payment services will come to the forefront, making it easier than ever for customers to buy goods from different parts of the world in their own preferred currency. If exchange rates continue to fluctuate as much as they have, online business owners that decide to go global will be able to steady the storm as much as possible by putting in place a solution that charges fewer international fees.
According to Justin Opie, MD of IMRG, the UK online retail trade association, “The actual impact of Brexit is very difficult to quantify. At the moment we have no idea what trade deals will be put in place or whether shopper confidence will take a hit (or indeed whether that could be short-term or long-term).
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.”
Is Now the Perfect Time to Go Global?
There are more online businesses than ever selling their digital products and physical goods all over the world, and for these companies things are likely to look pretty much the same once Brexit goes through. But for UK-based eCommerce businesses that currently only serve customers in Britain, now is the perfect time to go global.
Along with the inconsistency of the pound against other world currencies, it makes sense to not put all your eggs in one basket. And it’s easy to get started too, thanks to a selection of online payment solutions that allow digital product businesses to let their customers pay in their desired currency. This helps eliminate any unnecessary fees and makes sure people aren’t paying over the odds for the same product.
Whichever way you look at it, Brexit will have an impact on the eCommerce world, and there’ll be shockwaves resonating throughout the world. But for now, it’s unclear whether the changes will be for the better or for the worse. The best bet is for digital businesses to go global as soon as possible so they don’t lose out on any customer.
Will Brexit affect your business and what do you think will happen in the next year? Let us know in the comments on our social media channels.