Online shopping and the Brexit opportunity for Irish retailers
Consumer research points to opportunities for domestic retailers to increase their market share, writes Niall Savage, Partner, Head of Retail at KPMG Ireland
2022 will be an important year for Irish retailers, both online and in more traditional outlets. KPMG recently carried out a survey of Irish consumers to assess current attitudes towards shopping habits, and it’s clear from our data that global factors such as Covid-19, Brexit, and the advancement of digital technologies will continue to disrupt the retail market.
ONLINE CATCHING UP WITH TRADITIONAL SHOPPING
It’s no surprise that more consumers are doing more shopping online than before the pandemic. Over the recent Christmas period, more than one in four (28%) of Irish shoppers spent more money online, compared to 2020. Over half of consumers (56%) are shopping online more than before the pandemic. Meanwhile, 46% are happier, post-Covid, to buy products from a supplier without any physical store than they were prior to the pandemic, and 43% are now buying products in physical stores less often than they were before.
In fact, 89% of people in Ireland now either shop online as much or more than they did before the Covid-19 pandemic began, and 83% are either more likely or as likely to buy products from websites that do not have any physical stores.
Grocery shopping still, unsurprisingly, remains the activity with the fewest online shoppers, with 88% of consumers still preferring to buy more of their produce in store. However, clothes and fashion have seen a significant increase in recent years, with 30% preferring to buy online more often, 29% buying both online and in physical stores, and 38% shopping more in store. We expect that it won’t be long before the online clothes market overtakes sales in physical stores.
PRICE AND LOCATION REMAIN THE MAIN DRIVERS OF RETAILER CHOICE
When it comes to factors driving the choice of retailer, some things have not changed. Price and convenience remain the two key factors. Buying Irish goods ranked relatively low for customers, with over two thirds (69%) rating it as their third or fourth preference, and a similar proportion rating ‘supporting local retailers’ as their third or fourth choice (out of four choices in total).
Exactly half of respondents in the KPMG survey stated that they prefer to buy from Irish websites than from multinational retailers when shopping online. So, it’s more critical than ever that Irish retailers focus on ensuring the optimum online experience for their digital customers.
THE BREXIT OPPORTUNITY
Many consumers have eschewed British-based retailers due to Brexit-related additional charges and barriers, with two thirds of Irish consumers now buying less from UK sites than they did previously. Over one third (35%) of consumers claim to have faced additional charges when buying from UK retailers following the country’s withdrawal from the European Union, and more than one third (38%) have not purchased from a UK retailer at all post-Brexit. Alongside the growth of digital and the pandemic, this is yet another opportunity for domestic retailers to increase their market share.
All told, the Irish retail sector is being challenged by an unprecedented range of factors. However, having clear and timely insights into what motivates customers remains an incredibly strong foundation for informed decision-making.
‘It’s critical that Irish retailers focus on ensuring the optimum online experience’