Essential Merchant Services & eCommerce Growth in Ireland
In just a few short years, the global eCommerce market has grown from a niche industry to an international powerhouse. In fact, worldwide growth rates for eCommerce have remained around 25% for the past three years. While eCommerce makes up less than 10% of total retail spending worldwide, its annual growth is more than 4 times that of traditional retail sales.
That means eCommerce is poised to make up nearly 15% of total retail sales by 2020. With global retail sales forecast to be over $27 trillion by then, the global eCommerce market has a forecast value of over $4 trillion by 2020.
This is only the beginning of global eCommerce growth. With large, untapped markets still available to merchants, and a growing demographic of new internet users in emerging economies, it’s only natural that retail sales will continue to migrate online.
Avenues for Growth
With such a large, fluctuating marketplace, it makes sense that some areas experience greater growth than others. As you can imagine, areas with less technological infrastructure carry the greatest possibility for growth. Likewise, areas saturated with technology are experiencing limited growth by comparison.
So, how is it that Ireland, an area with 93.8% internet penetration, is sustaining such astronomical online sales growth? Here, we’ll examine some of the reasons eCommerce services in Ireland are growing so rapidly.
Ireland is Going Green
Ireland has long been associated with the color green. Green is on the national flag, four-leafed clovers and the lush green countryside have given Ireland the moniker the Emerald Isle. And of course, green is worn around the world to celebrate Irish culture on St. Patrick’s Day. When it comes to merchant services in Ireland however, the only green Irish vendors and business leaders are concerned with is cash, and that “green” is primed for some significant growth.
Online retailers in Ireland have experienced revenue growth rates of 45% for two consecutive years, and it doesn’t look to be slowing down anytime soon. In fact, over the past two years, the Irish online economy has grown 9 times faster than the Irish economy overall. Wolfgang Digital chief executive Alan Coleman claims, “we can expect this rampant growth to continue.”
Indeed, according to a report from Virgin Media Digital, Irish consumers will double their online purchases in the next five years. The number one reason for such astronomical growth is pricing.
Irish consumers, like consumers across the globe, are turning to online outlets to find the best deals available, and save a little green.
Lower Costs, Better Value
eCommerce services in Ireland offer consumers better value, and data from surveys show it. Nearly 75% of Irish consumers site lower costs as their number one reason for shopping online. Irish consumers aren’t alone. The global growth of eCommerce is due to a wide variety of reasons, however, the cost is almost always at the top of the list.
Shopping isn’t just about getting a needed or wanted item or service, it’s also about finding that product at the best available price. Online shopping offers lower prices and better comparison shopping than traditional retail alone.
For example, Irish consumers took advantage of “Black Friday” discounts offered by online retailers. Instead of waking up early the day after Thanksgiving to fight crowds and long queues at traditional retail outlets, Irish shoppers went online to save money on holiday shopping.
In the fourth quarter of 2016, Irish eCommerce experienced 28% growth in transactions and 21% growth in revenue. That means a greater number of consumers bought more online while spending a little less per transaction. This data shows online sales offer lower costs and better value for savvy Irish consumers.
While savings and cost are the number one reason for such explosive eCommerce growth in Ireland, lack of local availability is the second reason so many Irish citizens are turning to online shopping for their needs.
Lack of Local Availability
Irish consumers cite a lack of local availability as the number two reason they turn to the web to find goods and services. They’re not alone. Global consumers can find, buy, and receive just about anything from just about anywhere with the simple click of a button.
However, local brick and mortar shops have limited space to stock items rarely purchased. This means that many goods and services are simply not available to consumers in sparsely populated areas, and sometimes not even in urban areas.
Mostly Rural Population
Ireland has one of the highest rates of people living in rural areas of the European Union. While 35% of Ireland’s population lives in cities, around 42% of Irish people still live in rural areas. With such a large portion of Ireland’s population living in rural, sometimes isolated areas, the availability of many products and services can be scarce.
