A generation gap between digitally savvy Irish consumers and ageing business owners attached to old values is being blamed for €4.5bn in online spending going overseas annually.
The Virgin Media Digital Insights report published yesterday (21 September) revealed that online consumer spending in Ireland will hit €14bn by 2021, up almost 100pc from €7.5bn this year.
It found that 60pc of current spending (some €4.5bn) is leaving the country as shoppers buy goods and services from overseas online retailers and service providers.
However, Irish websites account for just 41pc of Irish online purchases.
The study found that the average Irish citizen’s spend has grown 13pc since 2014 to an average of €80 per person a month and that 94pc of internet users now shop online.
“Ireland is well prepared to compete in the digital revolution,” said Virgin Media Ireland CEO Tony Hanway.
‘Irish businesses need to close that generational gap if they are going to reap the benefits of the fast growing in consumer spending online’
– GERARD O’NEILL
“However, there are still a substantial number of businesses who are not connected to the web, or have no web retail presence,” Hanway told Siliconrepublic.com.
“That’s a big opportunity lost, especially as our report is predicting that online trade is going to increase by 100pc over the next five years.”
The lost generation
The fact that €4.5bn in online spending is flowing overseas – with that figure set to rise significantly in five years’ time – is a worrying trend, and one that could seal the fate of generations-old Irish firms.
It is certainly a missed opportunity for growth-hungry Irish firms who want to do better than just scrape by, according to Gerard O’Neill of Amárach Consulting, authors of the report.
When asked what might be holding Irish businesses back, O’Neill pointed to a generational gap.
“There is a gap of older people in businesses growing up in an Irish way of doing business that was very successful – conversational, face-to-face, traditional – who are losing touch with a younger generation of Irish consumers who want access through phones, apps and websites to products and services.
“They aren’t interested in chit-chat or conversation. And Irish businesses need to close that generational gap if they are going to reap the benefits of the fast growing in consumer spending online.”