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A report researched & compiled by eCommerce WorldwideSponsored by

Cross-Border Trading ReportYour guide to international e-trading

Ireland Passport 2016

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The Ireland Cross-Border Trading Passport 2016 is the latest publication in a series of international trading guides produced and maintained by eCommerce Worldwide, our sister associations and supporters for a variety of key territories around the globe. The UK passport is compiled in partnership with IMRG, the UK e-retail association.

These Passports are designed to operate as comprehensive guides for cross-border e-Trading, exclusively focusing on the B2C markets in their subject territories.

The complete set of published Passports are available for download on the eCommerce Worldwide website at ecommerceworldwide.com/countries and on the websites of our approved publisher network.

For more information please visit

www.ecommerceworldwide.com or you can email

info@ecommerceworldwide.com

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CONTENTS

Foreword 6

Executive summary 8

Territory overview 11

Political & socio-economic environment 15

Online & mobile statistics overview 16

Marketing & branding 25

Optimising customer experience 33

Legal framework & regulation 38

Finance & payments 50

Logistics & delivery 52

References 61

About Nightline 62

About eCommerce Worldwide 63

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FOREWORD By Nightline

Green light for growth: Ireland key for UK online opportunities

You can find more information about Nightline Delivery at www.nightline-delivers.co.uk

For a country with roughly half the population of London, it’s fair to say that the Republic of Ireland punches well above its weight as a trading partner especially for the UK’s business community. It’s a relationship which is based on more than mere proximity – a point made especially clear to anyone even vaguely familiar with the continuing commercial importance of online shopping.

The sale of goods and services between the UK and Ireland is now worth approximately €1bn per week and justifies our being ranked as one of the UK’s main export markets, only a fraction behind the likes of France and China. This demonstrates that Ireland is a viable market for retailers in other territories too.

Anyone who has taken the trouble to download this cross-border passport will doubtless already be considering whether to expand their operations into Ireland. They will find it contains a wealth of valuable background information about our folk, finances, laws and logistical infrastructure.

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If you need any more convincing, allow me to share some of the insight amassed by the Nightline Group over more than two decades.

As Ireland’s premier delivery firm, operating on a daily basis across all of the island’s 32 counties, we have developed an acute understanding of the preferences of the very consumers fuelling our ecommerce boom.

Irish e-shoppers are confirmed and sophisticated fans of cross-border shopping. A recent Nightline survey of several thousand people concluded that 86% buy – and want to buy more – from retailers based overseas, predominantly in the UK and US.

Direct delivery tariffs might class shipments bound for the Emerald Isle as ‘International’ but Nightline strive to deliver at UK domestic rates and consumers demand the same level of service offered to their UK counterparts. They want the same breadth of produce, the same convenience, cost and speed of delivery and the same ease in returning unwanted purchases.

Our UK retail partners, including the majority of the UK’s top 20 brands, have realised that not being able to offer comparable standards at the checkout increases the prospect of cart abandonment.

They have tapped into the appeal of Parcel Motel, our nationwide parcel locker system. A unique proposition in Ireland, it has almost 250,000 regular users – the top 10% of Irish consumers – and is capable of handling low-cost deliveries and returns.

Using a ‘Virtual Address’, which is driving rapidly-rising volumes of ecommerce purchases to customers in the Republic through our Belfast depot, retailers have already seen the clear benefits of catering to a consumer audience whose vast appetite is growing at a rate even faster than the UK.

Next day delivery throughout Ireland is now a reality for retailers with fulfilment operations in the UK and the overheads for penetrating the Irish market can be further reduced by a direct collection and injection into the Nightline network. The barriers to entering Ireland are coming down.

Others have realised that there are significant rewards to be had on an ‘Emerald Isle’ which is well and truly open for business. What are you waiting for?

John TuohyCEO – Nightline

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EXECUTIVE SUMMARY

Ireland, as an island, consists of two separate but conjoined market opportunities and countries – the Republic of Ireland (‘the Republic’) and Northern Ireland.

The Republic has a population of over 4.6 million and a GDP per capita of nearly $49,000 in 2014; the fourth-highest of any member state of the European Union (EU). Most of the population speak English and 30% speak Irish Gaelic. Tourism is a key part of the economy with over 8 million tourists visiting every year; more than double the population of the country.

