The confidence of e-retailers improved significantly in the last quarter, due in part toamendments to the EU’s draft Consumer Rights Directive (CRD), including the responsibilities of
retailers to pay for returns logistics.In the latest confidence survey by e-retail association IMRG, covering the second quarter of2011, 78% of respondents thought that the strong performance of the market would either continue orimprove, compared with 71% in the Q1 survey.
IMRG said the reaction to the amended CRD had “improved by some margin”. In the Q1 survey, theCRD was still at the draft stage, and 69% of respondents felt that in that form it would have anegative impact upon the industry. “Now that it has been finalised and some of the divisiveproposals changed, only 24% feel it will have a negative impact,” IMRG reported.
In its original form, the CRD proposed that for sales throughout the EU, retailers would becomeliable for covering the cost of the return of any product valued over €40 if a consumer exercisestheir right to withdraw from a purchase, which IMRG argued placed an unfair burden on retailers.The original draft of the CRD also would have obliged all retailers to sell into any country withinthe EU27, which IMRG said ran completely contrary to current best practice guidelines forcross-border trade. IMRG argued that being forced to sell into an unknown market without havingfirst identified its appropriateness for the retailer’s business model, researched the differencesin operation and policies, and planned for how the fulfilment process will work “could lead toserious errors in logistics”.
IMRG spokesman Andy Mulcahy today told CEP-Research that both of these worrying elements of thedraft directive had been effectively dropped, with the obligation to sell to the entire EU27watered down to a “preference”, and the returns logistics requirements basically reverting towhatever is agreed between retailer and purchaser. He felt this was a good result for retailers andthose who had lobbied against the CRD in its original form.
The directive in its modified form is expected to be agreed by the EU’s Council of Ministerslater this month.
Mulcahy said: “We are pleased with the outcome. The requirement to cover the cost of the returnof a product was the most contentious part of the directive, and the amended form should allownormal market forces to play their part. Common sense has prevailed.”
However, the results of IMRG’s Q2 survey suggest that some retailers are still unclear whateffect the amended CRD will have. Around 40% felt that the CRD would have a neutral impact on theindustry, while 25% said they did not understand it well enough to make a decision.
“This uncertainty could be due to the many changes the directive has undergone before the finalwording was agreed,” suggested IMRG.
Andrew McClelland, chief operations and policy officer, said: “The IMRG Capgemini e-Retail SalesIndex has performed consistently well throughout the year so far, even as there have been manyretail casualties on the high street, and the strong confidence levels at online businesses are aclear reflection of that. There seems to be some confusion over the impact that the CRD will havenow, but it has been redrafted a few times, so this is perhaps expected. The fact that MemberStates have two years to implement the new rules also means that retailers probably do not havecompliance high up on their agendas yet.”
The IMRG confidence survey was based on the responses of 153 UK-based companies involved ine-retail.
