How Businesses Use eCommerce in Ireland: Top Take Aways

This morning, the Digital Marketing Institute launched a new report with the Ahain Group entitled ‘Social Business: eCommerce & The Digital Dynasty’. Exploring current and future eCommerce trends, both in Ireland and internationally, an overview of the key points can be found below.

Irish eCommerce

43% of Irish consumers purchased online last year, and 2.6 million Irish people regularly shop online.

€4.1bn was spent on online shopping in Ireland in 2011, up from €2.96bn the previous year – but 75% of these purchases went through companies outside Ireland.

The report found that there is huge opportunity for Irish retailers in the domestic market, “if they can attract customers with products, fair pricing and incentives.”

Littlewoods Ireland

Littlewoods Ireland is one case study explored in the report, examining how the business successfully evolved from a catalogue-based model in 2007 to conducting 83% of its sales online today.

Global eCommerce

Global eCommerce sales hit just under $1.1 trillion in 2012, with 1bn people expected to make online purchases in 2013.

The UK and US have long dominated international eCommerce spend, but are now beingovertaken by Asia as the online economies of China and India continue to flourish.

In 2013, Asia is forecast to supersede all other regions by more than $50,000m in online profit.

Tesco

Tesco is a prime example of a business that successfully expanded its online operations internationally, particularly in Asia. After extensive cultural research, they set up virtual grocery stores in South Korean subway stations to target time-pressed commuters, establishing strong competition in the existing market.

What Do We Buy Online?

The report highlights Eurostat figures on online purchases by territory, which uncovered some interesting contrasts. While travel, clothing and other goods are relatively consistent across the EU, the UK was well ahead of Ireland for online food and grocery shopping (20% of people compared to 4% in Ireland).

The Challenges of eCommerce

Many businesses venture into eCommerce in an effort to reduce the overhead costs associated with physical stores. But the report found than there are a number of hidden, and sometimes crippling, eCommerce costs that businesses often fail to consider until it’s too late.

With Littlewoods Ireland, the report found:

• If a site offers free returns, the average rate of returns will be 31-33%
• If the customer has to incur the postage cost return rates, this drops to 21-24%
• Clothing can have a return rate as high as 70%, the average rate is 45-50%
• Electronics is one of the lowest return categories with a rate of 7-9% on average
• A significant proportion of returned goods are opened or damaged, and therefore unsuitable for re-sale

Aside from the costs associated with delivery and returns, online retailers also need to take issues such as fraud and warehousing into account.

For more tips on building a user-friendly eCommerce website, and further case studies of Amazon, John Lewis and more, download the full report.

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