Three international airports and membership of the EU have established the Republic as an active participant in cross-border trade across the EU, Northern Ireland and further afield. The main import markets are the United Kingdom (UK – 39%), United States of America (US – 10%), Germany (8.5%) and Netherlands (6%).

Northern Ireland, while being politically and economically part of the UK, is geographically closer to the Republic, sharing a common border and heritage. While this report focuses on the Republic, cross-border trade is an important way of life for the communities both sides of the border.

As such, it is important for any merchant looking to trade into the Republic to understand the differences as well as the opportunities. Where appropriate, specific insight in to the Northern Ireland market will be highlighted, while more in-depth information is available from the UK passport which can be found at ecommerceworldwide.com. For example, Northern Ireland is the only part of the UK to share a physical land border with the EU. Northern Ireland has a population of over 1.8 million while the provincial capital, Belfast, contains over 330,000 inhabitants.

In the Republic, Dublin represents the single largest conurbation and concentration of people in the country. With over 1 million citizens residing in the capital’s region, it offers merchants the biggest market while the second largest area (Cork) is notably smaller at around 190,000 inhabitants. With a considerable proportion of the population in rural areas, good road links are important and the country is well provided for in this area.

Key areas covered in more detailed sections of the report include:

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POLITICAL & SOCIO-ECONOMICWhile Northern Ireland is part of the UK, it is governed locally by a devolved parliament which sits in Stourmount. The Republic is an independent country with an elected parliament and president. During the late 90s and early 2000s, the Republic was known as the Celtic Tiger due to the growth of its economy but the financial crisis around 2008 hit the country hard. It is still recovering from that period but has been making great efforts to pay down its International Monetary Fund (IMF) loans. The economy is now growing at circa 7% and the country is home to a number of global tech businesses trading into Europe.

ONLINE AND MOBILE STATISTICSOverviewAccording to the European Commission’s (EC) regular measurement of progress towards the EU’s digital single market, the Republic has an above average adoption of digital technologies and, in some fields, leads the EU. Internet penetration is good across all areas of the Republic although the southern and eastern counties have a higher level than the rest at 84% vs 77%. Northern Ireland also boasts high levels of super fast broadband internet access at 77% penetration.

Adoption levels are highest amongst family groups of two adults with two dependent children, suggesting not only a willingness to invest in access but also engagement. 64% of adults with internet access used internet banking and 63% undertook online shopping. It is expected that e-retail in the Republic will be worth €5bn in 2016 while m-commerce was worth €1.4bn in 2015, according to PayPal. The same source also expects m-commerce to more than double by 2017; highlighting the importance of mobile devices in the country.

Mobile devices now account for 56% of traffic to websites but desktop is still a key element of the customer experience and journey. There are also indications that smartphones are becoming increasingly important for the consumer, with traffic from these devices up by 10% in 2015. 39% of Irish online consumers are now using smartphones to inform their purchase decisions. The majority of Irish retail websites are mobile-optimised while less than half are mobile responsive.

All ages of online users are actively engaging with brands but Dubliners are more likely to transact in the channel. Fashion and travel are key sectors and there is a strong desire to shop with international brands; either via their Republic physical presence or an international website.

Key international brands online include Amazon, Aliexpress, ASOS, Alibaba, Allegro and Littlewoods.

MARKETINGDigital ad spend in 2015 was worth €263m according to IAB Ireland, up 34% on 2014. The mobile-optimised element of this spend increased by 132% over the same period and now represents over a third of total spending. Social media has incredibly high levels of penetration. 60% of internet users have a Facebook account and 80% of these access it via the app. 79% of account holders access the account daily. Video on Demand is also an area of massive growth while WhatsApp and Snapchat see high levels of engagement. Google search is a key driver of traffic and email marketing plays an important role in driving sales. Voucher usage is popular in the Republic, both for acquisition and retention of customers. Global marketplaces such as Amazon and eBay have a strong presence, including their .co.uk and .com websites.

