Expanding your business into the EU is no small feat, especially for UK fashion brands grappling with post-Brexit complexities. But with the right strategy, the opportunities in Europe are too big to ignore. Explore how to overcome the obstacles and thrive as a UK fashion brand in the EU.
Post-Brexit realities: Where does the UK stand?
The UK's trade landscape has shifted quite a bit since Brexit, leaving British brands with more questions than answers. UK exports to the EU have slumped by £3.5 billion, while imports have skyrocketed by £15.3 billion, pushing the trade deficit to a jaw-dropping £102.6 billion (source: Retail Economics, Tradebyte, food and non-food retail products). The reasons behind these numbers are increased customs checks, new tariffs, and regulatory hurdles, which have created significant trade friction.
While this sounds like a challenging situation, let’s not forget the silver lining: Europe is still a £322.6 billion non-food sales market. And here’s the kicker: marketplaces dominate nearly half of this spending, giving UK brands a fast track to Europe’s wallet-conscious but online-savvy shoppers. The question isn’t “why expand?” — it’s “why wait?”
The key challenges UK brands face when expanding into Europe
Expanding into Europe can feel like navigating uncharted waters, but every challenge is an opportunity in disguise. By understanding the obstacles ahead, UK brands can take proactive steps to overcome them and thrive in the European market.
To shed light on these challenges, we interviewed several UK brands about the biggest obstacles they've encountered when expanding into Europe, offering valuable insights and real-world experiences for others looking to make the leap.
1. Customs: Cutting through the red tape
Post-Brexit customs processes have made logistics more complicated. Longer processing times, mounds of paperwork, VAT rules and intricate classification rules are just the beginning. Brands now need to triple-check their goods for compliance, ensuring they meet EU safety and security standards. The good news? With expert advice and smart planning, these barriers can shrink. Using localised partners or tech-driven solutions makes navigating customs smoother and leaves more time to focus on growing your brand.
2. Increased costs: From tariffs to logistics
Costs have risen following Brexit, including tariffs, duties and cross-border logistics. VAT registrations in multiple EU countries and upfront guarantees further add to financial pressures, particularly for smaller brands. Logistics fees have also risen, making it harder to keep operations cost-effective. These challenges may seem steep, but they’re a reflection of the new landscape that UK brands must navigate to establish a strong presence in the EU.
3. Stock splitting: Navigating regional preferences and risks
Europe’s diversity offers both opportunities and logistical challenges. Every region has its own fashion trends, purchasing habits and even seasonality quirks. Predicting demand across these diverse markets can feel like trying to juggle while blindfolded — risking overstock in some areas and frustrating stockouts in others. Splitting inventory to cater to each market means more complexity and more costs in your supply chain. However, there are some solutions: a single stock pool offers brands the flexibility to move inventory based on demand, while managing everything from a single point.
4. Cross-border returns: The not-so-grand tour
Returns are a fact of life in retail, but cross-border returns? They’re a whole new ballgame. If goods need to make their way back to the UK, they can run into customs fees, re-import paperwork and logistical bottlenecks. Additional costs can quickly add up, making the process frustrating for both customers and brands. Asking EU customers to handle their own returns isn’t exactly a winning strategy either. Managing returns effectively is a key piece of the puzzle for making your European expansion seamless, and working together with a trusted European-based partner can be vital to simplify the process.
5. Localisation: Tailoring to Europe’s diverse markets
Europe isn’t a one-size-fits-all market; it’s made up of diverse preferences, convenience expectations and habits. From payment methods to delivery carriers and even shopping behaviours, every country brings its own flavour. What works in Germany might not fly in France, and Sweden could demand something entirely different. Meeting these expectations often involves integrating with various carriers, platforms and marketplaces – all while maintaining a consistent brand identity. It’s a challenge that tests even the most adaptable businesses, but is crucial for winning over Europe’s diverse audience.
Turning the tables: Opportunities for UK fashion brands in Europe
Despite the challenges, Europe offers many opportunities for UK fashion brands. From its vast online market to the rise of innovative solutions, the potential for growth far outweighs the obstacles. Here’s how brands can seize the moment and thrive in this dynamic landscape.
1. Europe’s massive market potential
In Europe, there are a lot of potential customers waiting to discover your brand. The demand for online non-food sales is growing rapidly, fuelled by younger, tech-savvy consumers but also by silver spenders (55+), who are financially stable and are shopping online more than ever. For UK brands, this isn’t just an opportunity — it’s a golden ticket to tap into one of the world’s most lucrative retail ecosystems.
2. The rise of marketplaces: Gateways to European consumers
Marketplaces have become the beating heart of Europe’s online shopping scene, accounting for nearly £132.8 billion in annual sales. Platforms like Zalando, Amazon and Otto offer UK brands a ready-made infrastructure to reach younger, more affluent consumers who shop online frequently. Marketplaces simplify the complexities of expanding internationally. From seamless payment options to optimised customer service, they handle much of the heavy lifting localisation requires.
3. Bonded warehouses: Streamlining costs and deliveries
For brands navigating the post-Brexit maze, bonded warehouses are a game-changer. These EU-based facilities let you store goods without paying import duties or taxes until they’re shipped for sale. The result? Deferred costs, improved cash flow and faster deliveries to your customers. By holding inventory closer to your European buyers, bonded warehouses reduce customs headaches and make it easier to respond to market demand.
4. The omnichannel revolution: A double-edged sword
Omnichannel retail is both a challenge and an opportunity. European consumers now demand a seamless experience, moving effortlessly between e-marketplaces, mobile apps and physical stores. A study by Harvard Business Review shows that 73% of shoppers use multiple channels during their shopping journey, combining digital and physical touchpoints such as using smartphone apps to compare prices or interactive catalogues in-store. This creates incredible opportunities for brands to engage customers across these touchpoints, with omnichannel shoppers spending an average of 4% more in-store and 10% more online compared to single-channel shoppers. By effectively integrating omnichannel strategies with loyalty programs, brands can create a seamless, personalised experience that drives engagement, increases revenue and builds trust.
From challenges to triumph in the European market
Expanding into Europe has its challenges, but the opportunities are worth the effort for UK fashion brands. Yes: customs complexities, rising costs and localisation hurdles may test your patience. But with Europe’s big online market and the rise of marketplaces and bonded warehouses, the potential for growth is staggering. Ready to expand your fashion brand into Europe? Let’s explore the opportunities and tackle the challenges together.
