Almost a quarter (22 percent) of Irish SMEs are completely offline, despite half acknowledging that an online presence is important for generating business awareness. This is according to a new research report published today by the IE Domain Registry (IEDR), the company responsible for managing and maintaining Ireland’s official domain name, .ie.
The majority of offline SMEs (68 percent) believe there is simply ‘no need’ to have a website. When probed further, respondents said that this is because most of their business is word-of-mouth (78 percent); others said that they already have lots of business (23 percent) or are happy with the scale of their business (17 percent). Reassuringly, only 17 percent said they see no value in having a website.
However, this justification is not enough for Irish consumers. IEDR research shows that 83 percent of consumers think SMEs should have at least a basic website that lists contact details, while 68 percent believe a business is ‘outdated’ if it doesn’t have an online presence. 71 percent are more likely to buy from a business that has a website.
Among the SMEs that are online, few can engage in e-commerce (selling online): 30 percent can take sales orders or process payments, while just 29 percent can accept bookings or reservations online. Only 37 percent of SMEs promote their businesses online, spending an average of €161 per year on search engine and social media marketing.
Clearly, SMEs are missing out. Ireland’s share of the European e-commerce market is valued at €9 billion and is set to grow to €14 billion by 2021. However, most of this spend is going abroad to foreign retailers who provide comprehensive e-commerce shopping experiences, including direct-to-door delivery. Despite this, the odds are stacked in Irish businesses’ favour: 77 percent of consumers say that buying Irish is important to them.
While these numbers are disappointing, there is reason to be optimistic. The latest edition of the IEDR dot ie Digital Health Index shows an overall improvement in Ireland’s digital health, with the Index score rising to 45.4, the second-highest since research began in 2014. The biannual research report assesses the number and quality of digital assets owned by 500 Irish SMEs, like websites, social media pages and e-commerce tools.
The increase in the Index score has been driven primarily by an improvement in SMEs’ perception of the quality and performance of their own digital assets; and by an increase in the number of SMEs with websites (67 percent compared to 62 percent in October 2016, the last wave of research).
The ‘offliner conundrum’
While many SMEs believe there is no need to have an online presence, others simply struggle to get online. A third say a lack of time is keeping them offline, while 29 percent say a lack of expertise and 26 percent, cost.
Interestingly, more say concern over cybersecurity (17 percent) is a barrier to going online than a lack of reliable internet connection (13 percent). In the last wave of research, a poor internet connection was responsible for keeping 17 percent of businesses offline.
Encouragingly, 20 percent of SMEs say they are currently in the process of building a website, up sharply on the 8 percent recorded in the last wave of research. The number saying they have no plans to build one in the near future has dropped from 66 percent to 57 percent.
The looming spectre of Brexit appears to have done little to spur offline SMEs online, however. 85 percent said that the UK’s vote to leave the EU had not increased their likelihood of building an e-commerce-enabled website, compared to 6 percent that said it had.