SMEs missing out on Ireland’s €12.3bn e-commerce market
15 November 2019 | 0
While 31% of Irish SMEs have no website, just 32% of those that do can actually take orders or process transactions through their site. These findings come from the SME Digital Health Index 2019, which analyses Irish SMEs and consumers’ attitudes to digital technology.
By not selling online, David Curtin, CEO, IE Domain Registy said SMEs are losing their share of Ireland’s €12.3 billion e-commerce market.
It found that while 45% of Irish consumers plan on buying products online or in store on Black Friday or Cyber Monday or both, just 32% of Irish SMEs can take sales orders or process transactions through their website.
Online shopping is ‘important’ to 59% of consumers, according to the report. Further, 53% of Irish consumers believe that it will eventually replace traditional bricks-and-mortar shopping. That same number want local high street shops to offer a full online shopping service. Nearly half (48%) of all participants only visit brick-and-mortar shops for everyday necessities but purchase other items, such as clothing and electronics, via online retailers.
After Brexit, 45% of Irish consumers say their shopping habits will change. Of that group, 30% will shop online more.
These findings display a disconnect between consumer expectations and Irish SME’s abilities and desire to meet them. For example, while 63% of Irish consumers think a business is outdated if it does not have a website, near one third (31%) of Irish SMEs do not have one.
However, 87% of Irish SME’s have a digital asset of sorts (e.g. a Facebook page, a website). While 27% of businesses had a mobile-optimised website in 2014, that number has jumped to 76%.
Plus, 72% of SMEs say that being online has boosted awareness of their business. The benefit of having a website was apparent; 73% say it contributes to their offline sales, while 53% say it generates at least 10% of their monthly income.
Barriers to digital
As part of the Index, IE Domain Registry conducted a Digital Health Assessment’ to measure Irish SMEs’ digital capabilities in three key areas; communicating, transacting, and boosting (e.g. using software to enhance productivity).
Overall, Irish SMEs communicating was deemed ‘good’, transacting was ‘fair’, and boosting was ‘mediocre’. It found few differences cross Irish regions, which suggests there is a nationwide skills deficit.
For 8% of SMEs, poor broadband connectivity is the main hurdle to investing more in digital. Indeed, 29% of SMEs in Munster, 33% of those in Leinster (excluding Dublin), and 39% in Connacht and Ulster rate their internet speed as ‘average, ‘poor’, or ‘very poor’. Yet, 66% of Irish SMEs doubt that the government can deliver the National Broadband Plan in its current form.
“Irish consumers expect their local SMEs to provide the same experience as multinational retailers like Amazon. They want to see what their local shop has to offer, buy their product online, and have it delivered straight to their door,” said David Curtin, CEO, IE Domain Registry, commenting on the report’s findings.
“For SMEs, the cost and time required to implement initial digital communication and transactional services are actually very small compared to the substantial payoffs of having an online, e-commerce-enabled website. Despite this, however, most Irish SMEs continue to use their websites like static ‘digital business cards’, with little more than a home page and contact information. By remaining digitally under-developed, SMEs will continue to lose their share of Ireland’s €12.3 billion e-commerce market to international online competitors.”
Building Ireland’s regional digital hubs
“IE Domain Registry believes that lasting, substantive change in Irish SMEs’ adoption of and attitudes towards digital technology can occur only with large-scale action,” added Curtin. “That’s why we’re recommending that the government takes a ‘regional digital hub’ approach to its national digitalisation initiatives and the National Broadband Plan.
“While total inclusive digitalisation of Ireland should be this country’s ultimate aspiration, it is not practical in the immediate term. We need to prioritise digital skills training and internet infrastructure upgrades in smaller towns and regions with high growth potential, rather than isolated townlands and villages. These areas will be the most likely to quickly generate economic and social returns on investment for the local community and for the Exchequer.
“In places like Sligo Town and Gorey in Wexford, where there are targeted digital activation campaigns and physical digital hub co-working spaces, citizens and businesses have benefited from job creation, increased revenue for high street shops, and new ways of learning at local schools and education institutions. With reduced commuting distances and time-saving digital tools, overall quality of life is better. The rest of Ireland needs to follow their example.”