Brexit, one year on / 138 Crediting the omnichannel sale

SEPARATE WAYS

It’s one year past Brexit, and while the UK has not yet experienced the dizzying highs nor the dystopian lows that were foretold, businesses have had to contend with new trade barriers, price rises, staff shortages, delays and more. Arguably, a good deal of this disruption can be attributed to Covid-19, writes Paul Farley – but is it possible to disentangle the two?

SUPPLY AND DRIVER ISSUES SEEM TO BE A WORLDWIDE

PROBLEM

On 31st December 2020, the year-long transition period that followed the UK’s departure from the EU ended, together with the nation’s membership of the single market and customs union. After four-and-a-half years of countdowns, negotiations and extensions, Brexit was finally – in Boris Johnson’s words – “done”.

Overshadowed by a surging pandemic, it has been difficult to tell how life, and business, have been impacted by this new status quo.

Last summer, the Financial Times reported that almost a third of British companies trading with the EU had suffered a decline or loss of business since the post-Brexit rules took effect on 1st January – and that 17% of them had stopped — either temporarily or permanently — since the start of the 2021. In November, The Independent reported that Brexit had hit UK/EU trade in Q221 to the tune of £17b – with trade with the rest of the world during that period up just +1% – as new costs and red tape made their mark.

Arguably, a lack of HGV drivers and European workers, delays at the ports and a greater reliance on local manufacture could be more symptomatic of a pandemic than any fresh political direction – but, following the Chancellor’s autumn Budget statement, the chairman of the Office for Budget Responsibility, Richard Hughes, was more specific in his attempts to disentangle the two, stating that the long-term impact of Brexit on the UK economy would be worse than the pandemic’s, reasserting the office’s assumption that leaving the EU would “reduce our long-run GDP by around -4%” while the effect of the pandemic would reduce that GDP output “by a further -2%”.

With no clear answer in sight, Furniture News asked several members of the trade to reveal how they felt Brexit had impacted their businesses, one year on – and whether it was possible to set this apart from the pandemic which has overshadowed it …

This month’s panel, clockwise from top left: Steve Adams, Mike Whitman, Royce Clark, Wendy Martin Green, Dids Macdonald, Peter Harding, John Northwood and Steve Pickering

(image credit 123RF.com/jegas)

Steve Adams, Mattress Online: It’s hard to pinpoint how Brexit is directly affecting the rising costs of components and the wider supply chain challenges against the Covid impact. In real terms the effect on Mattress Online appears to be minimal – we source very little from the EU, and our suppliers who do are navigating this unpredictability very well. Additionally, we have the benefit of a relatively long purchase cycle, which means pricing sensitivity with consumers is minimal. We increase our retail price accordingly to retain margin – arguably, we undervalue the price point of a good night’s sleep to consumers.

Mike Whitman, Iconography: We’ve been fortunate, as our trade is almost entirely digital, but we have had to spend a lot of time supporting our clients through successive price changes over the last few years.

Royce Clark, Grampian Furnishers: This is an extremely difficult one to gauge, given that Covid has been a bigger factor, with businesses being forced to close, and lead times and pricing being more severe. Initially there was a bit of a delay on goods arriving and general uncertainty over supply from Europe, but that was short lived – there have been price increases, but these have been fairly insignificant in the grand scheme of things. Cost of delivery from Europe has not increased tenfold!

THE MAJORITY OF ISSUES ENCOUNTERED CAN BE ATTRIBUTED TO THE PANDEMIC

Wendy Martin Green, Peter Green Furnishers: The truth of the matter is that Brexit does not seem to have affected our business as much as we had feared. I can only think of one company in Ireland that we cannot buy from now because their prices have increased outside of our range, but we soon found some other UK suppliers to make up for that loss.