Almost 60% of Irish consumers who shop online claim they would rather buy the product from a local shop if they could find it locally.
Online merchant services in Ireland help to bridge the gap between the needs of citizens in rural areas and the ability of local merchants to stock all the products required. In other words, eCommerce services in Ireland are better able to meet the needs of consumers through the virtually unlimited availability of goods and services.
This unlimited availability in the eCommerce marketplace is incredibly convenient for consumers. Convenience is the third reason Irish consumers are turning to eCommerce for goods and services at such a high rate.
Until recently, shopping only happened in specific locations at specific times with a limited supply of goods. The online marketplace has decentralized the shopping experience. This means that consumers can shop anywhere, at any time and can find just about anything they’re looking for.
Door to Door Delivery
Because a plurality of Irish citizens live in rural areas, convenience is a major factor in the booming eCommerce market. Online shoppers don’t need to drive into a city to make a purchase. That means parents don’t have to lug children on tedious shopping excursions, consume gas driving to and from the store, and don’t have to waste valuable time fighting traffic to commute.
What’s more, traditional shoppers aren’t guaranteed that the products they need will even be available. Online shoppers can quickly and easily find the products they need without having to make long commutes in the hopes of finding what they’re looking for.
Finally, eCommerce providers ship products right to the customer’s door, many times in as little as a day or two. Online merchant services in Ireland aren’t just more convenient for product purchasing, they can also save consumers time and money by cutting out costly trips to traditional retail outlets.
Another reason online sales are booming in Ireland is the discretion that eCommerce provides. In many rural areas, local shops are owned and operated by members of a community. Many purchases are private in nature. eCommerce services in Ireland allow consumers to purchase health products, undergarments, adult products, and other items of a personal nature discreetly and efficiently.
Another cause for such rapid eCommerce growth in Ireland is the increase in transactions. Sales transactions increased by 30%. With fewer obstacles and more options for online shopping, more and more consumers are naturally turning to the web to finalize transactions.
There are a number of reasons for the growth of transactions. These include familiarity with the process for repeat shoppers, growing comfort with technology, better security for online transactions, and much more.
It should come as no surprise that first time online shoppers are hesitant to make large purchases. First timers want to dip their toes in the water to test out the process before they invest their hard earned cash. According to eCommerce News Europe, “repeat purchasers spend more, sometimes as much as double what first-time purchasers spend.”
Consumers with a positive first experience are more likely to repeat the process, completing more of their shopping online in the future. In other words, as eCommerce services in Ireland become better at serving the needs of their customers it reinforces continued use.
Ireland is Going Mobile
One of the biggest changes in eCommerce services in Ireland is the migration from desktop browsing to mobile traffic. Approximately 45% of Irish website traffic originates from mobile devices.
With only 42% of Irish web traffic originating from desktops, this is the first year that mobile traffic has exceeded desktop use, and the trend is not likely to reverse.
In fact, Ireland is one of the biggest mobile internet users in the world. A recent study indicates that Ireland has the highest penetration of mobile web users anywhere in Europe, North America or South America.
With such a large percentage of Ireland using mobile devices for a majority of their internet browsing, it’s only natural that mobile commerce is on the rise.
What’s more, mobile shopping is becoming a more personalized, intuitive experience for shoppers. Consumers can comparison shop right in a store, finding more information and better pricing online while still being able to interact with a product before they buy.
Mobile shopping is also creating new avenues for eCommerce, like social shopping. When consumers see items they like in social media feeds such as Instagram or Facebook, they are able to quickly find products on their phone and make purchases.
For example, Facebook launched a conversion focused ad format called Dynamic Product Ads (DPA) in the second half of 2016. Early adopters of the DPA program reported that “the best revenue figures they have seen from Facebook yet.”
Mobile merchant services in Ireland are utilizing social tools to spur the growth of eCommerce on the Emerald Isle. With so many people already engaging social media, social shopping presents an incredible opportunity for online merchants to advertise new products and offerings to customers. It gives merchants the ability to reach consumers on a platform they’re already familiar with and use on a regular basis.
