New research shows a swing in online retail sales away from international retailers, which have traditionally dominated Ireland's €16 billion annual e-commerce spend, to Irish SMEs. 

The research, published by IE Domain Registry in partnership with Digital Business Ireland, looked at consumer and SME responses to the Covid-19 crisis.

It shows that since the coronavirus crisis, Irish consumers estimate that they have done most of their online shopping with Irish SMEs (53%) versus international retailers (47%).

These figures were the opposite before the coronavirus crisis (52% international compared to 48% Irish).

Among consumers who have done most of their online shopping with Irish SMEs since the Covid-19 crisis, 67% say they have done so out of a sense of solidarity and a need to support Irish businesses. 

48% said Irish SMEs are more reliable than international retailers while 41% said they are more trustworthy.

But among those who shopped online with international retailers during the Covid-19 crisis, cheaper products (71%) and a better range of products (69%) have been major factors influencing their decision.

Over a third said international retailers have better online services and storefronts than their Irish counterparts.

IE Domain Registry said that once Covid-19 is controlled and the economy returns to normal, consumers may no longer feel it is necessary to support businesses at home when a better online experience is available elsewhere.

It also noted that 79% of small businesses said that they had not invested any money whatsoever in their online services since the Covid-19 crisis with only 25% of all SMEs sell online in any capacity.

Today's report shows that SMEs which do invest in online services reap rewards. 46% of those that have invested since the Covid-19 crisis say they are busier than or as busy as before it. 

Among those SMEs with an online store, 88% said they had noticed a change in their volume of sales since the Covid-19 crisis with 77% saying this has been a positive change.

The report also reveals that 74% of respondents said that Covid-19 restrictions in physical stores, such as social distancing, queues, and capacity limits, have negatively impacted their decision to shop in them.

David Curtin, chief executive of IE Domain Registry, said that sustained online spending has been one of the few good news stories for Ireland's Covid-19 economy. 

"Our research shows a swing in online retail sales away from international retailers, which have traditionally dominated Ireland's €16 billion annual e-commerce spend, to Irish SMEs. This is an important milestone," he stated. 

He said that despite the Covid-19 crisis, consumers have continued to spend online. 

"They are now looking closer to home for retailers that they trust and know are reliable. Most significantly, they simply want to support Irish businesses through an immensely challenging period," he said. 

But he cautioned that this swing is not necessarily a permanent one, adding that this an important point for business groups and the Government to consider as the country begins its economic recovery.

He said that once an effective treatment or vaccine is found and Covid-19 is no longer a contributing factor to consumer purchasing decisions, Irish SMEs may gradually lose out on the goodwill that they are currently benefiting from. 

"From a digital perspective, Irish SMEs are still far behind their international peers; as many as 80% have not invested anything at all in their online services since the Covid-19 crisis began, despite lockdown and the closure of physical stores," he added.

Lorraine Higgins, chief executive of Digital Business Ireland, said that never before has the need for a digital business model been more acute. 

"As Covid-19 engulfs our world, it has brought to the fore the pressing need for an omni-channel, bricks-and-clicks approach to business, a fact that is corroborated by stratospheric online retail sales figures over the past number of months," Ms Higgins said.

"While an integrated, omni-channel business model must become an elevated priority in order to offset the threat of a return to a leak in spend to international businesses, further efforts will have to be made to bridge the digital divide," she said. 

"Personalisation, artificial intelligence, flexible payment options, faster delivery times, and seamless customer journeys will be a key focus for discerning e-tailers, who must seek out opportunities to differentiate themselves in a busy online marketplace," she added.