We need drivers right now, and I understand there is a lack of drivers in the UK – I was also told that many of the drivers went back to their native countries when Brexit finally took place and this is what has caused the shortage. However, the proof of the pudding is in the eating, and we advertised on Monday this week for a driver, and hired a very nice young man by Wednesday. I am also not entirely sure if the driver ‘drought’ is a Brexit problem, as the US and Australia is experiencing the same thing – the same goes for supply issues, they also seem to be a worldwide problem and not a result of Brexit.

We also managed to maintain all of our overseas staff who all got their paperwork in order ready for the withdrawal from Europe and therefore were able to stay with us.

Prices have gone up for us, but this is related to the increase in shipping costs for parts and goods from the Far East and not, we feel, caused by Brexit. Overall, the cost of goods has increased on average +7-10%, but this is nationwide, and the market seems to have withstood that … and the increase does not seem to have deterred customers.

Last year’s petrol crisis is seeming to be more about panic buying, and it did not disrupt our deliveries at all. The current slowness in the supply chain also appears to be a result of the Covid situation that disrupted production of goods all over the world.

If my assumptions are correct, I would have to say that, as yet, we have not really been impacted by Brexit very much at all, outside of some frustrating paperwork at the beginning to arrange shipping relationships and the all-important EORI number! I do, however, feel that the hesitance of some customers to spend money pre-Brexit was lost with the ‘do or die’ sentiments brought on by the pandemic, and at the moment our customers seem willing to spend their hard-earned pounds on furniture for their homes.

Steve Pickering, Sussex Beds: I cannot say with certainty that Brexit has had any direct or significant effect on our business over the past 12 months. Additionally, I cannot say there has been any direct or significant positive impacts from Brexit.

I do feel the majority of issues encountered can be attributed to the pandemic, as supply line issues are a global problem caused by unprecedented demand for goods driven by the reopening of economies from lockdowns. Pent-up demand, combined with huge sums of support capital pumped into global economies, results in far more demand than available capacity, causing the shortages in goods and skilled manpower.

John Northwood, trade agent: With the current situation with the pandemic and Brexit, it is difficult to say what has been directly affected by Brexit alone. However, one area is obviously the import duties and taxes that now have to be paid. This has made a considerable difference to freight costs.

Peter Harding, Fairway Furniture: In my view, had Brexit come along on its own, some 10 months down the line we’d be through any of the major impacts and be sailing merrily onwards as a country. However, the pandemic came along and so, to a degree, no, you can’t separate the two.

HAD BREXIT COME ALONG ON ITS OWN, 10 MONTHS DOWN THE LINE WE’D BE THROUGH ANY OF THE MAJOR IMPACTS AND

SAILING MERRILY ONWARDS

But I think it is possible to draw a few conclusions: we would have seen some disruption to the supply chain, but it would have been relatively minor; as a country, we’d have seen some of the migrant workers return home as a result of Brexit, but nowhere near as many as did when the pandemic started to grow in its effect; most of our European suppliers have been pretty well organised – there’s been a steep learning curve, but we haven’t had any major problems; and the last vestiges of what Brexit disruption there has been are probably still going to rumble on into 2022.

From our own point of view, we haven’t suffered any significant problems. There were early issues with paperwork and the way that various suppliers on the continent handled it, but that has settled down now.

Dids Macdonald OBE, ACID: It has affected designers in general because they have lost vital unregistered Community design protection. They have also been left more vulnerable because the Government has not clarified its position on simultaneous publication. So, if you are launching a new furniture range in the UK and then in, say, Germany, and you are relying on unregistered design right, it will not have EU27 protection

(photo credit 123RF.com/nightman1965)

WHO GETS CREDIT FOR THE OMNICHANNEL SALE?