Ireland Needs A Holiday
One of the largest factors concerning the astronomical growth of eCommerce in Ireland is the tourism industry. It almost seems like people in Ireland all decided they were in need of a holiday.
While overall online sales in Ireland are experiencing rampant growth, Irish travel sites grew at an incredible 79% rate. It’s not just that more people spent their hard earned cash on travel sites, the growth was also due to higher ticket prices as well.
The growth was also driven by more website traffic. 2016 saw an increased rate of 16% to Irish travel sites. This increase of traffic, paired with a 23% conversion rate increase, is a big part of the rapid growth of the overall Irish eCommerce economy.
The average transaction value for sales on travel sites rose as well. Customers that booked travel through eCommerce sites increased their spending by 15% in average transaction value.
In short, more customers are visiting Irish travel sites, more of them are making purchases, and when they do, they’re spending more.
What Does Brexit Mean for Irish eCommerce Growth
While eCommerce services in Ireland have experienced substantial growth over the past two years, the post-Brexit EU digital marketplace has yet to be determined. For Irish shoppers looking to buy from online sites housed in the UK, shopping is about to become more expensive. Due to the English exit from the EU marketplace, additional taxes and customs will most likely be imposed on products crossing the UK/Irish border, negatively impacting online merchant services in Ireland.
This should add extra incentive for Irish shoppers to support Irish online retailers. Savvy Irish consumers will privilege Irish retailers to avoid paying additional costly fees.
Furthermore, “Britons, the majority source of demand for Ireland’s international trade, are now browsing the Irish online markets with weaker Sterling.” The drop in value of the English Pound may cause Britons to look elsewhere for online wares.
Because British nationals make up the largest customer base for Irish online retailers, they’ll need to find a new customer base to make up any lost revenue caused by extra taxes and customs charges caused by Brexit.
While the Brexit vote may negatively impact the Irish online economy and constrict the flow of goods within the United Kingdom, it may open up new avenues for growth on the Continent.
EU Digital Single Market
Because Brexit will most likely cause British citizens to buy less from Irish online retailers, Irish businesses will need to look to other markets to make up the shortfall. The most appealing option for Irish businesses will be to take part in the coming EU Digital Single Market (DSM).
The European Union has made the DSM a priority. The goals of the DSM are access to online products and services, creating conditions and infrastructure for digital services and networks to grow, and the overall growth of the European digital economy.
A unified European digital market would represent an amazing opportunity for digital merchant services in Ireland. With a rapidly growing Western European online economy, Ireland is poised to take advantage of a massive consumer base hungry for digital deals—The EU has a population of 460 million while the UK has a population of only 60 million.
According to Wolfgang Digital, “the success of the DSM will allow Irish retail trade with nations like Germany, Ireland’s second-biggest consumer of online exports after the UK, to prosper.”
In other words, Brexit could be a blessing in disguise. While Ireland may lose business from the UK due to increased taxes and customs, it will gain back even more business from a unified European Digital Single Market hungry of eCommerce services from Ireland.
Online shopping has become more secure than in the past. With more intuitive security and ordering features, customers worldwide can feel confident when they finalize purchases. Websites are getting better at providing security features with more safeguards in place to keep private, sensitive customer information secure.
Advances in merchant services in Ireland like mobile wallets allow consumers to finalize purchases without entering credit card information directly onto the merchant website. When customers feel safe entering payment information they are more likely to buy.
Better eCommerce security features are a leading cause of rapid growth in the Irish online economy. But it’s not just better security that’s leading to such swift expansion of the digital Irish marketplace, it’s also better technology.
The Irish digital economy has experienced astronomical growth over the past two years, and it doesn’t look to be slowing down anytime soon. Poised to take advantage of a unified European digital market, Ireland’s online economy looks to stay green for years to come.