Heads in the sand: Almost 25pc of Irish SME businesses are offline

9 Jun 2017

Image: rangizzz/Shutterstock

Majority of offline SMEs think there is ‘no need’ to have a website, even though local e-commerce market is projected to grow to €14bn by 2021.

New research from the IEDR – the dot-ie domain registry – paints a damning picture of Irish SMEs’ online readiness, with less than a third of SMEs capable of processing e-commerce and almost 25pc with no website at all.

This is despite projections that Ireland’s e-commerce market will grow to €14bn by 2021. Sadly, most of this spend is predicted to go abroad.

‘Less than a third of businesses with websites can take sales orders or process payments via their website, yet Irish consumers are buying online in huge numbers’

It also goes against the prevailing wisdom of digitally savvy consumers, out of whom 83pc believe a business should have a basic website and 68pc believe a business is “outdated” if it doesn’t have an online presence.

The IEDR is Ireland’s main domain registry and is responsible for the management and the reputation of the nation’s ‘.ie’ domain address.

The lack of online readiness by ordinary firms harks back to the “word of mouth” traditions that served businesses well through previous generations.

The majority of offline SMEs surveyed – some 68pc of them – believe there is simply “no need” to have a website. 17pc say they are happy with the scale of their business and 23pc believe they have lots of business already.

This is despite evidence that Irish shoppers are bargain-hungry and are taking to their smartphones to find the best deals.

The IEDR research indicates that 71pc of consumers are more likely to buy from a business that has an online presence.

Most of Irish online spend is going abroad

IEDR CEO David Curtin warned that the situation is worrying and especially significant, not only after almost a decade of recession, but also taking into account evidence that consumers are flocking to online sites such as Amazon at the expense of high street retailers.

Encouragingly, 20pc of SMEs say they are currently in the process of building a website, up sharply on the 8pc recorded in the last wave of research. The number saying they have no plans to build one in the near future has dropped from 66pc to 57pc.

Curtin lamented that, still, too many SMEs are failing to take advantage of the online economy, which is booming.

“Less than a third of businesses with websites can take sales orders or process payments via their website, yet Irish consumers are buying online in huge numbers,” Curtin warned.

“Our e-commerce market is set to grow to €14bn by 2021, but most of that spend is predicted to go abroad.  We live in an age of convenience. With so many international retailers online and offering complete shopping experiences already, offline SMEs in this country face an uphill battle winning back the loyalty of Irish consumers. This is a huge and ongoing loss, considering Irish consumers’ willingness to buy Irish.

“The dot-ie Digital Health Index’s findings also dispute the European Commission’s recent DESI [Digital Economy and Society Index] report that ranked Ireland’s SMEs number one in Europe for selling online and selling online cross-border.

“However, the DESI report excludes micro-enterprises with fewer than ten employees. Micro-enterprises make up 92pc of all businesses in Ireland, so this omission has the potential to be highly misleading.”

Buddy system may help

Curtin said that there is an ongoing misconception among many offline SMEs that building a website and maintaining an online presence is difficult and time consuming.

“The opposite is true: there are many inexpensive, easy-to-use tools that allow business owners to design and create a website suited precisely to their needs. Irish consumer expectations have shifted in this direction; they are digitally savvy and expect all businesses, regardless of their size, to have a basic website.”

Curtin said that there are missing links between the tech industry in Ireland, the Government and the SME sector.

He advocated a new approach in the form of a buddy system “that links larger businesses and Local Enterprise Offices with older and less tech-savvy SME owners. Through this shoulder-to-shoulder mentorship, SMEs would acquire industry-specific knowledge on the basics of a website and the benefits of an online presence.”

Curtin also argued that wider structural issues must also be addressed.

“The provision of high-speed broadband, particularly to micro-enterprises in rural Ireland, must continue apace, while state initiatives, like the Department of Communications’ Trading Online Voucher Scheme, must be adequately resourced and assessed on an ongoing basis to make sure they are meeting the needs of SME owners.”

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