Irish consumers expect their local shops to provide the same level of service as Amazon

digital technology
Regional digital hubs
SME Digital Health Index
by Naomi Temple
14 Nov 2019

SME Digital Health Index 2019

Irish consumers have grown accustomed to the accessibility and convenience of e-commerce services like Amazon and expect the same shopping experience from their local businesses, according to our SME Digital Health Index 2019 which was published today.

The SME Digital Health Index 2019, which analyses Irish SME and consumer attitudes to digital technology, shows that almost 6 in 10 consumers (59%) say making online purchases is ‘important’ to them. 45% of Irish consumers plan on buying products online or in store on Black Friday or Cyber Monday or both.

However, less than a third (32%) of Irish SMEs can actually take sales orders or process transactions through their website.

The digital consumer

Irish consumers spend €850,000 online every hour, which helps to create an e-commerce market worth €12.3 billion*. Online shoppers want the same level of convenience from their local SMEs that they get from larger retailers.

It jars if a business is not online. Nearly two-thirds of consumers (63%) think a business is outdated if it doesn’t have a website.

They are also patriotic: 81% believe that buying Irish is important. However, in an age of digital convenience, 54% of them will shop with a competitor if their preferred retailer isn’t online, and much of this is spent abroad.

.IE - SME Digital Health Index 2019 - Online services Irish consumers want from their local shops

Benefits of an online presence

Increased use of digital is helping SME owners connect with customers, increase their revenue, and build more innovative and relevant products and services.

Just under three-quarters of SMEs (72%) say that one of the biggest benefits of being online and digitally savvy is an increased awareness or understanding of their business among consumers. A third believe that their online presence has led to increased revenue, while a similar number believe it saves them time.

.IE - SME Digital Health Index 2019 - Benefits of an online presence

Barriers to digital

As part of the SME Digital Health Index, we carried out a ‘Digital Health Assessment’ to measure Irish SMEs’ digital capabilities in three key areas—communicating, transacting, and boosting (such as using software to enhance productivity). Their abilities were graded on an ABCDEF scale, with A being ‘excellent’ and F being ‘poor’.

Overall, Irish SMEs graded C (‘good’) for communicating, D (‘fair’) for transacting, and E (‘mediocre’) for boosting. There were very few appreciable differences between Ireland’s regions, indicating that there is a digital skills deficit across the country.

Nearly a third (28%) of Irish SMEs say that a lack of time is a major barrier to doing more online, while 1 in 12 say that poor broadband connectivity is the primary reason that they aren’t investing more resources in digital.

.IE - SME Digital Health Index 2019 - Barriers to digital

Building Ireland’s regional digital hubs

Commenting on the report’s findings, our Chief Executive David Curtin said:  

“We believe that lasting, substantive change in Irish SMEs’ adoption of and attitudes towards digital technology can occur only with large-scale action. That’s why we’re recommending that the Government takes a ‘regional digital hub’ approach to its national digitalisation initiatives and the National Broadband Plan.

“While total inclusive digitalisation of Ireland should be this country’s ultimate aspiration, it is not practical in the immediate term. We need to prioritise digital skills training and internet infrastructure upgrades in smaller towns and regions with high growth potential, rather than isolated townlands and villages. These areas will be the most likely to quickly generate economic and social returns on investment for the local community and for the Exchequer.

“In places like Sligo Town and Gorey in Wexford, where there are targeted digital activation campaigns and physical digital hub co-working spaces, citizens and businesses have benefited from job creation, increased revenue for high street shops, and new ways of learning at local schools and education institutions. With reduced commuting distances and time-saving digital tools, overall quality of life is better. The rest of Ireland needs to follow their example.”

For further information, visit our SME Digital Health Index page where you can download the full report, supplementary appendices and regional factsheets.

*Growing Small Business Through Online Trade, Department of Communications report, May 2016