As retail shops get ready for the holiday rush, online retailers are also gearing up for a shopping bonanza, in the US. In Ireland, online shopping is still in its infancy with few websites targeting Irish consumers, no recognisable brand names and limited products for sale.
But consumer-oriented e-commerce is gradually taking hold. Last Christmas, about all an Irish shopper could buy locally online were chocolates and flowers. This year, online consumers can purchase books from Fred Hanna and Easons in Dublin, videos from Black Star in Belfast, and toys from The Magic Lamp in Kilkenny, as well as wine, music, jewellery, gift certificates, computers, mobile phones and various Irish crafts.
"Irish companies are making a concerted effort to get online. But while the mindset has developed this year, it will be next year before we see that attracting a significant share of Irish users' online wallets," said Mr Mark Henry, senior research consultant at Amrach Consulting.
At present, Irish online shoppers, like their counterparts elsewhere, are more likely to make a purchase from an Internet mega-brand such as Amazon, CDNow or E-Toys than they are from a locally-based operation.
Books, music and travel services, in that order, remain the top products bought on the Net regardless of whether the buyers are Irish, American, Canadian or British, according to Mr Henry. Few Irish companies, however, are meeting those consumer demands.
"Most Irish online companies are not offering those services or, if they are, their names don't come easily to mind, so they are not marketing their services. They need to be top of mind and that needs to happen by this time next year if Irish retailers are to make significant inroads into e-commerce," he said.
US retailers spend millions advertising and promoting their sites, with the result that brands such as Amazon.com are now household names.
"In the US, when you turn on the TV, every ad is about websites. In Ireland, we won't see that happening for a while. We're three years behind the US but if you go to the States, you'll come back an Internet evangelist," according to Mr Eric Mosley, operations director of GloboGift Ltd, an Irish-based Internet start-up.
Globogift, which began operating in September, is carving out a niche in the sale of international gift certificates for leading department stores worldwide and is already building brand recognition and sales, said Mr Mosley.
"You see, the Internet is a different model to traditional retailing. Traditionally, a department store would advertise, but it could take years for the message to seep into a customer's consciousness and lead to sales. On the Internet, it's totally different. A customer has a need, they go to a search engine, get the information, and business follows."
The Magic Lamp is another Irish company with big plans for Internet sales. Established 18 months ago as a mail-order children's toy catalogue, the company has just launched a website featuring 500 educational toys and plans to offer 5,000 online products within a year.
"People want convenience," said Ms Eugenie Houston, founder and chief executive. "Whether the Internet turns out to be the predominant sales channel for us remains to be seen but we're getting very different people on the website. Two-thirds of our online orders are from men."
Over its first weekend alone, the website received requests from 200 customers, all anxious to fill Christmas stockings, and the company predicts sales of 3 million within a year.
To date, however, the Irish shopping sites that have been successful have been those aimed at the Irish diaspora, particularly the Irish-American market. About 95 per cent of shoppers at House of Ireland's site are Americans and, since the start of the holiday shopping season, demand from them for Irish gifts has been so great that the company says it will be unable to fill any more orders before Christmas.
"You wouldn't believe the amount of orders we've had since Thanksgiving. It was three or four times the usual. If we hadn't stopped taking orders, we wouldn't have been able to cope," said Mr Roger Galligan, chief executive.
Forecasters are predicting a bumper holiday shopping season in the States. Forrester Research estimates that 8.6 million households will spend $4 billion on the Internet between Thanksgiving and New Year's Day, buying everything from books and CDs to big-ticket items like computers and furniture. Some will even buy their holiday meals through the Net, according to Forrester. However, Irish consumers are unlikely to be buying their turkey and Christmas pudding over the Internet in the near future. Only 17 per cent of Irish adults have access to the Internet and of these, only 13 per cent, 58,000, have made an online purchase, said Amrach's Mr Henry.
Much more needs to happen on the consumer, business and banking fronts before online shopping takes off. Increased PC penetration, lower phone charges, wider availability of credit cards, a greater willingness by banks to accept online card payments and a much larger range of goods for sale at competitive prices are all needed before a critical mass of consumers will venture into cyberspace.
Consumer concerns about privacy and security will also need to be addressed. In addition, retailers must invest in building brand recognition and putting fulfilment, delivery and database management systems in place.
However, some of the Irish portals are beginning to gear up for Christmas. Local Ireland has developed a Santa site with games and competitions, although it only has one item in the Local Ireland Almanac for sale. Indigo offers links to some of the main Christmas shopping sites around the world on its home page. And IOL has launched a new site with links to 16 retailers, most of them based in Ireland.
"There's no doubt that, in the future, Irish people will be buying gifts over the Internet and there will be a market," said Mr Galligan.
Selected Irish retailers/ portals:
www.magiclamp.ie
www.globogift.com
www.wineonline.ie
www.santa.local.ie
www.blackstar.co.uk
www.hannas.ie
