.IE Tipping Point Report 2021

Foreword Prior to the coronavirus pandemic, digital advocates struggled to get large scale buy-in to an online proposition that was developing, albeit much more slowly than current trends demonstrate. However, the fluidity of the business landscape and the sharp escalation in the migration to online, amid three lockdowns, has led to business owners fundamentally re-thinking their operations. Last March, many believed the situation was temporary but with reports of continuing public health measures, longer term planning and investment in online have become more urgent. While there is a more enhanced understanding of the nature and impact of the virus from a medical point of view, it remains challenging for businesses who are struggling to keep up with changing consumer trends. This is precisely why research of this quality is essential for business leaders, who need to better understand the behaviours and thinking of their target audiences. The outputs from this robust research will help e-commerce professionals to keep ahead of the curve and better understand the factors that convince their customers to purchase from them. A degree of slippage in support for home grown indigenous businesses has all the hallmarks of features of pre-pandemic shopping, when online customers were motivated by price, range and customer experience. Stemming this tide will be key to enabling a robust digital eco-system for online businesses to grow and thrive. The fundamentals remain strong though, with twice as many SMEs investing in their online offering. However, a focus on enhancing trust, ensuring reliability and a positive customer experience must be core elements of the 2021 digital journey. On a positive note, a vast majority of online businesses have reported that they are as busy as, if not busier than before the pandemic. While encouraging, it is important that this does not become a trade off with the high street, which faces challenges such as negative consumer confidence trends, town centre decay and lack of retail diversity. Unquestionably, the future of business is omni-channel, with a physical and digital footprint. It is important to stress that concepts are not mutually exclusive; what’s bad for one permeates the other. Therefore, adequate policy responses are needed to ensure a robust shopping landscape where online and bricks-and-mortar coalesce and co-exist together. Lorraine Higgins Secretary General, Digital Business Ireland While vaccines offer Ireland a way out of lockdown, until a critical mass is reached and the population is immunised, our economy and society are set to remain in a state of flux. This flux is accelerating major trends in e-commerce and digitalisation. Behaviours and ways of working that boost sales, cut costs or increase convenience are likely to become permanently ingrained. Few consumers are fully comfortable at the thought of shopping on their local high street and the majority expect either the same or more pandemic restrictions in 2021. Most anticipate shopping for most or all products online this year. In the previous edition of this report, consumers said they had done the majority of their online shopping with Irish SMEs since the beginning of the Covid crisis, not with international retailers. However, it appeared that much of this ‘buy local’ sentiment was rooted in crisis solidarity with Irish businesses. At the time, the report indicated that as the economy emerged from lockdown, Irish SMEs could once again lose out to international retailers if they failed to recognise and hone their competitive advantages, such as trust and reliability, or level the playing field with a better online storefront or website. The 2021 .IE Tipping Point report shows that this reversal has already occurred, despite the economy being more locked down than before. While Irish consumers are still eager to support local businesses through the pandemic, other factors, particularly price and range, have returned to prominence. Irish SMEs need to focus on their USPs and invest their resources in improvements to online customer experience and service, which consumers explicitly value. Despite being overtaken again, Irish SMEs in certain sectors still have plenty to cheer about. Sustained online spending and Government supports mean the majority are positive about their financial outlook for 2021. Those that have invested in their website or online store have reaped the rewards: most say they are busier than or as busy as they were before the pandemic. There is also growing evidence of an understanding of Irish consumer needs. There has been a remarkable shift in the number of SMEs that have invested in their online presence, and a growing cohort of business owners see the future of retail in e-commerce. This report shows that the pandemic is acting as a digital accelerant. Local and national decision-makers planning Ireland’s post-Covid recovery must take this into account. David Curtin Chief Executive, .IE