Emil Stickland: Home-grown businesses should be adding more ecommerce to their baskets

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Scotland has long been a trading nation. The archaeological remains on Orkney attest to a degree of Neolithic barter, though how one-sided the trade was with the rampaging Viking visitors is a matter of debate.

Geography and political division were often hindrances, but the Franco-Scottish agreement in 1295, which forged the Auld Alliance, gave Scottish merchants privileged access to Bordeaux’s finest wines and established Leith as the claret capital, much to the chagrin of English wine merchants who received inferior products. By the late 19th century, the Scottish nation had secured a place at the top of the global export super-league.

Trade is firmly back on the agenda with Brexit. But amid concerns about the impact of ‘no deal’ on exports of Scottish produce, one major opportunity has been overlooked – ecommerce. The buying of goods and services online is worth £560 billion to the UK, according to ONS figures. That’s bigger than the oil and gas sector and food and drink combined. The UK is the third-largest global player for online trading, after China and the US.

Were Scotland to receive its fair share of this revenue, it would be worth around £44bn. But while Scots are just as likely to shop online, they are much less likely to sell online. The newly formed Institute of Ecommerce estimates this trade in Scotland to currently amount to less than £3bn annually.

There is, therefore, a £40bn opportunity for Scotland and it could not be coming at a better time. For bricks and mortar retailers, struggling on a depressed high street, ecommerce represents a much wider marketplace than they can access at present. For start-ups, ecommerce is the ladder to scale-up.

For those who want to start a business but have limited capital or time, ecommerce represents a flexible opportunity. You can run an ecommerce business from your kitchen table and do so around a nine-to-five job or family commitments.

The barriers to entry are not financial – this type of business can be set up quickly and cheaply – but derive from a lack of skills and knowledge. At present, there is no dedicated ecommerce course in any college or university in Scotland.

It means that Scotland is missing out on high-paid jobs. Ecommerce is growing at around 16 per cent a year in the UK, and thriving ecommerce businesses based in the hubs of London and Manchester are recruiting tens of thousands of skilled operatives – coders, search engine optimisation operatives and digital marketeers – often on salaries north of £50k.

The Manchester-based Hut group is an ecommerce-only business selling around £1bn online, with almost one-third of that directly to consumers in China. These are the new generation of businesses that will power the future of retail. But without swift action, what ought to be a fabulous opportunity will become an economic threat. As more of us shop online – and, at present, more than 80 per cent of all trade in Scotland still happens in traditional shops – the money which stayed in the local economy, paying for goods and services, will haemorrhage south to the ecommerce hubs.

Government and industry are waking up to the need to future-proof the Scottish economy by getting up to speed on ecommerce. Scottish Enterprise, Skills Development Scotland and the University of Strathclyde Business School are putting significant resource and effort into building a thriving ecommerce infrastructure.

Organisations such as Women’s Enterprise Scotland are showing foresight and leadership on this topic, which lies at the heart of our ability as a nation to create wealth, jobs and exports. A network of ecommerce clubs to help businesses at all levels is in creation through the Institute of Ecommerce.

A number of like-minded individuals, supported by cross-party politicians, are working to secure a bright future for ecommerce in Scotland, irrespective of the outcome of the election and Brexit. Despite all the political turbulence and uncertainty, this sharp focus on growing Scotland’s trade is a 2020 vision we can all vote for.

Emil Stickland is the founder of the Institute of Ecommerce, see www.instituteecommerce.com

This comment piece first appeared in The Scotsman’s winter 2019 edition of Vision. A digital version can be found here.