Irish e-commerce grew by 19% year-on-year in 2025, significantly outperforming the 1.5% growth the CSO recorded across overall retail, according to Wolfgang Digital’s latest Online Retail Report.
Based on an analysis of €520m in e-commerce revenue, the report highlights a widening gap between traditional retail and online sales, positioning digital as the primary growth engine for retail in Ireland.
Multichannel retailers have emerged as the clear winners. Businesses operating both online and offline recorded average growth of 24%, compared with 5% for online-only operators. “The debate between pure-play e-commerce and brick-and-mortar is effectively over,” said Brendan Almack, managing director at Wolfgang Digital. “An integrated approach doesn’t just drive revenue, it drives efficiency. If your digital and physical teams are still siloed, you are capping your growth.”
The report notes that a physical presence has become an important competitive advantage, particularly as global players such as Amazon, Temu, and Shein intensify competition in the Irish market.
The research also identifies a structural shift in online discovery. Paid search now contributes 36% of e-commerce revenue, compared with 23% from organic channels – a complete reversal from four years ago.
The research findings also noted that retailers growing faster than the market average increased media investment by 46%. Irish e-commerce businesses now invest an average of 10% of online revenue into paid advertising.
“Paid search is now the single biggest contributor to e-commerce revenue, and budgets must be defended and scaled,” Almack said. However, he went on to caution that “the best strategies have a blended approach to paid media and organic search (i.e., SEO)”, noting that retailers needed to work harder than ever to “grow their organic search visibility and de-risk themselves from an over-reliance on paid channels.”
Email marketing had a record-breaking year and now generates 6.4% of e-commerce revenue on average, according to the research. This is the first time it has surpassed 5% in a decade of reporting. Retailers outperforming the market-average derive as much as 8% of total revenue from email campaigns, underlining the continued value of first-party data.
Artificial intelligence is another theme of the report – while current traffic levels remain low, user behaviour is beginning to change. AI-driven traffic grew 81-fold year-on-year but still accounts for less than 1% of total website traffic. “Although the proportion of website traffic might seem low,” Almack said, “our recent research with Amárach into how shoppers are using AI showed us that 30% of the Irish population are using Chat GPT to carry out research before making a purchase decision.”
According to the report, the best step that retailers can take now is start tracking their visibility across AI search.
Wolfgang Digital CEO Alan Coleman draws parallels between the current AI shift and the early days of search marketing: “In the 2000s, consumer behaviour changed as people stopped using the Golden Pages and started Googling. The retailers that invested early in search advertising gobbled up market share for many years.” Coleman sees a similar shift happening now and states, “30% of Irish people are now researching purchases on Chat GPT, but I guarantee you that 30% of Irish retailers are not yet investing in AI visibility. For those who do, there is an opportunity to connect with customers in a non-competitive space.”
Key Findings: Wolfgang Digital Online Retail Report 2026
19% Year-on-Year Growth for Online Retailers in 2025
- Irish e-commerce continues to outpace overall retail growth, which recorded just 1.5% according to the CSO.
Multichannel Retailers Lead the Way
- Average growth: 24% vs 5% for online-only businesses
- Marketing efficiency (ROAS): 21:1 vs 16:1 average
Paid Media Dominates Online Revenue
- Paid search now drives 36% of revenue, overtaking organic search at 23% (a reversal from 2019)
- Faster-growing retailers increased media investment by an average of 46%
- Average media spend: 10% of total online revenue
- Positive correlation between media spend and growth: 0.59
Artificial Intelligence: Explosive Growth, Small Base
- AI-driven traffic grew 81x YoY but represents only 0.23% of total website traffic
- 30% of Irish consumers use ChatGPT for pre-purchase research
Email Marketing Sees a Record Year
- Average contribution to e-commerce revenue: 6.4% (first time above 5% in a decade)
- Top-performing retailers generate up to 8% of revenue via email marketing
Social Media Remains Undervalued
- Last-click attribution shows 4% of revenue comes from social channels
- Social cost-per-click is between 28% and 48% cheaper than Google paid search
- Social activity has a broader influence on brand awareness, organic search, and paid channels
