Beringer Tame Blog
Beringer Tame Blog
The Russian invasion of Ukraine is foremost a human tragedy. The conflict will have major repercussions on the global economy, which had not recovered from the pandemic, supply chain issues and rising inflation.
Higher global energy prices will weigh heavily on the UK economy affecting shopper confidence. Petrol prices and household energy bills have increased and will push inflation to a 40-year high.
Living standards are set to fall during 2022-23 as higher inflation erodes real incomes and consumption.
Public finances are currently recovering more quickly than anticipated following the pandemic.
Business investment is expected to grow rapidly outpacing GDP growth.
Wage growth is unlikely to fully compensate for higher inflation.
Borrowing in 2021-22 is down thanks to strong growth in income tax.
Inflation in the UK is already running at a 30-year high of 6.2% and t he Bank of England (BoE) now expects CPI to reach 10% in Q4 2022 (+2% vs previous forecast).
It is likely that the Bank of England will increase interest rates at the fastest rate since 1988 as it trid to reduce "rampant inflation".
The UK economy could reach its pre-COVID level by the end of the year.
CPI has risen in the UK (and beyond) due to sharp increases in global energy and goods prices. Domestic inflation pressures are putting pressure on consumers and businesses alike.
CPI inflation is expected to dissipate over time as global supply bottlenecks ease, employment rises, wage growth picks up and energy prices (hopefully) begin to balance.
Additionally, the demand for more space, driven by the ability of more people to work from home (and changes to stamp duty), has created "continued upwards price pressures" on the housing market.
According to Acquia, 47% of consumers said they bought something online from a different supplier than previously.
The biggest drivers were "where can I get it" then "who has the best delivery" and 'who do I trust”.
Both Brexit and Covid-19 have had a significant impact on the world economy, however, more recently Russia's invasion of Ukraine has led to further economic effects.
Increases in energy and other commodities, including food and fuel, have exacerbated disruption and delays within the global supply chain, heightening inflation and pressures on people's purses. This will of course have an impact on ecommerce sales as discretionary income decreases and the ability to get products from suppliers and to customers slows. However, if you can stand out from the crowd (social media roles are in high demand), maintain demand, and keep on top of your business model, things should remain manageable.
Changes to shopping practices
Major events 2022
When it comes to ecommerce in Europe, the UK was the "first out of the gate" and continues to be the most developed AND active online market in the region with over 24,000 ecommerce businesses starting up in the UK during 2021 (+21% vs YAG). London was top of the board with the most start-ups coming from the capital, followed closely by Birmingham, Manchester, and Liverpool.
The UK is also the fourth largest ecommerce market in the world - the evolution of tech in retail, and utilisation of the English language meant we picked up the American approach quickly & easily - just think about how quickly we adopted Amazon!
However, multi-language and cross border shopping is more important than ever as consumers take a multi-region approach to purchasing goods they desire.
It's clear that the whole of society is engaged in spending money with online channels at some level.
According to Retail-X, millennials are the highest spenders (age 35-44) - this is likely because they are now overseeing the family 'purse-strings' and weekly online grocery shop.
During 2020 and 2021 the general labour market was supported by the Coronavirus Job Retention Scheme (or as we know it, furlough) which helped to prevent a large spike in unemployment across the UK. At the same time, there was a lot of movement and growth within the digital and ecommerce industry as businesses transformed and went online.
The average national salary has decreased by just over 1.5% vs last year to just over £35k (similar to a junior Digital Marketing role).
From May '21 to October '21 average national salaries continued to drop before rising again pre-Christmas and levelling out at the start of 2022.
* When looking at salaries, the impact of the end of furlough must be taken into account. The ONS has made it very clear that interpreting average earnings data is very difficult at present.
Source: Adzuna (data correct as of 26 April 2022 1049am)
Things have changed recently and there is now a sluggishness to the movement of talent.
It's less to do with a lack of talent, or even the 'great resignation', and much more down to the fact that talent isn't moving easily.
In order to attract talent, you now need to 'steal' it from elsewhere AND you need to give any candidate a good reason to choose you.
So if you're looking to hire an ecommerce or digital marketing professional, it's wise to ask the question "what are we really offering the candidate and why should they choose us?"
...We'll say more about this in our full salary survey coming soon!
...more to come
UK Economic Outlook - NIESR
BCC Forecast March 2022 - British Chambers of Commerce
Monetary Policy Report - Bank of England
Deloitte Economics Monitor Mar 2022 - Deloitte
Ecommerce Trends and Predictions for 2022 - Beringer Tame
Over 24,000 ecommerce businesses were started in the UK in 2021 - Instant Offices/Charged Retail
Mollie survey reveals eCommerce SMEs plan huge growth - Fintech Finance News
Economics Bulletin - IGD
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