Article

Mike Owen
Mike Owen 26 January 2021

Is Your Ecommerce Brexit Proof?

Brands and supplier manufacturers have much to consider during the Brexit transition. The plethora of new guidelines and specifications will mean additional headaches for any marketing team getting products into the system and onto the market as fast as they can.

Product labelling, marking and new product designations such as price, language and supplier status will all need to be made visible in omni-channel, product, ecommerce sites and in various marketplace references. Can you afford not to take it on-board?

According to the Ecommerce Europe Group, The UK is one of the largest ecommerce markets in the world, with 14.5% of total retail sales now online and those online sales constituting nearly $174 billion.

Compared to their European counterparts, British consumers are far less shy to shop online, spending an average of €3,625 in 2015. 36% of British shoppers said last year that they had bought items online in other countries according to a survey. The next biggest spenders after the British were Irish consumers, who spent €500 less on average.

With Brexit, the importance of clarity in product information to satisfy UK customers from the perspective of both UK and EU brands and products cannot be overstated. There are likely to be changes in the marking and labelling products, safety regulations and pricing influences which will induce additional product information management issues.

Whilst there is likely to be much alignment between what is currently understood as EU standards and what will be UK specific, there will still be a need to modify product information in different ways and particular markets.This will need to be done quickly and efficiently to provide a seamless transition, but it will also add much work for an over-stressed marketing department to optimise Ecommerce opportunities.

Product Marking and Labelling

Products being placed on the GB market for the first time from 1 January 2021 must meet the same technical requirements as before – but labelling or notification requirements may change. There is a new UK Conformity Assessed marking (“UKCA”) which should be used for products placed on the GB market and at the latest for any product placed on the market after 31 December 2021.

Manufacturers and importers can place goods on the GB market lawfully bearing the EU based CE marking where they have been assessed by an EU recognised Notified Body for a further 12 months from the end of the transition period.

Some UK businesses which bring products into Great Britain from an EEA State (or Switzerland) and who were previously “distributors” from 1 January 2021 become “importers” acquiring new legal duties, including complying with an enhanced set of requirements to check product compliance as well as to keep documentation and ensure their address appears on the product.

There is a 24-month transitional period for these “new” importers during which they can put their details on documentation accompanying the product, rather than on the product itself.

Also cosmetic products that have the information of the EU responsible person on the container and packaging will be allowed in the UK market for 2 years starting from 1 January 2021, after which the container and packaging will need to bear the name and address of the UK responsible person.

The EU will not have a transitional period and so cosmetic products manufactured in GB but being exported to the EU (or supplied in Northern Ireland) will need immediately from 1 January 2021 to have the address of the relevant EU/ NI responsible person on the cosmetic products.

The EU does not recognise conformity assessment by UK approved bodies for the purposes of CE marking and placing on the EEA market. However, conformity assessment by a UK body is recognised for the purposes of the NI market, in which case the product should be marked ‘CE’ and ‘ UKNI’.

As a result, product specifications must include the right information, guidelines and in the right language, to be present in specific markets.

Changing Roles of Suppliers and Product Compliance

Organisations may have to think about their roles as importer, and distributor and consider whether they have new duties. For example, before 1 January 2021, if a business in GB supplied a GB retailer with a product supplied to them from Germany, it did so as a ‘distributor’ within the EU single market when the UK was subject to EU rules. After 1 January 2021, this same GB business now fulfils the role of an ‘importer’, with the corresponding duties. 

In most cases the role of importer carries greater responsibilities including complying with an enhanced set of requirements to check product compliance as well as to monitor compliance and retain technical documentation and ensure their address appears on the product.

If the importer imports the article from an EEA state and places it on the GB market before 31 December 2022, the importer can set out the identification information (name, address etc) on the packaging or in a document accompanying the article.

Where the manufacturer follows GB rules and affixes a UKCA marking, the manufacturer must draw up a Declaration of Conformity setting out the (UK) enactments with which the apparatus is compliant. Where the manufacturer follows the EU rules, they must draw up an EU declaration of conformity and make sure that that and the technical documentation is prepared in or translated into English.

Brexit will also have a strong impact on the European supply chains as components sourced throughout the continent become more expensive and harder to come by.

Opportunities in Marketplaces

Online retailers should broaden their international reach by registering on more international shopping channels since the weaker sterling will mean an increase in foreign purchases. If you’re not selling in the US, it’s time to implement it! (The US is the second-largest market taking 11% of the UK’s exports, totaling: $51B)(source: OEC).

You don’t need to have a store in the UK to register on Amazon Germany, for example, and you can easily create data feeds for international channels.

Online campaigns can be further optimized. That means improving product titles, adding custom labels, removing under-performing products and keeping a closer eye on campaign analytics.

There will be a big challenge for ecommerce practitioners to control the fluctuations in the value of the pound as politicians figure out the new relationship between the UK and the EU. There will be a need to make sure that VAT costs are transparent so shoppers know what they are paying upfront.

This will prevent consumers from abandoning shopping carts before payment. International companies exporting to the UK and/or the EU will need to adjust their shipping and selling policies to account for the new reality of the UK and EU being separate economic entities and will have to abide by new regulations and be prepared for additional taxes, tariffs and duties.

Dealing With the Complexities of Brexit

Several large retailers like Sainsbury’s, Asda and Waitrose have announced that fast moving consumer goods could be facing major disruption and delays due to Brexit, which could harm the development of their ecommerce potential. Adjusting the supply chain is just one of the factors of adapting to a new commercial set-up.

Customers will also want there to be a seamless transition by major brands in an omni-channel context. In order to keep the complexities of new product information, language specific, further regulatory requirements and pricing under control, companies like Sales Layer and Stibo Systems offer sophisticated product information management (PIM) tools.

Their capabilities allow for faster collation and curation of product information from suppliers whether they be in the UK, in the EU or outside of the EU. Centralising product information allows greater accuracy and ability to distribute relevant and language specific information to customer ecommerce sites and other touchpoints simultaneously and in real –time.

Consistency in delivering compelling product information allows better efficiencies in the marketing process, delivering faster time to market and better sales. 

PIM tools also offer greater access to international marketplaces through integrated APIs for retailers such as Amazon and eommerce entities such as Shopify, Magento and BigCommerce. In this way products can be easily updated for Brexit compliance changes when selling in different countries. 

For many companies Brexit will mean a reset to many processes but accuracy in product information will be fundamental to the continual success of brands and their ecommerce strategies.

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