Irish consumers are set to spend in excess of €100 million online this Black Friday and Cyber Monday but less than a third of domestic SMEs have a website to serve them with, according to the latest report from the IEDR.
According to the latest figures, 22% of Irish businesses still have no online presence.
The research also shows that just 32% of online SMEs can take sales orders on their websites; only 28% can process payments; and 35% can accept bookings or reservations on their websites.
While these numbers are an improvement on the last dot ie Digital Health Index report in April 2016, they suggest that Irish SMEs are still not tapping into the growing Irish e-commerce market valued at €9 billion this year.
Despite their lack of e-commerce ability 81% of SMEs said that their website was important or very important for driving future sales growth; 77% saw it as a driver of generating sales; and 57% said it was a point of transaction to capture and process sales.
IEDR’s consumer research revealed an increasing willingness to spend online. Consumers reported that their online spend has increased by 41% over the last two years. Some 86% plannd to spend online over the Christmas period; 85% would prefer to spend on an Irish website. However, Irish SMEs’ low engagement in e-commerce makes this difficult.
The overall dot ie Digital Health Index score fell for the first time since research began in May 2014, to 41.76, the second lowest score. In many cases, SMEs are using fewer digital assets, like websites and social media.
Barriers
Furthermore, one in six offline SMEs, said poor Internet connectivity was preventing them going online.
Two-thirds of offline SMEs say they did not intend to build a website in the future, primarily because they see no need in their industry. Of those who used a professional developer to build their website, 84% rated their developer’s professionalism as ‘good’ or ‘excellent’.
On social media usage 72% of SMEs said it had a positive impact from social media; of that figure, 97% said it had increased awareness of their business and 81% said it had increased (offline) sales.
David Curtin, chief executive, IEDR, said: “It is alarming that in 2016, only one third of SMEs can sell or take payments online. The failure to properly tap into the growing €9 billion online market may have long-term consequences for Ireland’s economy, particularly for rural communities given their significant dependence on SMEs.
“If consumers build a relationship with British online SMEs, the business may be irretrievable for Irish SMEs. This issue will be exacerbated by Brexit, with Irish consumers migrating to sterling-based websites and travelling across the border for a better shopping experience.
“As consumers, we are spending more on the Internet than ever before, yet our own businesses just aren’t there to serve customers. With Christmas less than a month away, and an appetite among Irish consumers to spend locally, SMEs are missing out on new customers.
“Unsurprisingly, the biggest barrier to SMEs getting online is a lack of time and lack of finance. This is a shame, however, because these problems can be easily addressed; there are plenty of inexpensive, easy-to-use tools that put together websites with basic e-commerce functionality in a few hours or less.
“However, there are infrastructural deficiencies and business support issues that can only be properly fixed through collaboration between industry and government, particularly broadband availability. Funding also needs to be directed to Local Enterprise Offices and Chambers of Commerce in rural areas to support entrepreneurs making the leap online.”
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