PARTNER, MAZARS IN THE UNITED KINGDOM
"With the right professional advice and a sound digital strategy, an enhanced digital presence is transformative..."
How do you foresee new and innovative technologies positively and/or negatively impacting smaller online retailers and/or entrepreneurs in the UK?
From my experience, technology is the most significant disruptor across all sectors. However, many smaller companies have been slow to embrace technology and therefore they aren’t reaping the vast benefits that it can bring. When it comes to digitalization and implementing new systems, my clients often worry about the costs of investment, whether they have the staff with the required skills and the cost of maintaining systems. These items certainly require consideration, but for many, the return on investment will justify the cost. With the right professional advice and a sound digital strategy, an enhanced digital presence is transformative – it opens up new markets, improves connectivity, provides a better understanding of their customer and ultimately drives top and bottom line growth.
What are some of the main challenges you see for small- to mid-sized online retailers in the UK?
On a daily basis, we meet with businesses who have great products, talented management teams and a modern infrastructure, but they are are just not achieving the performance levels necessary to compensate for the risks and effort involved.
Many of these businesses are stuck in a rut, as the time taken up managing the day-today challenges leaves them with little time to focus on long-term strategic planning. Some of the areas where small and mid-sized businesses tend to fall down include:
A lack of clarity and alignment on overall purpose and goals
A lack of formal and long-term strategic planning
Quite often, value drivers and KPIs are not identifie and tracked
Sometimes investments are made without a robust appraisal process so that expected returns are not quantified or tracked- or sometimes the investment isn’t made at the right time
Some companies find it difficult to be agile so that they are unable to reposition their product to make it more appealing to the changing market or changing customer preferences
The best performing companies are those who make the time to stand back and critically assess the strategic direction of their business over the next 3-5 years. Ultimately, business owners need to make the time to work ‘on the business’ as well as ‘in the business’- however, this is a difficult balance to achieve. This is our focus at Mazars. We fully acknowledge that our clients are experts in their industry or sector. So, what we aim to do is bring our business expertise, insights, tools and methodologies and partner with our clients to help push them out of the rut.
The external perspective and ongoing support and advice that we provide helps our clients to take their business to the next level by realigning their focus onto the long-term.
In what ways do you think e-commerce in the UK for small- to mid-sized companies will be impacted by Brexit, both in the near future, as well as
in the long-term (5-10+ years)?
1. Employees: Ask most CEOs what their key asset in their business is, and they will say it is their human capital. With Brexit, we are going to see a change in how businesses operate and where they operate; we have already seen and heard there are going to be issues from an immigration perspective, but we are uncertain in regards to what they are going to be. Does it mean non-UK nationals currently in the UK will have to apply for permits? Will people who are here before a certain date be accepted and not have to apply for permits? The answers to these questions will determine how easy it will be in the future for UK businesses to attract talent. I am sure that the way these businesses recruit will change as well.
2. Supply chain: The e-commerce segment is fundamentally underpinned by supply chains and global logistics. Brexit will mean changes in trade barriers which in turn could place significant new tariffs, charges and restrictions on logistics companies. However, this could also represent opportunities for online businesses as new supply chains emerge and companies are able to purchase their inputs from cheaper markets. The UK may decide to lower or even remove tariffs and charges which were previously imposed by the EU – thus resulting in a boost to the UK competitive position. So, although again there is uncertainty, it may also represent an opportunity.
3. Regulatory and legal: The third item is in relation to the regulatory and legal side, particularly the issue regarding intellectual property. At the moment, UK companies that have intellectual property enjoy the benefits of having patents which are registered and protected by EU legislation. This is another area for consideration.
As for 5-10 years, in truth that is anyone’s guess! My advice would center around focusing on the known variables at this point in time and then planning for the long term once we have improved visibility.
Regarding business planning strategies, what are the 3 most important pieces of advice you would give to a foreign online retailer attempting to enter the UK ecommerce market?
1. Business planning should involve all departments, functions and levels of staff. I work with a lot of companies on their strategic business plans and some of the best ideas come from the lower levels of staff.
2. The uncertainty of Brexit has caused many companies to re-think their market positioning, both physically and in terms of their business model. It is a great opportunity for companies to stand back and really consider what their customer value proposition is. Getting clarity on the exact customer need that their service/product is satisfying should be one of the first steps. How they will then deliver this in a sustainable and profitable way, i.e. the business model which they will operate, is critical to any plan.
3. Now, more than ever, all sectors are changing rapidly and companies need to keep abreast of these changes and be prepared to change or tweak the way they operate. A business plan should not be set in stone and it should be reviewed on an ongoing basis with changes made where needed. The key to success is in the ability of a company to be agile.