Ted Baker & Brexit
Brands are now moving away from the view that online and offline are
two separate channels by offering new ways of delivering their brand
experience. "Studies have shown that consumers are often disappointed by
their favourite brands’ online offerings relative to what they provide in
the real world. Studies have also shown that two-thirds of shoppers would
use VR to shop." (Rossi, 2015) The virtual store gives Ted Baker a unique
selling point (an element that adds value to the business), global consumers
are able to experience the brand from wherever they are regardless of
location. There is an increased chance that consumers who have interacted
with Ted Baker’s online store are more likely to visit the physical location
when possible. This combined with the devaluing of the British pound due to
the recent Brexit Referendum means that visiting and spending in the UK has
never been cheaper for tourists. An increased number of tourists visiting
the UK directly correlates to an increase in spending. As a result of an
increased influ x of cash the British economy will strengthen, therefore
businesses will be in a more secure trading position for the future.
Virtual stores attract many global shoppers. Two examples of this would
be China and the US. However, WGSN reporter Petah Marian noted that if
attacks on UK Muslims continue, it will have a strong impact on how safe
Middle Eastern tourists feel in London and whether they want to visit the UK.
This in turn will particularly effect British stores like Ted Baker as "Middle
Eastern travellers accounted for 42% of total UK sales, growing 7% on last
year, according to data from Global Blue. For instance, the Middle Eastern
consumer accounts for 30% of non-EU spend at Westfield London and 23%
of non-EU spend at Westfield’s luxury quarter, The Village." (Marian, 2016)
If there is a decline in the number of middle eastern tourists visiting the
UK, this will decrease the number of sales resulting in a lower revenue for
businesses which will in turn directly negatively impact brands profit margins.
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