Fifth of SMEs ‘will never’ be convinced of digital transformation

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The IEDR's annual Digital Health Index shows most companies still don't see the benefit of online trading

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Billy

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8 December 2017 | 0

Billy MacInnesIt’s official. One fifth of Irish SMEs aren’t bothered about having a website. And most of them appear to like it that way. As the IEDR, which revealed the figure in its latest Digital Health Index points out, “it is clear that there will always be a cohort of SMEs in Ireland that will never have a website or any online presence whatsoever”. Later, it adds “it is unlikely we can convince them otherwise”.

Now, we might consider that to be nothing more than stating something that’s self-evident but it’s the figure that’s still a surprise. “In this report, 19%, have no digital assets,” the IEDR states, adding: “These business owners claim that because the majority of their business is word-of-mouth, going online is not necessary.”

Drilling down further, the IEDR reports that just over half of those without a website said there was “no need” for one in their industry, 18% didn’t have the time, 9% cited a lack of finance and a similar percentage pointed to a lack of expertise. A fifth of them claimed they were being prevented from going online because their Internet service was so poor.

The research also found that a quarter of refuseniks were being deterred by the cost of building and maintaining a website. Additionally, three quarters of those without a website said they had “no intention to build a website in the near future and just under half of them believed there was no advantage to be gained in having a website”.

The strange thing is that this appears to be at variance with the mood among consumers. According to the IEDR, 78% of consumers believe all Irish business should have a basic website with contact details and opening hours at the very least. Two-thirds claimed a business without a website was out-dated and 54% said they would shop with a competitor if they couldn’t find their preferred business online. Almost 30% said they didn’t trust a business that had no online presence.

At first sight, those figures should be alarming for SMEs who have, to date, refused to set up their own websites. However, it should be noted that one in five consumers don’t care whether a business has a website, almost exactly the same number as SMEs who don’t care whether they have their own website or not. What if the former are the main customers of the latter?

As for those SMEs that did have websites, only 40% were able to take orders online and 63% did not promote their services online. As the report notes: “Irish SMEs that have digital assets and also engage in e-commerce are a minority: only 26% do, either directly, through their own website, or indirectly, through a third-party platform like eBay, Done Deal or Just-Eat.” Most of those who did not engage in e-commerce believed it was irrelevant or didn’t have the volume of sales to justify it. There were also concerns over shipping, red tape and credit card fraud.

If that is the case, it suggests that, at least for the moment, many SMEs with websites are not really using them in a way that brings them a massive advantage over those who don’t. They also face the danger of deterring customers if they don’t get their online presence right. The report found that two-thirds of consumers would be less likely to use the services or do business with a business that had a poor online presence.

So that might be another argument for those who choose not to have a website: if you don’t have a website you can’t have a bad one. Or, as the IEDR puts it: “Websites are virtual shop windows, and if it is a poor user experience, it can be worse for a business than not having one at all.”

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