CROSS-BORDER SHOPPINGHaving a shared border, culture and relationship with Northern Ireland has obviously encouraged consumers in both territories to regularly shop cross-border. 86% of online shoppers made an international purchase during 2015; creating a market worth €1.5bn and expected to exceed €2bn in 2016. Fashion and health & beauty are the favourite verticals while consumers cite choice and price as the prime motivators.

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OPTIMISING CUSTOMER EXPERIENCELack of trust of foreign sites, concerns around returns / refunds and a perceived lack of need are the main reasons holding Irish consumers back from online cross-border shopping. Data protection is a key concern, particularly in the 16-24 age group and international merchants would be well advised to take these concerns into account across all age groups, especially when collecting information for marketing purposes. There is a strong consumer protection ethos in the country with ECC-Net having a presence and a powerful Competition and Consumer Protection Commission all having a role in helping consumers and business.

LEGAL FRAMEWORK AND REGULATIONThe Republic, as a member of the EU, derives much of its consumer legislation from this source. Like many countries, certain elements of law are based on very old principles that, while being updated in certain contexts, still hold true today. Trading into Northern Ireland will trigger requirements around UK law, which can be found in the UK passport.

FINANCE & PAYMENTSOnline payments in the Republic are predominantly card-based, with Visa having the largest market share at 65%. PayPal is also a major player with 20% usage. Card Not Present (CNP) fraud grew at a modest 3% in 2013, less than the growth in online transactions. 3D Secure is in operation and any merchant handling payment card data must conform to PCIDSS rules.

LOGISTICSThe Republic has 2.2 million residential and business addresses and a population of 4.6 million spread across an area of 70,000 sq km and 10 major conurbations. Over a fifth of these consumers reside in Dublin but much of the population lives in rural and semi-rural locations. That said, delivery to these customers presents no significant logistical challenges and fulfilment of online orders has been recently expedited by the introduction of postal codes unique to each address. Most major international carriers service the country while companies like Nightline can integrate both locally and internationally. Click & collect is increasing in popularity as are parcel lockers such as Parcel Motel.

Northern Ireland adds another 1.8 million customers to the overall Irish market who, while politically part of the UK, can often be served by the same logistics solutions as in the Republic.

CONCLUSIONCombined with the exposure to global influences, excellent internal communications infrastructure and high levels of adoption of digital technologies, the Republic represents an excellent opportunity for a global online merchant looking for markets to target; with the right offering this could easily be combined with opportunities in Northern Ireland and the wider UK.

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TERRITORY OVERVIEW

Republic of Ireland

Official Domain suffix: .ie

With a population of just over 4.5 million, the Republic represents an attractive export market for online merchants particularly from the UK. It possesses the fourth-highest GDP per capita in the EU, good infrastructure and a digitally-connected population. The predominant language is English, with 30% of the population also speaking Irish Gaelic – which is supported by the government.

The country boasts a coastline of over 1,400 km and a strong tourist industry, with over 8.6 million international visitors every year according to the Central Statistics Office, January 2015. International travellers are catered for by three main international airports in Dublin, Cork and Shannon. The Republic consists of four separate provinces with the capital, Dublin, located on the eastern coast.

As a member of the EU, the Republic has strong trading links within the community and further afield. Its legal and taxation systems also mean that it is an attractive place for international businesses to base themselves, particularly when looking to trade into the EU. Several large multinationals are currently headquartered in the country; notably Google and Facebook.

At the beginning of 2016, the World Bank ranked the Republic as 17th for ease of doing business; out of 189 countries.

Source: www.cso.ie March 2016

LEINSTER

MUNSTER

ULSTER

CONNAUGHT

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COUNTRY STATISTICAL PROFILE

World ecommerce Rank: 30

Capital: Dublin

Geographical size: 69 797 sq km

Population: 4,604,029 (2014)

GDP: €185.412bn (2014)

Official EU language(s): Irish Gaelic, English

Political system: parliamentary republic

EU member country since: 1 January 1973

Currency: (€) Euro, since 1 January 1999

Schengen area member? No

Source: EC: www.europa.eu

SK

EU

HRHU

PL

EL

PT

SI

CZ

IT

UK

BE

SE

IEDK

NL

ISAT

FI

DE

CHNO

LU

R

BG

RO

LV

EE

LT

MT

CYES

GDP per capita in Purchasing Power Standards (PPS)(Index: EU28 - 100) 2014

60 80 100 120 140 160 180 200 220 240 260 280

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The Republic’s top trading partners are:

