A broader online retail presence is becoming crucial to Irish stores as more shoppers are browsing products online but buying them in bricks-and-mortar retail outlets, writes Ian Campbell
TEN YEARS ago, before the dotcom bubble burst, retailers were encouraged to pursue “brick-to-click” strategies and take their businesses online. Aside from a few niche “e-tailers” who sold Irish products to the US, few took it seriously in Ireland, put off by the cost of building e-commerce sites and a small online population that was still using dial-up modems.
Since then, broadband has become ubiquitous and online shopping a familiar experience. But there is evidence to suggest that it took the demise of the Celtic Tiger to really make Irish retailers take the web seriously.
Many have responded to the recession with a new enthusiasm for online trading and some have seen a dramatic growth in sales, according to Michael Veale, chief executive of Buy4Now. The e-tailing solutions company, which celebrates 10 years in business this year, has signed up six high-profile retailers in the last six months.
“While retail in general is down, we have seen substantial increases in online sales over the last 18 months. Superquinn, one of our oldest clients, has had its best 12 months, and the Arnotts online store has seen a 100 per cent increase in sales since it relaunched last November,” he says.
In both cases the sales spikes were achieved by revamping underperforming websites, improving the shopping experience and expanding the number of items for sale.
John Smith, head of online shopping at Superquinn, identifies two elements that helped the supermarket chain achieve a 25-30 per cent annual increase in online sales. “We worked on getting the customers through the site as effectively as possible, and we reduced the delivery charge. A number of years ago the cost of delivery wasn’t a huge issue – but that changed with the recession.”
The high cost of delivery has been identified as a barrier to online shopping in Ireland, prompting customers to abandon their shopping carts within a couple of clicks of checkout. Veale says e-tailers were overcoming the problem by offering free delivery when customers spent over a certain amount.
Surveys show most people shop online because of convenience, so sites have to be easy to navigate, with information just a click away. Adding product pictures and nutritional information has helped Superquinn punch above its weight. “We stole a lead over Tesco, which was slow to match these features in Ireland,” says Smith.
Google recently criticised Irish retailers for having a poor web presence compared to European counterparts, a view that Michel Veale believes is badly out of date. “Since early 2009, when the recession really kicked in, local retailers have been taking their online presence much more seriously. Before that, they saw it as a nice marketing tool. What’s happened now is that people aren’t coming through the doors, so they have to go to them.”
As evidence, he cites six new Buy4Now customers – Carphone Warehouse, PC World/Currys, DID Electrical, ESB, Topaz Local Fuels and Pamela Scott – which have all launched or are about to launch websites built on its e-commerce platform.
Some of Ireland’s biggest retailers, however, will find it hard to duck Google’s accusatory finger. Eason and Brown Thomas were both singled out as poor exponents of e-tailing. An Eason spokesperson said a new online offering would be implemented next year as one of a number of key changes in the company’s approach to retailing. Brown Thomas was less committal and would only say it was “not ruling out the option of retailing online at some stage”.
With 75 per cent of Irish adults now subscribing to an internet connection, the market for online shopping is bigger than ever – but the statistic is tempered by the sobering reminder that the entire country only equates to the size of Greater Manchester. “If you are a pure-play e-tailer, with no bricks and mortar presence and you are only trading in the Irish market, it is going be very hard to make it viable,” warns Veale.
Joan Mulvihill, chief executive of the Irish Internet Association, offers another worrying insight. “Irish consumers out-shop their European counterparts, yet Irish e-tailers underperform compared to their European counterparts. Most online shoppers are shopping on overseas sites.”
It is difficult to compete with UK fashion brands with sophisticated websites where clothes are cheaper, but elsewhere, Mulvihill argues, Irish e-tailers are best-in-class. She name-checks Mick’s Garage, which sells car parts, and Curious Wines, as successful boutique e-commerce sites.
For high street shops, the perceived wisdom is that they should pursue a multichannel approach. The online presence should replicate what’s happening in the retail outlet, not just in the range of products and prices but with special offers and loyalty schemes. Superquinn put this into practice with its rewards scheme. When users register online, any points accrued in the store are automatically transferred to the website.
The principle behind multichannel is less about selling products online and more about the seamless integration between high street and virtual shop fronts. This fits with a phenomenon Yahoo christened Robo – research online buy offline – a consumer practice that makes a strong online presence imperative.
Veale describes the web as a window to the bricks-and-mortar operation, where 10,000 items rather than a few hundred should be on display, not only because they might sell a few, but because people will find them with search engines and perhaps discover the store for the first time.
Shopping will always be a “touch and feel” experience for some items, but that doesn’t negate putting them on the web, says Veale. “It’s important to show the range you have online to entice people into the shop. Arnotts put up a €3,000 suite of furniture that they won’t sell in an online transaction, but there is a chance that they will get people in-store to buy it.”
