EU legislation will stop etailers in their tracks
The internet is a great leveller. From Asos to Ocado, it has allowed entrepreneurs with an idea to take on the established order with imaginative concepts. These two businesses have grown into giants of the online world, but there are many thousands more online retailers that are still small businesses hoping to make it to the big time.
But that growth could be stopped in its tracks by the European Consumer Rights Directive (CRD). Amid what is a well-intentioned piece of legislation, proposals to force online retailers to ship to the whole of Europe and pay the cost of returns could prove disastrous to every etailer.
It is simply not practical for most good-sized online retailers, let alone the minnows, to pay for returns from across Europe. The potential for fraud would also be enormous while the practical challenges from VAT rates to multilingual customer service would be huge.
The fact that 371 retailers ranging from Marks & Spencer to Markselectrical.co.uk have signed the IMRG’s letter to the EU objecting to the changes shows that the online retail world, big and small, is united against these proposals. The EU needs to see sense and ditch these plans from its directive.
The horse has bolted
Mothercare’s decision to close a quarter of its UK stores this week showed just how serious the problems facing specialist high street retailers are. Its announcement came just a day after Mary Portas’ appointment to advise the Government on the future of the UK’s high streets. Portas is an odd choice, being best known for her TV series where she runs down multiple retailers and their staff.
At least the Government has recognised that the high street needs help, an issue Retail Week highlighted with its Manifesto for the High Street campaign last year, and the involvement of the energetic Portas will help raise the profile of the issues. But there are no easy answers.
Sensible parking restrictions, lower business rates and strong town centre management will all help both independents and multiples, and hopefully Portas will realise these issues face all retailers, not just the smallest.
But as the case of Mothercare shows, the convenience of out-of-town shopping, supermarkets and the web are very powerful pulls. Whatever Portas recommends, it will be impossible to reverse these trends.
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