It’s difficult to imagine what post-Brexit life will be like for global retailers – and even more difficult to imagine how they’ll get there. With fluctuating currencies, impending trade regulations and new customs requirements, organizations are doing their best to plan for how the move will affect their supply chains.
While retailers haven’t hit the panic button just yet – EU customs and trade laws are in place in the U.K. for at least another year – crucial strategic efforts are well underway. Retailers will have to face a massive shift in trade as the U.K. will cease to be part of any EU trade agreements and preferential programs in which it once participated. In addition, it will begin the grueling process of renegotiating new trade agreements and reinforcing existing trade partnerships while entertaining new customs regulations and tariffs of its own.
No one knows for certain what Brexit will bring, but as the date approaches, we have a few ideas on how it will shift the retail supply chain landscape:
1. Investment in new technologies will be necessary to better manage global trade management (GTM):
Retailers are well aware of the new retail technologies at their disposal thanks to Industry 4.0, including artificial intelligence, machine learning, IoT and more. However, most organizations have focused on implementing the tech to increase supply chain speed to keep up with changing consumer preferences.
With Brexit uncertainty abounding, retailers will increase investment in different technologies that can better track trade and customs laws. For example, Bamboo Rose’s GTM solution streamlines logistics, supply chain, purchase order and payment in a single source of truth. The platform tracks any changes pertaining to U.K. trade, and notifies customers in real time so companies can focus on designing, developing and delivering goods at consumer speed.
2. Communication and collaboration will become top priorities:
We’ve said it time and time again: Communication and collaboration are key to supply chain success. In the next few years, retailers will work toward creating a collaborative environment with their supply chain community to minimize disruption and open silos. Most organizations are going through similar uncertainty, and it only makes sense to crowdsource best practices and knowledge across global teams to overcome the challenges involved with Brexit.
This all requires a single collaboration platform that allows retailers, suppliers, designers, sourcing professionals, manufacturers and more to communicate together with suggestions on how to best increase transparency, visibility and efficiency as Brexit approaches.
3. Retailers will reconsider what have previously been “givens”: In the next year, organizations will dig deeper into their supply chains to find any hidden European suppliers to mitigate unforeseen costs before they happen. Perhaps a company has a relationship with a U.S. supplier, but that supplier subcontracts work to a U.K. organization that then subcontracts its work to another supplier, and so on. Post-Brexit, the company may be stuck in a costly bind with new trade laws and agreements that negate their previous supplier agreements.
Additionally, with the cost of warehousing steadily increasing, industrial rents have risen around 15 percent since 2014 as e-commerce drives up demand for space in London and other U.K. cities. Brexit continues to add to that demand, and retailers must stay vigilant to ensure their cost management stays under control, or consider other locations for their goods.
Surviving in a post-Brexit world means organizing the retail supply chain faster and more creatively than ever before. With just a year left to prepare, retailers need to be resilient and agile, or face extinction.
Preparing for Brexit? Bamboo Rose’s Global Trade Management solution can help your team increase accuracy, communication and visibility throughout your global supply chain.