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E-commerce made simpler by latest EU directive


The proposed EU Consumer Rights Directive has not been welcomed by all e-retailers but the CEO of online health & beauty specialist, Aaron Chatterley, thinks the legislation will make business simpler for many companies like his.

By Aaron Chatterley

Any “Directive” that is spewed from the bureaucratic EU machine is generally ripped to pieces by Eurosceptics, the Daily Mail and various disparate groups of little Englanders.

So we shouldn’t be surprised that the EU Consumer Rights Directive has already been dismissed as pointless and damaging to competition.

For the uninitiated, the Consumer Rights Directive is a proposed piece of legislation that will harmonise consumer rights across the EU’s 27 member states.

This should enable businesses to avoid the expense of ensuring they comply with local regulations in each EU country in which they trade.

But critics of the legislation have claimed that it will drive a multitude of online retailers out of business.

Specifically, the opponents of the legislation point to the proposal to force e-tailers to pay for the cost of any goods returned.

Secondly, e-tailers in the EU will be obliged to ship products to any and all member states, subject to shipping feasibility.

To answer the first charge: E-tailers who don’t ship faulty or mis-sold goods have little to worry about!

To answer the second charge: Why wouldn’t any retailer want to ship to other member states if it increases the size of their market? They can still charge whatever shipping charges they like to cover the extra distance. The IMRG estimates the Consumer Directive draft regulations will cost online retailers an additional €10 billion per year in delivery charges, which amounts to four per cent of the estimated worth of the e-commerce industry in 2012. But to me this looks like alarmist rhetoric.

Cross border transactions within the EU needs to be encouraged. Currently, according to Euromonitor, the e-tail market within the EU is worth €104 billion. But only 8.8 per cent of EU consumers have ever made a cross border transaction.

The opportunities for ambitious e-tailers are obvious. Residents in smaller EU states do not always have access to the widest range of consumer goods in their country. To take a fictional example – Acme Running Shoes may not ship its latest product to a small country on the edge of the EU because of limited supply. But cross-border trading should make it easy for consumers in that country to still get their hands on that product.

The EU Consumer Directive also obliges e-tailers to be more up front and transparent when it comes to charging structures. Again, to be welcomed. In the aviation industry, the Office of Fair Trading has already expressed its disapproval at the way airlines deceive passengers with hidden charges.

How much time is wasted shopping online when you find a great product from a seemingly professional website only to spend five minutes registering online following the checkout procedure to be told there’s an additional £10 to pay for delivery?

I am also an advocate of removing pre-ticked boxes at checkout level, you wouldn’t expect to walk around Sainsbury’s and have an employee dropping things in your basket you hadn’t asked for would you?

I agree wholeheartedly with the sentiments of Viviane Reding, the EU Justice Commissioner, who said recently:

“This is a good day for Europe’s 500 million consumers. Today’s adoption of the new EU Consumer Rights Directive will strengthen consumer rights by outlawing internet fraudsters who trick people… Shoppers will no longer be trapped into buying unwanted travel insurance or car rentals when purchasing a ticket online. And everyone will have 14 days if they wish to return goods bought at a distance, whether by internet, post or phone.”

That is not to say that the Consumer Directive will suddenly transform e-commerce within Europe. There are lots of mundane reasons why consumers don’t look at e-tailers outside of their own country – not least the fact that there are 23 languages spoken within the EU.

And there are infrastructure and payment issues. In the UK, the majority of consumers buy from websites using their debit or credit card. In Germany, bank or postal orders are still favoured. In eastern Europe, payment on delivery is still widespread.

But the UK’s more forward retailers are already boosting their sales numbers through cross border e-commerce platforms. Marks & Spencer, Next and spring immediately to mind.

The relative weakness of sterling against the Euro will give UK e-tailers a significant competitive advantage if the Consumer Directive does assist cross border transactions.

At Feelunique we already offer free worldwide shipping and recently launched a French language website. But we have customers from all over Europe and the shipping challenges are far outweighed by the commercial benefits.

And besides, the nature of online marketing means that e-tailers who don’t want to ship to the far side of the EU will barely appear on search engine results within those territories anyway.

Admittedly, one-man traders who perhaps offer second hand goods on eBay may not appreciate being obliged to sell goods across the EU and I concede that a test case to enforce the Consumer Directive at this level of e-tailing would not be welcome.

But for professional e-tailers, the EU Consumer Directive does not conceal any demons.

For a great many of us, our businesses have just got a whole lot simpler.

Note: The views expressed here are those of Aaron Chatterley and do not necessarily represent the views of Retail Gazette.

Published on Friday 05 August by Editorial Assistant

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