Low Dollar Encouraging British Shoppers to Buy Online
By Bernice Hurst, Managing Director, Fine Food Network
Airfares between the U.K. and the U.S. may be cheap, and the cost of a holiday going from my direction to yours an absolute bargain, but many British shoppers are saving even that expense by getting their retail therapy online. According to cost comparison website Pricerunner, visits by British consumers to online shops in the U.S. have increased 92 percent this year, while the number of passengers boarding planes has dropped. “Sit back and shop” seems to be the rage.
With the dollar hitting a 26-year low against the pound, many goods on U.S. websites cost two thirds or even half compared to sites in the U.K.
Based on an exchange rate of £1 to $2.07, as it was just a few short days ago, The Telegraph calculated that British consumers could spend some £63 (U.S. $130) less buying
four items online from American stores than those same items would be if purchased
from U.K. high street shops or websites, including additional costs for postage
The paper’s New York correspondent, Melissa Whitworth, selected as her own favorites: Zoomies; Beautyhabit.com, Otte, Neiman Marcus, Vivre, and Yoyashop.
There are a few downsides, however, for British consumers. Many American retailers including Wal-Mart, Abercrombie & Fitch and Apple will not ship to the U.K. Others refuse to even accept credit cards with non-American billing addresses. Alternatives such as using MyUS.com or MailForwarding.biz to set up American posting addresses can be expensive. Asking friends or relatives to accept delivery and then re-ship may be acceptable the first or second time but may not be suitable for frequent shopping.
The costs of shipping, customs, value-added tax and the price of extracting parcels from the post office when they finally arrive can also mount up. Passengers returning to the U.K. have a tax-free allowance of £145 whereas goods purchased online and shipped in are limited to £18. Perhaps the biggest drawback, however, apart from missing out on a potentially great vacation enjoying the tactile satisfaction of shopping, is the replacement of instant with delayed gratification while you wait for your bargain to arrive.
Discussion questions: Given the weak dollar, should U.S. retailers be aggressively targeting overseas shoppers through their e-commerce platforms? If so, how can they further capitalize on the opportunity and make the online buying process easier for foreign consumers? Or are the costs and complications not worth the effort?
[Author’s commentary] As a U.K.-based shopper who tries to buy from American retailers – and have my purchases shipped to American addresses – I have been frequently frustrated by a refusal to accept non-American credit card details and billing address. When my son wanted clothes from Abercrombie & Fitch last year while I was in New York, he used his American grandmother’s card to buy them, had them shipped to his American aunt and then had me carry them back to London for him. Just a little bit long-winded. When A&F opened in London soon afterwards, they prevented access to the American website – partly because they made so much more by charging pounds rather than dollars? And had shorter distances to ship? Perhaps Pricerunner’s recent evidence of demand will begin to convince a few more retailers that they are missing an opportunity.