Ireland is an exciting market for local companies expanding into ecommerce and international brands looking for new revenue opportunities.
Our research finds that 74% of consumers in Ireland believe that the future of retail is online. This has seen ecommerce growth skyrocket by more than 150% in the past year. Online sales are expected to exceed €4.5 billion by 2025.
With our full-stack online payment system and local payments expertise, we support businesses to unlock their payments potential and expand their online retail market presence in Ireland and beyond.
Jordan McCarthy, who leads our new Irish office, spoke with me about the evolving ecommerce landscape and the avenues for growth.
Jordan, could you give us an overview of the shifts in the digital economy in Ireland over the last few years and the drivers of growth?
The shift from cash to digital payment, even in stores, has been noticeable and relatively recent. There's been a significant movement towards cards in the past five years, especially for in-person, lower-value payments. This shift is mainly due to the simplicity and speed provided by contactless cards and smartphones at the checkout.
Ecommerce flows have naturally followed, although perhaps not as quickly as they did in other European countries. There are a few reasons for this. Notably, Ireland is a fairly rural country and there hasn't typically been a robust logistics network to support ecommerce outside of the major cities. Given that speed of delivery is one of the key factors consumers value when shopping online, this limited the growth of ecommerce — especially for goods needed quickly, like groceries. This is despite the population being tech-savvy and keen to shop online.
Ireland is catching up with its European peers when it comes to digital commerce. The impacts of the pandemic have been one reason for this. But there's also been a significant investment in the logistic networks, led by Amazon, forcing other logistics players to raise their game.
The Irish government is also playing a leading role in driving the digital agenda, creating tech hubs and offering attractive tax breaks. The message they're sending is clear: Ireland is open to digital business. This has brought many of the world's most innovative companies to Ireland and all development that follows that investment.
There's also the Brexit factor. Although this remains a complex topic, we're beginning to see many UK businesses setting up shop in Ireland to have a physical presence in the EU. I expect this trend to continue as we head into 2022.
How would you characterize the typical Irish shopper?
The Irish are well-traveled and worldly. As a result, they're more willing to purchase from overseas websites. Over 80% of Irish online consumers shop cross-border, which is appreciably higher than in other European markets. That said, consumers are also keen to spend with domestic brands where possible and we're seeing a number of them start to have real success.
Irish consumers are also keen to experiment at a higher rate compared to their counterparts in the UK. For instance, 13% of Irish consumers say they tried a new payment method for the first time during the lockdown, compared with 7% in the UK. At the same time, more than half have used digital wallets in the 12 months, compared to 44% in the UK, our research shows.
We're also seeing Irish consumers be open to the brands they spend with, providing them with different experiences. For instance, 67% say they have an appetite for more personalized ecommerce experiences. Just under half want to use more rental subscriptions. While 56% are keen to adopt social commerce.
What this means is the Irish consumer is far from typical compared to their UK and European counterparts. This environment creates a fantastic opportunity for brands to win market share by piloting innovative offerings with the Irish consumer base. Pilots that, if successful, can be adapted and rolled out elsewhere.
But it's easier said than done. Businesses need to commit to deeply understanding the changing trends in consumer behavior to succeed in the Irish ecommerce market. They must also ensure they have the flexible technology required to stay nimble and capture opportunities as they arise.
How can businesses capitalize on this demand from Irish consumers and use payment platforms to craft and deliver experiences that secure sales at the checkout?
Payments hasn't quite seen the same innovation that's occurred throughout the rest of the digital economy in Ireland. That means many businesses use payments solutions that might not be best suited for their current needs, let alone their future ambitions.
There's also a degree of inertia amongst businesses in Ireland. I understand why: accepting payments is the lifeblood of the business. If it's not broken or there are no compelling alternative offerings, then why make a change? But the reality is there's so much room for improvement.
We're already working with many businesses, supporting them to uncover areas of optimization and how they can increase acceptance and reduce fraud. They're often surprised by the difference this can make to their bottom line. The ease of implementing these changes when working with a modern payments processing platform built for the internet is also similarly surprising.
What's more, we're finding all of these businesses are incredibly appreciative of the insights and hands-on support we're providing. It's not something they've typically had. And that's ultimately why we've made this investment in Ireland. We recognize the potential of Irish businesses. And we're committed to providing them with the payments technology and expertise that helps unlock their potential domestically and as they expand worldwide.