David Curtin, chief executive, IE Domain Registry
An increasing number of Irish SMEs are setting up websites but research by the IE Domain Registry points to a continuing issue around their commitment to getting transactional online in terms of processing payments and taking orders
Judging by the IE Domain Registry’s (IEDR) latest dot ie Digital Health Index the problem of Irish SMEs not tapping into Ireland’s €8bn e-commerce market is not going away.
The research shows that of the Irish SMEs that are present online, only 32% can take sales orders, 28% can process payments and 35% can accept bookings or reservations on their websites.
“The findings are a mixed bag. There has been some improvement in terms of the numbers of SMEs with websites, but the element that is disappointing is how they are using them,” says IEDR chief executive David Curtin.
“The number that can process payments is the figure to keep a close eye on as an indicator of e-commerce capability. The research suggests that e-commerce is not embedded among Irish SMEs.”
The slow uptake of e-commerce by Irish SMEs is happening at the same time as Irish consumers are buying more and more online – it is estimated that there was an online spend of around €100m between Black Friday and Cyber Monday last year alone.
“Ireland’s €8bn e-commerce market is expected to grow further this year. Irish consumers are spending online, but most of it is going overseas. Parcel Hotel and AddressPal, which allow people to set up a virtual UK address, are seeing huge volumes of packages being processed,” notes Curtin.
“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 sterlingbased websites.”
No online presence
According to the dot ie Digital Health Index, 22% of Irish SMEs have no online presence whatsoever – neither a website nor a social media presence.
When it comes to the reasons why, 38% say that time pressure is keeping them offline and 28% put it down to a lack of expertise. Meanwhile, 27% cite financial constraints and 47% say the choices are confusing.
“Firms citing a lack of knowhow as an obstacle to getting online is a cause for concern. All that’s needed is to take some time with a trusted designer or advisor to establish what type of platform suits a business best,” says Curtin.
“It is a shame that a lack of time and finance are still cited as barriers. These problems can be easily addressed – there are plenty of inexpensive, easy-touse tools that put websites together with basic e-commerce functionality in a few hours.”
Poor broadband was given as a reason for staying offline by 17% of the SMEs with no website. IEDR’s dot ie Domain Profile Report published in February further highlighted the lack of broadband in the regions as a significant problem.
Of the 34,615 .ie domains registered in 2016, 44% were in Dublin, while Cork accounted for 9% of the total and Galway 5%. Co Leitrim recorded the smallest number of .ie domains in the Republic of Ireland – 130 or just 0.4% of the total – while the largest drop in .ie registrations occurred in Co Longford (down 31%).
“Dublin has by far the greatest number of registrations per 1,000 population [70] and Leinster as a province has by far the highest number of registrations overall, making up 66% of the total,” says Curtin.
“Businesses in areas with poor broadband are at a huge disadvantage in terms of using the cloud for example. This needs to be fixed first and foremost and after that digital skills need to be improved to give SMEs the confidence to take the necessary steps.”
The IEDR’s e-commerce website development fund Optimise is designed with this in mind. It helps business owners to plan, develop and implement significant web enhancements to their existing websites.
Now entering its seventh year, the fund has provided technical and marketing consultancy, training and web development services to over 90 Irish companies to date. In 2016 it was valued at €150,000.
“We had an interesting group of Optimise winners in 2016. What was great to see was the number focusing on having mobile responsive websites,” says Curtin.
“The IEDR is looking at what else we can do in terms of supporting small businesses. Sponsoring the Emerging New Business category in the SFA National Small Business Awards is a great way of drawing attention to those companies that are getting e-commerce right.”
Curtin notes that small firms with up to ten employees can apply to avail of basic training on getting online and engaging in e-commerce through the Government’s ‘Getting Irish Citizens Online’ programme. Some €2.3m in grants have been made available to support this scheme.
“The number that can process payments is the figure to keep a close eye on as an indicator of e-commerce capability. The research suggests that e-commerce is not embedded among Irish SMEs”