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Why most Irish SMEs do not bank on making a profit online!

It was late last year when Brown Thomas finally dipped its toe into the world of online sales for the first time. With an estimated spend of 1.25 million euro; Mr Stephen Sealy, Managing Director for Brown Thomas said he is “confident that over 50% of the stores products will be available to buy online for the first time by summer, 2014”.

“It is expected that the stores online presence will spark an interest both among the local consumers in cities where Brown Thomas is currently located as well as potential consumers outside these areas”

 Stephen Sealy, Managing Director for Brown Thomas.

But just why is it, that one of Ireland’s most popular brands has reserved itself for so long from taking a leap of faith into the world online selling?

Although it may seem surprising that it has taken  Brown Thomas over 15 years to endeavour the digital space, a recent survey carried out by iReach (on behalf of Authipay) revealed that in fact less than 20% of Irish companies have any aspirations for online trading.

 

The most common reasons why Irish retailers claimed that they had little interest in online selling were

(a) It was not relevant to their business

(b) There was not enough of an opportunity for them.

One reason Irish companies may still be reluctant to trying online trading is the small number of success stories we have heard to date.

On this small island of Ireland we hear a lot of the horror stories associated with online selling and consumer engagement such as: marketing companies that spam consumers, market shrinkage (i.e. SMS marketing) and the reality of the ROI made from the development of APPs.

Yet despite all the challenges, online selling does have its incentives and certain companies have learnt just how to take advantage of the opportunities within their sector. – The most notable of successors within Ireland include:  Daft.ie, Micksgarage.com, iclothing.ie, and thecorkscrew.ie.

Each of these companies has in their own right proven how the internet can be used not only as a sales tool but as a sales support mechanism.

And according to the most recent figures from the Central Statistics Office figures such opportunities are only going to increase.

Currently the average household in Ireland spends approx. 10% of its €38,000 annual budget online. Groceries is the single biggest category with 20% of this market share, followed by electricity and fuel at 11%, financial services at 10% and clothing at 7%.

Other sources have identified that almost two – thirds of Irish adults currently shop online. Meaning that even in this generation of business owners that cannot see the opportunity in online trading, all is not lost. And as the next ‘tech savvy’ generation looks to be far from reticent, this market place should develop tenfold in the coming years. This theory is supported by Mintel report on e-sales in Europe which suggests a “25% growth in online sales in Ireland year- on – year, which will peak at €2.8 billion annually by 2018”.

If you would like to know more about getting your business online and bringing in more business in 2014, speak to e-Celtic today.

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