• Exports: US (21%), UK (16%), Belgium (14%) and Germany (7%)

• The British Irish Chamber of Commerce estimates trade at €60bn in 2016 – over €1bn per week, and their goal is to see €100bn per annum

• Imports: UK (39%), US (10%), Germany (8.5%) and Netherlands (6%)

The country’s economy is driven largely by foreign direct investment, a well-educated workforce and a government keen to reduce its borrowing deficit. Key industries include technology, financial services, pharmaceuticals, engineering and clean technology.

The UK, being the closest country geographically, is a strong trading partner while the influence of global, US technology brands impact the import / export figures.

A large proportion of the population live in rural areas, including smaller towns and villages. The capital city, Dublin, is by-far the largest conurbation with over 1 million inhabitants.

The Republic – largest population centres

Name Province Population1 Dublin Leinster 1,024,027

2 Cork Munster 190,384

3 Dún Laoghaire Leinster 185,400

4 Limerick Munster 90,054

5 Galway Connaught 70,686

6 Tallaght Leinster 64,282

7 Waterford Munster 47,904

8 Swords Leinster 36,924

9 Drogheda Leinster 33,441

10 Dundalk Leinster 33,428

Source: www.cso.ie Central Statistics Office, Population Census 2011.

Republic of Ireland OECD Statistical Profile

Unit 2012 2013 2014

Production and income

GDP per capita USD current PPPs 45 757 46 858 48 733

Gross national income (GNI) per capita USD current PPPs 37 868 39 993 42 254

Household disposable income Annual growth % -1.0 -2.3 0.6

Economic growth

Real GDP growth Annual growth % 0.2 1.4 5.2

Economic structure: share of real value added

Agriculture, forestry, fishing % 1.2 1.4 1.6

Industry % 24.5 23.4 22.7

Trade, transport, accommodation, restaurants, communication % 26.1 27.7 ..

Finance, insurance, real estate, business % 25.9 26.9 ..

Other services (ISIC Rev.4 O - U) % 19.4 19.7 ..

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Unit 2012 2013 2014

Taxes

Taxes on the average worker % of labour cost 25.9 27.1 28.2

Trade

Imports of goods and services % of GDP 90.0 87.4 95.4

Exports of goods and services % of GDP 107.2 106.7 113.7

Prices and interest rates

Inflation rate: all items Annual growth % 1.7 0.5 0.2

Producer Price Indices (PPI): manufacturing Annual growth % 2.8 1.3 -0.5

Long-term interest rates % 5.99 3.83 2.26

Purchasing power and exchange rates

Exchange rates EUR per USD 0.78 0.75 0.75

Employment

Employment rate in population aged 15-24 % 27.9 28.8 27.2

Employment rate in population aged 25-54 % 69.4 70.8 72.3

Employment rate in population aged 55-64 % 49.5 50.9 52.6

Research and Development (R&D)

Gross domestic expenditure on R&D Mn USD 3 160 .. ..

Population

Total population ‘000 persons 4 585 4 593 4 610 |

Population growth rates % 0.2 0.2 0.4 |

Youth population aged less than 15 % of population 21.7 21.9 22.0 |

Elderly population aged 65 and over % of population 12.0 12.4 12.7 |

Last updated: 12 November 2015; disclaimer: http://oe.cd/disclaimer

.. Not available

| Break in series

Source: OECD Factbook statistics. For explanatory notes, see OECD Factbook 2014 (DOI: 10.1787/factbook-2014-en) (DOI: 10.1787/csp-irl-table-2015-2-en)

NORTHERN IRELAND

Northern Ireland is referenced in this report due to the shared border with the Republic and the close integration of many of the communities. These factors, a common geography and different economic environments mean that cross-border trade is important both sides of the border.

As part of the UK, Northern Ireland operates under the UK legal system, is regulated by some of the same bodies as the rest of the UK but does have a devolved government which is responsible for delivery of local services and certain elements of legislation.

