Writing for Business Advice, Jeremy Cook, chief economist at payment platform WorldFirst, helps small high street retailers grasp online exporting opportunities and establish themselves internationally.
Small UK retailers are at a critical juncture. We stand at the brink of Brexit and, without the certainty of our EU trading privileges, the need to expand horizons has never been greater. The good news is that the opportunities are out there for bricks and mortar retailers to take the leap across borders – it’s just a case of taking the right first steps.
Gripped by fear in 2017
Admittedly, while there are opportunities ahead, 2017 was tough for any retailer looking forward. We regularly take the temperature of UK small retailers via our Global Trade Barometer survey, and it hasn’t been pretty for a year or more.
Fears of inflation, currency volatility and negative consumer confidence have all conspired to see businesses take a step back from the border. In fact, the number of retailers trading abroad decreased from 77 per cent in Q4 2016 to just 35 per cent in Q3 2017. We estimate that around 86,000 SME retailers stopped trading internationally in 2017.
The malaise of a year of uncertainty has meant the percentage of businesses that expect to grow internationally in the next year has remained low (12 per cent in Q3 2017) in comparison to overall UK growth expectations (30 per cent).
The obvious question is: why? It seems a fear of the unknown continues to hold UK businesses back. Although challenges clearly exist, there is an unparalleled opportunity to reverse these trends and expand their international horizons.
As an example, a recent study by Standard Chartered Bank found that Britain has more prospects in increasing trade with countries such as India and China than any other G7 nation. Its research suggested that Brexit would lift the value of UK exports to seven emerging markets by more than £12bn each year.
So fear aside, the potential to begin trading abroad is clear. But how does a small bricks and mortar, UK-based retailer begin selling their goods abroad and grow their online footprint?
Ecommerce can make exporters of retailers
One consequence of the digital revolution has been the rise of global marketplaces where consumers are not bound by borders or constrained by geography when searching for the goods or services they require. Online marketplaces like Amazon and Rakuten have opened up a world of opportunities where any business can trade across countries and continents.
Of course, many small retailers are sole traders or family run; big on ambition but light on staff. They are already their own accountant, tax planner, shipping and logistics operator and customer service adviser. But that doesn’t mean they can’t become international traders – all you need to become a global exporting powerhouse is access to Wi-Fi and an Amazon account.
Marketplaces provide access to markets that would not normally be within reach and they have readymade infrastructure to help you get set up. Amazon and eBay are the preferred platforms for UK sellers, with 61 per cent selling on eBay and 44 per cent on Amazon.
For example, British businesses are able to offer their products to customers on all of Amazon’s European websites – Amazon.co.uk, Amazon.de, Amazon.fr, Amazon.it and Amazon.es – from one single account.
This isn’t a dream, it’s a reality for many. A recent study by WorldFirst found that SMEs selling online contributed a staggering £11bn to UK exports in 2016, set to rise to £21.3bn by 2020.
As former university housemates, Sarah Goodwin and Millie Wilson knew there was only one business idea they wanted to combine their talents to realise – bringing Mexico and the UK together over a glass of Mezcal.
Where to begin in becoming an online exporting powerhouse
Many of the lessons retailers have learned from running a bricks and mortar shop are applicable when selling wares around the world online.
Understand the importance of getting your products in front of more people
Amazon is a search engine just as much as a marketplace so do your research on SEO factors to make sure your product ranks high enough when people search for your products
Customer reviews are a powerful marketing tool
Try to encourage reviews from customers especially reviews including media, product pictures or descriptions of usage. Positive reviews can build trust with prospective customers and are a stamp of credibility when you are still building your profile.
Don’t ignore the finances
Selling internationally brings an additional challenge of managing your business across multiple currencies and the cost of sending money abroad now directly impacts your bottom line.
Services such as WorldFirst’s World Account to solve this pain point for online exporting, allowing business owners to open accounts, send, hold and receive funds in multiple currencies all from one easy platform.
Do not be too broad in your offering
Sometimes focusing on a niche service or selling one or two lines of product can give you the competitive advantage online.
Know what you are saying and who you are saying it to
Market research will have identified the areas that you are targeting but you need to know how the local competition is viewed.
Do they trade on price or service? On exclusivity or by being for the common man? Saying what you want to say in English may be very different to saying it another language.
Opportunity in technology
There are many reasons to remain optimistic. British goods and services are now cheaper than they have been in recent memory – GBP is still down around 14 per cent against the euro compared with the day before the EU referendum vote – and the demand from the rest of the world for products “Made in Britain” shows no sign in slowing.
Small UK retailers have a real opportunity to plug the export gap and in the process create a new breed of mini-multinationals by taking advantage of the technology we have at our fingertips.
It’s a case of looking past the negative headlines and focusing on the potential. So get online, raise your stand and begin trading – there’s never been a better time to go from bricks to global clicks.
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