Sink or Swim Across the Pond

But while there are many commonalities between the US and the UK, success in one market is no guarantee of success in another. Your UK market entry strategy needs to take account of differences in culture, regulations, and consumer behavior. What’s worked for you in the US won’t necessarily hit the spot for the Brits. You need to understand the local conditions and plan your strategy accordingly.

How Big is the UK Market?

Let’s begin with the opportunity. UK consumers are still feeling the effects of inflation and 2023 saw a curb in spending as a result, but the overall picture is strong. The UK consumer goods market grew to US$283.2billion in 2023. Its e-commerce market is the third largest in the world, outperforming every country in mainland Europe, with revenue projected to reach US$144.20bn in 2025.

British consumers have a taste for luxury US brands, notably in sectors like fashion, electronics and beauty and cosmetics, where quality, exclusivity, and cool score high. Health and wellness products are on-trend too, as are personalized and premium customer experiences.

Logistically and culturally, the UK provides a solid stepping stone for US brands looking to launch in Europe. A quarter of all retail sales taking place in the UK are online, making it Europe’s biggest e-commerce region and the perfect entry point to the huge European e-commerce marketplace.

While the UK is no longer a member of the European Union, its proximity to mainland Europe and the knowledge among British logistics partners of the complexities of the European market make entry from the UK a smart and strategic move.

What Differences do I Need to Know About?

The Brits may speak the same language but culturally they are a different beast. More subtle, more genteel, more skeptical, more, well, British. They need a bit of wooing. It’s important to bear this in mind when it comes to marketing.

They shop differently too. While retail is moving increasingly online, bricks and mortar favorites remain, from the iconic Harrods to designer boutiques to High Street chains. Each has its place and can offer something unique when launching a new brand in the UK, whether you’re looking for an exclusive buzz, or high volume, or a platform where you can hook customers in and tell them your brand story.

Understanding the British psyche is crucial for successful customer comms. In general, Brits prefer a more subtle approach than Americans. They prefer to cut to the chase, they like to be wooed a little. Take some time to build the relationship, earn their trust, make them love you.

It used to be the case that Brits preferred a more formal approach than Americans too, but this is changing, particularly with B2C comms. You can be familiar in your marketing copy – they won’t take offence. For business comms, though, a little formality still goes a long way.

UK businesses often have a more consensus-based decision-making process, rather than letting decisions fall to a single authority. This means things may take a little longer than you’re used to. Expect a longer sales cycle than you’re used to in the US.

It’s a good idea to hire someone local and familiar with these cultural traits to guide your sales and marketing teams and ensure there are no cultural mis-steps that could derail your launch before it’s happened.

Launching Your Brand and Marketing

To build brand awareness ahead of launching in the UK market, we strongly advise you to hire a UK PR agency that knows the UK influencer landscape for your type of product. US beauty brands, for example, have discovered the benefit of hiring PR firms with intimate knowledge of the UK beauty scene and its most influential commentators.

While social media – Instagram and TikTok in particular – is very powerful for creating a digital buzz and driving visitors to your e-commerce platform, the UK print media still play a big role in helping to establish new brands.

Omnichannel Fulfillment Expertise

As with PR, it pays to partner with a UK based fulfillment and logistics company like ILG, which specializes in fulfillment for a number of successful e-commerce brands. This will help you to circumvent the complications of import/export (especially valuable if you’re planning to expand further into Europe), and the demands of UK retail outlets.

Experience and knowledge of retailers’ vendor manuals is crucial. These set out strict rules covering delivery requirements like booking slots and labelling, which brands are expected to adhere to, with financial penalties for those that don’t.

Because it’s so detailed and the stakes are high, most UK 3PLs specialize either in wholesale fulfilment to retail outlets (B2B) or direct to consumer (D2C). For US brands wanting to launch both in-store and online, this segmentation presents a further layer of complication, requiring not one but two fulfillment partners. ILG is unique in offering an omnichannel fulfilment solution, with longstanding experience and expert knowledge in both B2B and D2C channels.

Managing Your Stock to Minimize Costs

Getting products shipped overseas is a huge expense and the time it takes can make you uncompetitive in a market that expects next day delivery on many goods. At ILG, we help our US customers, MALIN+GOETZ, Mud Water and Jones Road to minimize their shipment costs and transit times by providing a large stockholding capacity. We have 10 high-spec fulfilment centers across the UK, as well as two more in the EU.

In October 2022, ILG were delighted to partner with Jones Road Beauty to handle their UK e-commerce and retail fulfilment. Prior to this, UK e-comm orders fulfilled from the US had been prone to slow delivery and high shipping costs. Jones Road needed a UK-based beauty fulfillment specialist with the right mix of e-commerce and retail fulfillment expertise, and a flexible partner with the bandwidth to quickly upscale in step with its anticipated rise in UK sales.

When Jones Road launched in the UK, the product was a huge success and in store stock sold out in the first two days. Fortunately, we had a good amount of stock in preparation for such an eventuality and were able to replenish the store without delay.

Navigating the Regulatory Minefield

A UK-based logistics and fulfillment partner will guide you through the regulations that apply in the UK and Europe. Since Brexit, cross border logistics have become more complex and can cause costly hold-ups for those who don’t know their way around.

Your data handling will need to comply with the EU General Data Protection Regulation (GDPR). If you intend to set up shop in the UK, you’ll need to register with Companies House, understand UK employment legislation, and become familiar with the tax landscape in order to remain compliant with UK corporation tax and Value Added Tax (VAT).

You’ll need to know about laws governing the use of certain products and ingredients. Some beauty products, for example, contain ingredients that are permitted in the US but banned in the UK. Packaging too is increasingly regulated, with strict laws governing labelling and recycling, particularly when using plastic packaging.

For ILG, which deals with these regulations on a daily basis, treading a compliant path is second nature. We have helped US brands to launch in the UK, established a firm foothold in both the retail and e-commerce markets, and then take the next step into Europe.

For US brands that take the trouble to learn the unique characteristics of the UK marketplace and make use of local knowledge and expertise, there are exciting opportunities to be had across the pond. US brands will always be of interest to British consumers and there is certainly room for more.

Ready to enter the UK market? Get in touch today.

Sources

https://www.statista.com/outlook/io/manufacturing/consumer-goods/united-kingdom

https://www.imarcgroup.com/uk-consumer-goods-market

https://www.rangeme.com/blog/nine-things-u-s-brands-should-know-before-launching-in-the-u-k/