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POLITICAL & SOCIO-ECONOMIC ENVIRONMENT

The Republic has a largely ceremonial president as head of state, an elected parliament, with the government being led by the Taoiseach (prime minister). The government is often dominated by either Fianna Fáil or Fine Gael. There have been a number of instances where a coalition government is required and this has usually involved the Labour Party. In recent years Sinn Féin has again seen increased support.

A cabinet of 15 ministers steer the executive power of the government. Legislative power is retained by the parliament while the independent judiciary oversees the legal system. The judiciary is headed by the chief justice who presides over the Supreme Court.

The Republic’s economy was hit particularly hard by the global recession of 2008 and the ensuing ‘Eurozone crisis’. Having been referred to as the ‘Celtic Tiger’ during the first decade of the new millennium, the economy became too heavily dependent on private and commercial property markets.

The global financial crisis hit values of these assets and the high level of government debt couldn’t be supported with slower economic activity. As a result, the Republic was one of the first countries to work with the EU / IMF on a €85bn bailout. The country is also the first to come out of this arrangement and the economy is growing once more.

One of the reasons for its success is the attractiveness to international investors, mainly due to its tax regime and the ease of doing business. There is increasing pressure on the government to amend some of these measures so as to ‘level the playing field’ with their European colleagues.

A recent change in US legislation will also have an impact. Reverse take-overs, whereby big companies buy smaller companies in countries with more favourable taxation laws and then move their headquarters to take advantage of these rules have been curbed.

2014

Northern Ireland 1,840,498

Antrim & Newtownabbey 139,966

Armagh, Banbridge & Craigavon 205,711

Belfast 336,830

Causeway Coast & Glens 142,303

Derry & Strabane 149,198

Fermanagh & Omagh 114,992

Lisburn & Castlereagh 138,627

Mid & East Antrim 136,642

Mid Ulster 142,895

Newry, Mourne & Down 175,403

North Down & Ards 157,931

Table 1: Total population and by county of Northern Ireland. Source: www.nisra.gov.uk

Total population: 1.84 million

Gross Value Add (GVA): growth of around 1.4% in 2016 (versus 7% in Republic) Source: PWC April 2016

Average household Income: £20,934Source: PWC April 2015

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ONLINE & MOBILE STATISTICS OVERVIEW

The Republic ranks closely behind the UK and ahead of the EU average in terms of the EC’s Digital Economy and Society Index (DESI). DESI is a mechanism by which the EC measures the relative maturity of an EU member state against the objectives of the Digital Agenda – a drive to increase the digital economies of EU member states and thereby promoting digitally-enabled cross-border trade, otherwise known as the Digital Single Market.

Digital Economy and Society Index

Denm

ark

Swed

en

Nethe

rland

s

Finlan

d

Norw

ay

Belgi

um

Unite

d King

dom

IREL

AND

Luxe

mbou

rg

Eston

ia

Germ

anyM

alta

Austr

ia

Lithu

ania

Portu

gal

Europ

ean U

nion..

.

Czec

h Rep

ublic

Fran

ceSp

ain

Slove

niaLa

tvia

Hung

ary

Slova

kia

Polan

d

Cypr

us

Croa

tia Italy

Gree

ce

Bulga

ria

Roma

nia

17.5

1. Connectivity

Legend

2. Human Capital3. Use of Internet4. Integration of Digital Technology5. Digital Public Services

15

12.5

10

7.5

5

2.5

0

Source: EC Digital Scorecard March 2016

There is an interesting split in levels of internet access (77% in the north for example), partly reflecting the rural nature of much of the country. As shown in the graph below, the biggest conurbations are mainly in the south and east of the country, which is reflected in the availability of infrastructure there.

Homes that have access to the internet.

77% 84%

Source: Eurostat; ec.europa.eu/Eurostat; 2014

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Demographically, there is also an interesting distribution of households with access to the internet with large domestic groups, either all adults or those with dependent children being more likely to have internet access. The group most likely to have access are those consisting of two adults and two children; a group also interesting to most marketers. Interestingly, 77% of households in Northern Ireland have access to super fast broadband (above 33 mbps) according to Ofcom in 2015.

