Cross-border order volumes at record high following Brexit
The volume of online retail orders being sent cross-border was at a record high for July, according to the latest data from the IMRG MetaPack UK Delivery Index.
For the second month running, the proportion of orders leaving the UK was recorded at almost 27% – the highest percentage for June and July in the five year history of the Index. Usually around this time of year we would expect to see cross-border volumes account for around 23% of the total.
July represents the first full month of data we have had since the EU referendum result on 23 June and since then the value of sterling has fallen sharply against the euro and dollar, making products on UK retail sites attractive to foreign shoppers in Europe and the US.
Last month we recorded a sharp drop in cross-border average order values, as shoppers took advantage of the relative strength of their currencies. This month we have seen a recovery, although it is still below where we would expect it to be.
Andrew Starkey, head of e-logistics, IMRG, said:
“While it’s hardly surprising that cross-border volumes have risen since the Brexit vote, the question is whether this upturn in orders will be temporary or sustained over a longer period. As the July average order value has risen on June, we might surmise that shoppers initially used the opportunity to snap up a bargain or two, but are now realising that the deals are very attractive and are loading up their baskets with more goods each visit. While this upturn is good news in a way, clearly there will be pressure on margins due to all products being discounted for cross-border shoppers, in effect.”
Kees de Vos, chief product officer at MetaPack, said:
“July is usually a month in which retailers enjoy a mini-peak in sales, but the impact of Brexit on shopper confidence is now being felt. The increase in order values from EU consumers snapping up bargains thanks to the drop in Sterling is welcome, however. We expect that over the next few months we’ll see a return to much greater volume growth, ensuring that forecasts for the year are met.”