With the imminent arrival of Google Shopping to the Irish market, securing a return on investment for Irish firms could be a big challenge, writes John Ring.
Our three-year old is still a bit small for sitting at the kitchen table so when my better half instructed me recently to “sort it out”, I let my fingers do the walking to the green bin outside to retrieve the Golden Pages for 2016/2017.
What a thin directory! Remember how thick it used to be? Not anymore. Having quickly verified its usefulness as a child booster seat, I did what every normal IMJ reader would do and started browsing the ads. Personal injury solicitors – about ten big ads, locksmiths – five big ads, upholsterers – four big ads. Why those three sectors in particular? There’s a lot of online demand for these unglamorous services. (If you lose / break your keys and you’re standing outside your home, most people either call someone with a spare key or Google “emergency locksmith” on their phone – a very expensive keyword by the way!)
I found the upholstery ads genuinely very interesting and highly representative of a problem that Government and the EU seem to be pushing hard to fix: ie – get more SMEs trading online. I didn’t see one URL on the ads. If we consider an expert upholsterer in his late 40s or 50s, I’m guessing that his view is to keep advertising where he always has – in the Golden Pages. Could he really be bothered with the whole internet thing that his kids use non-stop? Where does he even start?
As you’re in marketing you’ve probably noticed the recent publicity and efforts to encourage SMEs to get online. 88% of consumers here research online compared to 77% EU-wide according to recent Indecon research for the Government.
The EU’s recent European Digital Progress Report states that Ireland is top in Europe with 32% of SMEs selling online – double the EU average of 16%. Doesn’t “double the EU average” seem to suggest that Irish SMEs are doing pretty well by comparison with our European neighbours?
When I hear an Irish minister saying how bad it is that 25% of SMEs have no website (IEDR) and so much of the €850K we spent online per hour is being lost to foreign companies like Amazon and ASOS, I immediately start thinking of the Golden Pages ads of personal injury firms (local legal service), upholstery (local business service) and locksmiths (local business service). Our focus needs to be on getting every business online – not necessarily trading online because that’s not always appropriate.
While Google and Facebook are the two behemoths of the Irish digital marketing space, the critical problem for SMEs is not getting online, it’s succeeding cost-effectively online and that’s the expensive and hard bit for many SMEs to get their head around. After looking at what’s involved in the whole “succeeding with digital” issue, I imagine many smart local SMEs just choose not to do it due to the unknown risks involved and the realisation that once they start, they’ll probably feel compelled to keep doing it.
I recently passed The Website Shop at Harold’s Cross bridge which is advertising in its window a small simple site for €700. I don’t know anything about them but the concept caught my eye. Our upholsterer friend should be asking his Local Enterprise Office for his – up to – €2,500 Trading Online Voucher and get a €700 website done but it’s the digital marketing work that’s needed afterwards that’s usually more difficult for an SME to manage due to their typical lack of knowledge. For larger SMEs, Enterprise Ireland has the right general idea of “knowledge transfer” with their ebusiness grants but the bureaucracy and restrictions involved in getting those is often highly cumbersome for companies in my experience.
So in light of the risks to SMEs of succeeding versus just getting online, I’m looking forward to watching the take-up of Google Shopping in Ireland over the next year. In case you missed it, Google Shopping has just launched here in beta mode with a full roll-out expected in Q1 2017. As a simple example, if I search now for “red dress” on Google.ie, I currently see eight pictures of a red dress from several different etailers on Google Adwords as has been the situation in the UK for much of the last decade. The visual element and ability to price-compare is the real value of Google Shopping.
Will every Irish SME who sells products try to sell their wares via this new highly visual channel? I doubt it due to our low population count. We’ve economy of scale issues here when it comes to digital success that an SME in Liverpool just doesn’t have. Of course if the product / service is unique, then the online world is your oyster. Most SMEs don’t sell unique products though. My guess is that if every Irish retailer selling products were to invest in trading online, a substantial amount of money would be squandered due to there simply being no Return on Investment.
When I see Amarach’s latest research saying that only 41% of Irish online purchases are done on Irish sites with the rest being spent abroad, the little guy with the Irish jersey in my head is shouting “C’mon Irish SMEs – sell more products and services online”. But the other little guy beside him with the calculator is asking “How can a small Irish SME wanting to sell products online successfully compete with 1-Click Amazon’s simplicity and familiarity to an Irish customer”?
I believe that Irish SMEs are highly innovative and at least as good as any others at competing online. The only challenge is ensuring there’s a great Return on Investment.
John Ring is managing director of Tinderpoint.
First published in Irish Marketing Journal (IMJ October Issue 2016)© to order back issues please call 016611660