Households with computer connected to the internet (%) by household composition

Household composition 2010 2011 2012 2013 2014 2015

1 adult, no dependent children 42 51 55 55 56 60

2 adults, no dependent children 66 72 74 78 76 81

3 or more adults, no dependent children 85 88 90 92 94 95

1 adult with dependent children 61 76 78 82 86 88

2 adults with dependent children 87 93 95 95 96 97

3 or more adults with dependent children 90 95 96 95 95 96

All household compositions 72 78 78 82 82 85

Source: www.cso.ie ecommerce Household Survey, Central Statistics Office, 2015

In common with other countries with more advanced digital infrastructure, consumption patterns of media are changing dramatically, while online transactions are increasing. For example, nearly half of all adult internet users are consuming news output via digital channels. This is 20% lower than the EU average but overall levels of internet access are higher. By contrast, 68% of households with a television are consuming video on demand (VOD). Likewise, the use of social networking sites, online shopping and banking are all ahead of the EU average, indicating a willingness to transact online.

Ireland EU

(Digital Economy and Society Index)DESI 2016

Value Rank Value

News% individuals who used Internet in the last 3 months (aged 16-74)

48% (2015) 28

68% (2015)

Music, videos and games

% individuals who used Internet in the last 3 months (aged 16-74)

43% (2014) 23

49% (2014)

Video on demand

% households that have a TV 68% (2014) 541%

(2014)

Video calls% individuals who used Internet in the last 3 months (aged 16-74)

36% (2015) 21

37% (2015)

Social networks% individuals who used Internet in the last 3 months (aged 16-74)

66% (2015) 15

63% (2015)

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Ireland EU

(Digital Economy and Society Index)DESI 2016

Value Rank Value

Banking% individuals who used Internet in the last 3 months (aged 16-74)

64% (2015) 11

57% (2015)

Shopping% individuals who used Internet in the last year (aged 16-74)

63% (2015) 13

65% (2015)

Table 2: Showing Digital Economy and Society Index 2016 for Ireland and compared to the EU average

Source: https://ec.europa.eu/digital-single-market

In 2015 eir (Eircom Limited; www.eir.ie) carried out a consumer survey which, amongst other areas, looked at the types of devices present in households. Laptops were still the most popular device although this had fallen off by a modest 3% over the previous year. Tablets are certainly in the ascendency while smart TVs are one of the biggest gainers. This is reflected in the strong usage of VOD highlighted in the EC DESI data.

Laptop

Tablet

MP3 Player

e-Reader

Smart TV

72%72%73%

70%10%

26%41%

49%

41%38%

40%36%

n/an/a

7%12%

16%20%

14%21%

Any Device in Household Jul 12Aug 13Aug 14Aug 15

Figure 1: Devices used in Irish households. Source: eir connected living survey 2015

However, this survey may not reflect actual usage of these devices. Their availability doesn’t always equate to usage and, in common with other economies, mobile devices are taking on an ever-increasing role in consumption of media and transactional activity.

Figure 2: Activities carried out over devices in the home. Source: eir connected living survey 2015

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Providing a slightly different view than the EC DESI results, the eir connected living survey looked at more specific activities. Communication is obviously a very important part of device usage with personal and work email access being some of the most often uses of the technology. Entertainment activities, such as YouTube, movies, catch-up TV, music and sports are all showing increases in usage over the previous year. Access to online banking is also showing a healthy 5% increase over the previous year.

Overall, the picture being presented indicates an increasing adoption of digital technologies for accessing products and services. From a broader perspective, international merchants would be advised to not ignore the more traditional forms of communication; particularly when looking at building a brand in the country, even one that is only going to be available digitally.

To set some context around online retail activity in the Republic, it is important to look at the overall retail sector. According to Retail Ireland, total retail in the Republic is forecast to be worth €35bn in 2016 (most recent figures available) while the Irish Central Statistical Office (CSO) have reported an average year-on-year growth of 1.3% since 2001. More recently, year-on-year (YOY) figures have looked healthier, with January 2016 being 10.3% up on the same time the previous year.

