Why is Brexit important for eCommerce managers in Ireland? There are a raft of unanswered questions with regard to the detail of the UK exit from the European Union. There may be Tariffs, Taxes and technical hurdles for those involved in cross border eCommerce in the future. The Brexit referendum result has had a significant and sustained effect on the EUR:GBP exchange rate and this is a key factor affecting eCommerce conversion rates right now.
What’s the Impact?
The value of Sterling has fallen from a 2016 high of 1.36 EUR on the 6th of Jan 2016 to the current levels of 1.16 EUR. This is having an effect on the competitiveness of Irish e-Tailers.
All of your recent work on website speed optimisation, caching, user journeys, and basket value optimisation, while important, may be overshadowed by the effect of drop in the value of Sterling.
- For Exporters to the UK
Exporters are either less competitive (sites who have dynamic currency rate conversion) or less profitable (sites who have fixed sterling prices).
- For Domestic Retailers
The cost of purchasing from your competitors in the UK has now fallen by up to 15% for the consumer.
My Own Recent Experience
I think there is great value is seeing how people behave in “real” purchasing cycles. There is no better user tester than the motivated purchaser! I was recently looking for a new cooker for my boat as the ancient cooker I had on board had finally given up the ghost! As a general rule I like to support the local chandlery. I value the convenience and expertise they provide and like to buy local where possible. In this case I visited the chandlery, chose a cooker and went back to the boatyard to double check the width available to me in the galley…
After I went back to confirm the size I went online (on my phone) to double check any feedback/ reviews of the cooker and quickly discovered that the cooker I was paying €775 for in Cork was available for £479 (roughly €557) in the UK. However that was not the end of the story:
1. What about delivery? I was on a tight timeline to launch the boat for a family holiday. This meant that purchasing locally was attractive as I could guarantee delivery (by collecting it). I looked around online and the first UK retailer wanted £120 to deliver to West Cork which almost put an end to my UK adventure – however, with a little further research I found another online retailer in the UK who offered 2 day delivery for only £16.20!
2. The €775 did not include essential accessories (without which the cooker cannot really be installed) but the £479 price did! The value of these accessories is approximately €40 making the final saving in price a whopping €239 or almost 30% of the price. While I like to support my local chandler I could not justify doing so at this premium.
Here are some of the thoughts I’ve had based on this recent experience:
- Sometimes external factors can impact your e-Commerce performance. eCommerce managers need to be aware of external factors, we’re often so focused on internal site Analytics that we are not paying attention to other factors.
- Price is important! It’s not the be all and end all but a 30% difference was just too much for me!
- Shop around for delivery rates – I found a massive difference (£120 v £16.20).
- If you cannot compete on price you have to differentiate on some other level. The fact that the more expensive item was being sold without all the accessories got right up my nose!
Note: The eagle eyed among you will have noticed the cookers are slightly different. Two points with regard to the difference:
- The cookers are branded differently, however they are exactly the same apart from the logo on the front. Both are manufactured by the same company.
- The Irish website has the incorrect image on it’s product page! This is the painted version rather than the stainless steel cooker I wanted to purchase.