Online – Irish retailers’ biggest challenge
29 Nov 2019
Eileen Moloney
With the advent of online shopping's biggest weekend of the year, are Irish retailers up to the online challenge?
This year, Cyber Monday, the biggest day in the retail sector’s calendar is officially on Monday 2nd December. Savvy shoppers however know that Cyber Monday deals have started to creep nearer Black Friday so they’re ready at their keyboards at 12.01 on Friday morning to secure the best bargains in fashion, electronics and homewares amongst others. Retailers understand that by extending this crazy cyber shopping period, they can maximise their sales and ultimate profits. From all the reports surrounding the run up to Christmas, it’s easy to think that the Irish retail sector is booming, especially online! But is it all smoke and mirrors for domestic retailers and have they been able to take full advantage of their online audiences?
It’s a worrying time for the retail sector. A relatively cool and wet summer coupled with the uncertainty of Brexit has done much to dampen consumer confidence and spending has taken a hit. Retailers are exploring every avenue to maximise their sales and in this era of technology, surely an online store would be a given. Nowhere has online shopping been so embraced than by the Irish. Ecommerce sales are expected to rise by 12.9 per cent to €2.2 billion in the Republic this year, according to a recent report by research company IBIS World. This marks a more than doubling of revenues since 2010 when ecommerce sales totalled €1.05 billion. However, a survey conducted by PayPal last year showed Irish consumers are more likely to opt for international online stores than local ones. It found that Irish people are the biggest international online shoppers in the world with 84 per cent buying from overseas sites. Amazon, Ebay, ASOS and AliExpress are all hugely popular international ecommerce sites (if the number of parcels being delivered to the Brightwater offices for our shopaholic consultants is anything to go by) and as payment methods become more convenient and secure, industry revenue is forecast to rise even further.
Investigations by retail bodies in Ireland have shown that Irish retailers are letting sales slip through their fingers in favour of overseas websites. While the big-box retailers and large Irish companies like Dunnes Stores have an impressive online offering, it’s the SMEs that are really inadequate in this regard. In 2018, an eye-opening report from the IE Domain Registry revealed that just three in 10 SMEs can take orders through their websites. That’s a shocking statistic and given that they could be taking a hefty slice of the €2.2 billion spending pie, it’s incredibly remiss and short sighted of these companies not to invest in their ecommerce strategies and their infrastructure to make their websites more appealing and user-friendly. They need to improve their capabilities in areas such as online marketing, customer data analysis and website design. Some SMEs, although unable to have their own online presence for various reasons, still recognise the importance of maximising their potential audience and have opted for other online routes. Whilst not having to incur the expense of setting up their own online store, they still have an online presence by way of an intermediary. The retail site, Market Street, a small Irish business based in Dublin is an excellent example of a site showcasing the carefully curated products of a wide range of Irish designers and artists who would not necessarily have the funds or technical knowledge to develop their own online presence.
With commercial rents on the rise and so many retailers facing increasing international competition, the need for an online offering is stronger than ever. Penneys (Primark in every other country bar Ireland) is the notable exception to retailers online, having made a strategic decision not to have an online retail presence partly due to the rapid turnaround and price point of their products. They do however have a strong social media following so that helps their brand but they are the exception rather than the rule when it comes to retailers reaching their full potential. There is plenty of help available be it a representative body who can offer advice on what retailers need to get online ready, state bodies that can offer grants or colleges that can offer courses for existing staff. Jobs that have been created as a result of e-commerce include ecommerce business analysts, ecommerce specialists, digital marketing specialists and web designers who all can be recruited at graduate level. For those retailers who say “we can’t afford the initial investment”, the question should be “how can you afford not to?”
Brightwater’s Retail, Marketing and IT divisions have an extensive network of candidates who have superb experience in e-commerce. I f you would like to have a confidential conversation, please call us on (01) 6621000 or email [email protected]