.IE Tipping Point Report 2020

Foreword The Covid-19 crisis has been a tipping point for Ireland for many reasons. As a nation, we have endured months of isolation and a suspension of the natural order of things. Many of us have lost loved ones. Thousands of businesses have closed, unemployment has soared, and uncertainty prevails. Another Covid-19-induced tipping point has more positive long-term ramifications for Ireland’s economy. In this report, we have recorded a swing in online retail sales to Irish SMEs, away from their historically dominant international competitors. This is a significant milestone. The Covid-19 crisis has encouraged consumers to look closer to home for goods and services. While perceptions of quality and trust have played important roles in this, a major proportion of the consumers we spoke to said that they simply wanted to support Irish businesses through a challenging period. However, a swing of this nature is not necessarily a permanent one. It is entirely possible that once the economy returns ‘to normal’, and businesses are no longer experiencing restricted trading, Irish consumers will not feel the need to be as supportive as they have been. They may also return to buying from international retailers, which they still regard as cheaper and better stocked, with superior online storefronts and services. On the latter point, Irish SMEs are still far behind; as many as 80% have invested no money whatsoever in their online services since the Covid-19 crisis began. Irish consumers are spending more online with Irish SMEs that have pivoted to help save their businesses during the lockdown. We need to press the advantage and ensure this is not short-lived. So far the signs are good for this omni-channel approach. Acknowledging the significant allocation of government funding secured by business groups for the recovery of Ireland’s SME sectors, it is important to ensure that finance is dedicated to investment in digital tools and digital skills for SMEs. Properly equipped to meet consumer demand, small businesses can play a major role in reigniting Ireland’s post-Covid-19 economy. David Curtin CHIEF EXECUTIVE, .IE Recent events inform us that never before has the need for a digital business model been more acute. As Covid-19 engulfs our world, it has brought to the fore the pressing need for an omni-channel, bricks-and-clicks approach to business, a fact that is corroborated by stratospheric online retail sales figures over the past number of months. Interestingly, the pandemic signified a major shift in Irish consumer shopping habits as they opted to support home-grown businesses, which demonstrates an economically conscious shopper. Whether this behavioural pattern will be sustained depends on the investment of Irish businesses in their online offering. While an integrated, omni-channel business model must become an elevated priority in order to offset the threat of a return to a leak in spend to international businesses, further efforts will have to be made to bridge the digital divide. The complexities of such challenges require a multi-dimensional response. Personalisation, AI, flexible payment options, faster delivery times, and seamless customer journeys will be a key focus for discerning e-tailers, who must seek out opportunities to differentiate themselves in a busy online marketplace. On a macro- level, the timely delivery of the National Broadband Plan and further take-up of the Digital Trading Online Voucher will help us become a leading digital economy. However, getting the fundamentals right will be crucial. The human resource requirements of many businesses will change, and having a suitably trained talent-pool to reflect the changing employment needs will be key as we enter a new era. Lorraine Higgins CHIEF EXECUTIVE, DIGITAL BUSINESS IRELAND 1