Retailers are constantly being inundated with terms like ‘omnichannel’, the harmonious joining of the traditional retail store and all things online. But, says Jesse Akre, global president and COO of award-winning, cloud-based PoS provider RetailSystem, without ‘the omni’, retailers are not setting themselves up for success …

EVEN WITH THE RIGHT TECH, THE PEOPLE BEHIND IT ARE RETAIL’S REAL DEAL – WITHOUT

THEM, NOTHING WILL HAPPEN

By JESSE AKRE www.retailsystem.com

but who should benefit? (image credit iStock.com/DNY59) Retailers can dangle the incentive carrot to achieve desired behaviours,

I often get asked about all the musthave retail technologies that make this happen – yes, websites, EPoS, kiosks … all are must-haves in the omnichannel (shameless plug – visit RetailSystem.com).

But even with all the right tech, the people behind it – the enablers of traffic and all things revenue and service – are the retail real deal. Without them, nothing will happen.

So, all those people, and the impact they have on the success of your retail business – who gets credit for the sale?

Before I dig in, ‘giving credit’ (most often financially) is a very tricky landscape. I am not advocating dropping a ‘new plan’ on your organisation (although maybe you need to), nor am I blind to the retail owner trying to make their revenue go 110 ways.

But retailers dangle the incentive carrot for desired behaviours, and it is different today. I hope you read this and really think about that one next thing you can do to better drive your business. Let’s start with that …

So, in the omnichannel retail environment, who gets the credit for the sale? Let’s break down a couple of regular scenarios.

Two people are involved in the sale. Was it the first person, who spent hours lining up the perfect items for the customer? That ‘set-up’ person. Or was it the ‘closer’? That skilled negotiator that addressed the final concerns/questions when the customer came back?

As a retail owner, the revenue bell rang. Yet from a sales effort perspective, both contributed. Naturally,that is a split. A fact of retail life as we know it.

Fun isn’t it?! We are just getting started …

Now enter the world of the digitally influenced sale. Maybe it was an ecommerce order. Maybe a social commerce sale. Maybe it was an instore ‘close’, with the customer doing all their research on your website first (the digital equivalent of the ‘set-up’ person above), yet the consumer electing to come in-store to do a physical validation of the product and you as a retailer.

(image credit iStock.com/PlargueDoctor)

Let’s go one level further. The customer found the perfect sofa on your website, came in-store to validate, and slipped by the craftiest of sales associates, only to go home and buy it on your site. It happens! See the ‘who gets credit’ omnichannel clouds forming?

This has been a never-ending debate since the web in retail became a thing. It is a (fun) mess! The consumer path is no longer a predictable journey. It is not as simple as foot traffic and ‘ups’ in the retail store.

That order, wherever completed, is a result of that matrix path to purchase. A random, consumer-chosen sequence of engagement points, digital and physical. Guess what? Many of your staff make that matrix possible.

All those situations above (and more) absolutely happen. Stop and think about your last purchase, and you’ll understand what I mean. Retailers today must think like a consumer,

THE CONSUMER PATH IS NO LONGER A PREDICTABLE JOURNEY

and understand how those retail magicmakers – the floor staff, the web team, and all the staff that have that bundle of responsibilities touching all parts of your business – make it happen. They all impact the sale. Some more than others, yes – but one could say retail sales have the best chance of becoming a sale if all do their part to make it happen. They should all get credit (fun!).

Is there a perfect ‘who gets credit’ answer? That perfect solution? A onesize fits all?

I don’t think there is (deep sigh) – but there are things retailers can do to find ways that work for your business. You just need to be willing to make change, and turn that willingness into continuous improvement steps.

It is never perfect. It is never done. Be forewarned, there will be resistance – but you know this. Remember, it’s a consumer journey matrix with levels of murkiness that must be considered. The crossing of the threshold back and forth between physical and digital is impossible to track with absolute clarity. But if you make ongoing efforts to connect the dots – you should find ways to engage all members of your team($).

Are we having fun yet?! Come and visit us at the January Furniture Show this April to find out more …

of the customer’s journey (photo credit iStock.com/Prostock-Studio) A purchase may be made in-store, but it is not necessarily the only touchpoint