e=com² : Retail strategy or Einstein theory
Joan Mulvihill’s response to Irish Independent article “Irish consumers to spend €20bn online by 2020 but strategy needed” please click here to read.
This is an interesting article. The stats are ones that have been touted for quite some time so there is nothing new there. What is interesting about this article is not what it says but rather what it does not say. There has been talk for ages now of a National Digital Strategy, which according to this article is “underway” and will be implemented in the “coming years”. And yet, it is not even this rather slow pace that is of interest to me. What interests me is the dearth of even headline ideas/concepts or indeed the nature of the ‘brave decisions’ that need to be made. My sense is that some of the strategy makers believe that supporting Irish retailers to have ecommerce websites is the answer to the problem. If only more Irish retailers would sell their products online then people wouldn’t shop from overseas anymore. I’m unconvinced.
The IIA has long supported Irish businesses developing their online sales proposition to enhance their relationship with their customers; through the provision of better value, better range and more choice. But that is not to say that every retailer should have their own site. Some need to take a more creative approach to channel management.
An understanding of consumer behaviour is required. Shoppers are not buying from Amazon or Net-A-Porter or ASOS because of the dearth of books, toys or clothes to buy from Irish retailers online. They are buying from Amazon, Net-a-Porter and ASOS because of their breadth of range, their pricing and ultimately free or comparatively low cost to ship. It costs less to have something delivered from Amazon than it does to park in town when I’m shopping. It definitely costs less to have something delivered from Amazon than it does to park in town, buy something and post it to New York to my godchild for her birthday. And so if I look online to Irish independent retailers, it is clear that they are hampered and disadvantaged by expensive shipping costs relative to the price of the item and short delivery times are a serious premium.
It is incredibly difficult for Irish retailers to compete. The National Digital Strategy element that deals with ecommerce has to encapsulate the infrastructure that supports ecommerce. And that infrastructure includes a lot more than quality broadband.
The size of the Irish market is small. Irish retailers’ capacity to reach scale and enjoy any economies of that scale requires vision for developing an international presence. We solicit the best tech companies in the world to set up in Ireland, many of whom provide online sales services. Is that the kernel of a solution? I want to support Irish independent retailers by ensuring they have the tools that they need to market their products/services but unless we sort out the infrastructure and the ambition for international retail then only a small number can achieve the scale needed to succeed. Perhaps our best bet for getting the Irish consumer to buy online from businesses in Ireland is to attract the ecommerce giants to HQ in Ireland. We’ve secured the tech companies that support them so why not secure them directly.
The strategy for achieving this would be predicated on having the best online sales specialists, fulfillment/operations planners, designers, digital advertisers and customer service operators based in Ireland with localised fulfillment centres overseas. We could incentive these businesses to operate through Ireland with a special online sales tax incentive and develop Ireland as an ecommerce hub for the sale of goods AND services online. Combined with the digital content strategy of the IDSC, ecommerce for digital content (books, music, film) in addition to the sale of physical goods might all be funnelled through Ireland as the uniquely placed global ecommerce hub.
This is what interests me. This article might not be revealing anything new or insightful but it stimulates thought. Creativity exists within the cracks.