Mintel’s latest Online and Mobile retailing report examines the online and mobile retailing sector in Ireland through exploring the issues that are fuelling and affecting its growth. The research reveals that the increased usage of mobile devices, uptake of mobile payment platforms and consumers switching to purchasing digital versions of physical goods, such as music and movie streaming services, will contribute significantly to growth over the next few years as consumers look to access content from anywhere and at any time.
Below, James Wilson, Research Analyst at Mintel, answers some of the key questions addressed in the report.
How is the online and mobile retailing market performing in Ireland?
The value of online and mobile retail sales is estimated to grow by 18% on an all-Ireland basis between 2016 and 2017 to reach €10.4 billion in 2017. This equates to an average online spend of €1,577 per capita for each of the island of Ireland’s 6.58 million population. Looking at the regions, online and mobile retail sales in RoI will grow at twice the rate of NI between 2016 and 2017. Thus, in 2017, RoI will account for 82% of total online sales on the island of Ireland, some €8.4 billion, and NI for the remaining 18%, €1.8 billion.
What factors are driving growth in the market?
The increase in average spend per person and high device ownership are helping to drive value growth in online retail sales on the island of Ireland. Furthermore, the improvements to broadband provision and mobile internet infrastructure, and uptake of online payment platforms are increasing the ease with which consumers can buy goods online. The strong growth in online shopping indicates that Irish consumers continue to take advantage of convenient purchasing channels that better fit into their busy lifestyles. As this will continue over the coming years, retailers will need to ensure they have the appropriate infrastructure in place to cater for growing demand. This will help to not only maintain but grow consumers’ confidence in buying goods online, potentially resulting in more of them doing so and thus growing the overall value of the market.
How do you predict the market will fare in the future?
Growth in the value of online and mobile retail sales will remain strong over the next five years, rising by 54% on an all-Ireland basis between 2018 and 2022. This will take the value of the market to approximately €18.5 billion in 2022.
Where are consumers choosing to shop online and which devices are they using?
Irish consumers show a strong preference for shopping online at home. Laptop and desktop computers are the devices that Irish consumers are most likely to use to buy goods when shopping online at home. Within the regions, women in NI are more likely to use smartphones to purchase goods online, while RoI women show a preference for tablets, making these the second most popular devices for shopping online at home behind desktop and laptop computers. Adopting a regional approach for each device can help brands to more effectively reach Irish women and help to drive sales occurring via mobile devices.
What are the opportunities for brands to appeal further to these consumers?
With Irish consumers primarily making purchases via mobile devices at home, it is likely that they are doing so while engaging in other activities, such as second screening when watching TV for example. This indicates that there may be external stimuli (eg TV ads, other person) within the home that are prompting consumers to make a purchase. Brands could look to better understand what activities and programmes consumers are engaging in when or just before they make a purchase online via mobile devices. Indeed, this will help brands to better tailor the promotion of their products and services and thus help to boost impulse sales occurring online.
What are consumers buying online?
Clothing, footwear and accessories are the most popular items that Irish consumers buy online. Despite the strong growth of online streaming services, Irish consumers are still more likely to buy physical copies of books, CDs, DVDs and video games compared to digital versions. Groceries are still much more likely to be bought online by consumers in NI than by those in RoI. Indeed, Mintel’s Grocery Retailing: Brand vs Own-label Ireland 2016 Report shows that consumers in RoI are more likely than their NI counterparts to do their main grocery shopping in-store. This reflects that online shopping remains underdeveloped in RoI compared to NI due to the low level of retailers offering this service outside of the main urban areas in the region (eg Dublin and Cork).
What would shoppers pay more for?
Around eight in 10 Irish consumers would be willing to wait for deliveries if it means cheaper or free postage. This indicates that despite retailers investing in quicker delivery methods, price of delivery is more important to Irish online shoppers. However, one in five want faster delivery and would be interested in paying an annual or monthly postage fee to ensure the goods they order online are delivered the next day. Over a quarter (27%) of NI and 28% of RoI consumers are also interested in having packages delivered by drone, indicating that there is demand for more innovative and flexible delivery methods that will enable consumers to receive their goods at a time and location that suits them.
ABOUT THE AUTHOR
As a research analyst with Mintel, James researches and writes in the retail, technology and leisure sectors for Mintel’s Irish series of reports. His specialist areas include all things digital with a focus on social media and consumer shopping habits. He has featured in radio interviews and national publications such as The Times.
Mintel’s Online and Mobile Retail, Ireland, 2017 report is available to purchase, for more information on this report and how Mintel can help your business, contact Ciara Rafferty, Director Mintel Ireland on +44 (0)28 9024 1849 or firstname.lastname@example.org.