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December 02 2008
Could the sinking pound raise your Xmas revenues?
As the value of the pound plummets against the dollar (and the euro), the New York Times is urging price-conscious American consumers to visit London to do their Xmas shopping. Prices are cheap for Europeans too. Could it be worth your while to do a little overseas promotion in the final run up to Christmas?
With the pound now worth less than US$1.50, its lowest for six years, the New York Times has called US shoppers' attention to the idea that there are bargains to be had in the UK.
And Visit Britain is helping, flagging up on its website "It’s not 2:1 any more! Britain is now 20 percent cheaper for Americans than it was in the summer. If you’re planning a trip, now is the time." The London branch is also flooding American travel agencies with marketing material and encouraging them to make customers aware of the favourable exchange rates, the New York Times reports:
Selfridges, the department store, is marketing itself as a discount designer store for those paying in dollars or euros. "This is a very good time for customers from the euro zone, but also from America, to take advantage of the current exchange rates and buy the best fashion at lower prices," the chief executive, Paul Kelly, said.
The store even published a list comparing prices at its flagship store on Oxford Street in London to those in the United States. A pair of leopard print Dolce & Gabbana shoes, according to Selfridges, would cost London shoppers 38 percent less than in New York, and a Prada handbag would be 23 percent cheaper.
Richard Dickinson, chief executive of New West End, which is promoting London’s theater and shopping district, said he expected 10 million overseas shoppers in London for Christmas, lured by the favorable exchange rate. Virgin Atlantic said demand for flights to London, especially from New York, Boston and Los Angeles, is up 3 percent from last year.
The Liberty department store in London has recorded a 30 percent increase in American visitors compared with last year and said it also expected more British shoppers this year.
Prices are much lower for Europeans, too, the New York Times says:
On Oxford Street, three women from Italy compared prices as they stood in front of a window displaying iPods. "It's definitely much cheaper than in Rome," said Anna Illiano, a human resources manager who traveled to London for three days to work but added a day of shopping. "The discounts are fantastic. I'll be doing some of my Christmas shopping here."
A long-term fall in value of the pound won't help, of course, since it will make the cost of importing goods much higher:
While the falling pound has not resulted in an influx of shoppers for British retailers, it has increased the cost of the goods they import.
Many clothing retailers moved part of their production to Asian countries whose currencies are tied to the dollar. Argos, a shopping chain whose wares range from furniture to jewelry, told analysts that for every cent the dollar increases against the pound, the company loses about £4 million in gross profit.
Ouch!
In the run up to Christmas, though — and providing you've got delivery covered — putting some extra effort into attracting shoppers from overseas to your website could provide a nice little boost.
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