Retailers missing out as Ireland’s e-commerce spend reaches €12.3bn a year

21 Sep 2018

Image: Madcat_Madlove/Shutterstock

Retailers are letting sales slip through their fingers to overseas websites while just three in 10 SMEs can take orders through their websites.

The Irish online economy is booming, with e-commerce spend reaching €12.3bn per annum.

However, Irish SMEs, especially firms in the retail sector, are missing out on this spend and need to improve their capabilities in areas such as online marketing, customer data analysis and software usage.

‘Many retailers face increasing international competition on their doorstep and need to enhance their competitiveness’

An eye-opening report from the IE Domain Registry (IEDR) indicating how just three in 10 SMEs are capable of processing orders on their websites has coincided with the announcement of a much-needed €625,000 pilot scheme by the Minister for Business, Enterprise and Innovation Heather Humphreys, TD, to support retail online capability.

A Digital Health Index published yesterday (20 September) by the IEDR found that Irish SMEs rank “fair to good” in communicating and transacting online, but the vast majority rate poorly for online marketing, customer data analysis and software usage.

It recommends the roll-out of a new national digital activation campaign led by Government to help online SMEs maximise their online presence.

The report found that 72pc of SMEs have websites – the highest ever figure yet – and 73pc are optimised for mobile. However, just three out of 10 can process orders online and almost two-thirds don’t even bother to promote their services online.

“We’ve gone far beyond the need to raise awareness of the benefits of an online presence,” said IEDR CEO David Curtin. “Now, we need to focus on developing programmes that upskill time-poor small businesses and help them to quickly implement digital sales tools and e-commerce features.”

Critically, SMEs were rated low for poor understanding of digital assets such as productivity software, online messaging platforms, online marketing and promotional tools, and data analytics software.

Detail is in the retail

The €625,000 pilot Online Retail Scheme was developed by the Department of Business, Enterprise and Innovation (DBEI) with Enterprise Ireland in response to a need they have identified for a step change in online capability in the retail sector, as set out in the Action Plan for Jobs 2017. Announced at a meeting of the Retail Consultation Forum yesterday (20 September), the intention is to bring about a revolution in online Irish retail.

By supporting a cohort of SME retailers with grants between €10,000 to €25,000 on a match-fund basis to enhance their digital capability, DBEI aims to encourage the retail sector in Ireland to develop a more competitive online offer. This will enable retailers to see an increase in their customer base and build a more resilient business in the domestic and global marketplace, both online and offline.

Applications for funding for research, strategy development, implementation and training will be considered on a competitive basis. “Many retailers face increasing international competition on their doorstep and need to enhance their competitiveness,” Humphreys said.

“I want to acknowledge the support of the Retail Forum members over the past two years in clearly articulating the needs of the retail sector so that we can put in place an initial response to some of the challenges Irish-owned retailers are facing to maintain and grow their market share.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years