Despite the end of the Brexit transition period being less than six weeks away, little more than half (54 per cent) of UK retailers believe they are either fully prepared, or will be for Brexit by the end of 2020. These are the findings of new research conducted by global eCommerce services company, PFS.
It’s still unknown if the UK will leave the EU without a trade deal, yet nearly a third (29 per cent) of UK online or omnichannel retailers concede that they are yet to make any preparations at all. That’s despite four-fifths (79 per cent) admitting they will be impacted by any cross-border effects of Brexit.
The impact of a no-deal Brexit could be devastating, with two-thirds (67 per cent) of respondents believing it could cause an order backlog in the first quarter of 2021. More than half (56 per cent) say these delays would be related to sending goods to customers in the EU from the UK, whilst two-thirds (67 per cent) believe they will feel an impact when importing products from EU suppliers.
Ensuring a smooth transition
So far, only a third of retailers have assessed or implemented new technology to increase supply chain efficiency (37 per cent) and have done, or are in the process of integrating inventory and order tracking software (36 per cent). A similar number (33 per cent) of retailers have split or will be splitting their inventory to base fulfilment in the existing UK and European facilities. When it comes to ensuring that retailers’ finances remain uninterrupted by the close of the Brexit transition period, less than half of them report that they are or will be implementing three of the most important steps, taking into account the new rules that will come into force from 1 January 2021.
Just two-fifths (44 per cent) of the survey respondents say they have set up, or are setting up, an Economic Operators Registration and Identification (EORI) number to move goods between the EU and UK.
The same is the case for the setting up of Merchant of Record services for VAT management and reporting (43 per cent). Furthermore, only 39 per cent have implemented or are implementing a new fraud management system, potentially leaving them in breach of guidelines.
Maintaining customer satisfaction
Two-thirds say they are preparing for an order backlog early in 2021 (67 per cent) and expect delivery times will be longer than they are currently able to promise customers (65 per cent). More than half (55 per cent) said their contact centres are not adequately resourced to handle the anticipated increase in customer complaints about delivery delays in January 2021. The same number of retailers (55 per cent) will not be able to handle an upsurge in returns that are not related to Christmas.
Strikingly, a third of respondents (34 per cent) already anticipate an increase in customer complaints during the first quarter of 2021 as a direct result of Brexit. To manage these concerns, 40 per cent plan to proactively notify customers about delivery delays and reduced stock availability.
A new approach required
UK retailers are also expecting to see a change in consumer behaviour in 2021. 43 per cent expect their UK customers to shop with more UK-based brands. As a result, 35 per cent have said they will focus on building a UK customer base.
Joe Farrell, VP of international operations at PFS, comments: “The retailers that are putting measures in place now, such as using multiple distribution points across the UK and the EU to get goods to customers on time, will survive and thrive post-Brexit. Retailers operating in the UK and Europe should also look to third-party fulfilment providers to help ready their supply chain. By reviewing where their customers are located and determining how inventory should be dispersed across the two regions, retailers improve their chances of getting products where they are most needed and maintaining vital customer satisfaction levels.”
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