The majority of the domestic retail sector is made up of family-owned businesses. Of the 42,000 retail and wholesale businesses active in the Republic in 2015, 75% fall into this category, 73% have less than 10 employees and 83% are Irish-owned.

This points to a fragmented retail market which is mainly aimed at serving local communities. Bigger conurbations offer more opportunities for scale but the overall picture is one in which ecommerce offerings should prosper.

66%

59%

50%

48%

37%

35%

35%

30%

22%

23%

Use personal email (61%)

Watch YouTube (52%)

Online Bank (46%)

of workers check workemail at home (42%)

use catch-up TV services likeRTE Player, TV3 Player, 4oD etc.

Skype nowadays (31%)

Download/stream orwatch movies online (26%)

Watch On-Demand services like Netflix (20%)

Watch or stream live sportsor other events online (17%)

23% stream music (16%)

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9.1

9.8

11.9

8.7

4.4

10.2

8.78.2

6.9

9.4

6.4

10.3

Apr 2015 Jul 2015 Oct 2015 Jan 2016

IRELAND RETAIL SALES YOY

Figure 3: Offline retail sales year-on-year growth since February 2015. Source: TradingEcomomics.com January 2016

Recent figures from the CSO shows that there has been an 11% increase in sales volumes between February 2015 and February 2016. Values however have only increased by 8.7% indicating potential for some deflationary pressures and showing the importance of value to the Irish consumer, many of whom will still be feeling the effects of the financial crisis of 2008 and onwards.

February 2016 (Provisional) - January 2016 (Final)Seasonally Adjusted Retail Sales Index-All Businesses

(Base Year 2005 = 100)Volume Index Value Index

February 2015 103.4 93.4January 2016 114.4 101.9February 2016 114.8 101.6Monthly % change 0.3 -0.3Annual % change 11.0 8.7

Figure 4: CSO Retail Sales Index. Source: CSO statistical release, 30 March 2016

These figures do however include motor trades. With these activities excluded, volumes increased 7.1%. From a monthly perspective, volumes increased for books and other retail sales. Exceptions included electricals, which fell 2.4%.

From an ecommerce perspective, the indicators point to a consumer base that is ready to transact online, an infrastructure able to support this activity and a retail environment ideally suited to the benefits of digital channels. 2016 data from Eurostat shows that Irish businesses are seeing an increasing proportion of their turnover coming from ecommerce. In 2015, this equated to 37%, an increase of 13% since measurement started in 2010 and one of the highest in the EU28. This growth is another indicator that Irish consumers are already engaging with brands via digital outlets.

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Time 2010 2011 2012 2013 2014 2015European Union (28 countries) 14 14 15 14 15 17Czech Republic 19 25 24 26 29 30Denmark 17Germany 18 17 17 14 13 17Ireland 24 17 21 31 32 37

Figure 5: Percentage of turnover from ecommerce channels. Source: Eurostat.europa.eu February 2016

These figures are reflected in the growth of domain registrations; indicating that many more Irish businesses are developing some form of online presence. However IEDR, the Irish Domain registrar, reported in 2015 that 91% of small and medium enterprises (SMEs) don’t have a transactional website. The same report also highlighted that traffic to online merchants’ websites increased by 27%, revenues rose by 45% and average order value increased by 10%; indicating not just an increase in visits, but also in spend. Irish consumers are becoming much more confident in their purchasing behaviours.

Wolfgang Digital, in their Q4 2015 ecommerce Report looked at the devices used for accessing transactional websites. In 2014, the dominant device was desktop which was responsible for 54% of traffic. In 2015, smartphones had increased by 10% to 39% of all traffic. As tablet had stayed at 17% and desktop had fallen by 10%, it is reasonable to assume that smartphones are becoming much more important in the multichannel journey. This isn’t to say that only retailers with stores and websites are gaining, although there is an obvious benefit for them – consumers are taking smartphones with them to combine offline and online research and then making the purchase in the appropriate channel.

2014 2015

29%

17%

54% 39%

17%

44%

MOST POPULAR DEVICESFOR E-COMMERCE TRAFFIC mobile desktop tablet

Figure 6: Changing trends in devices used for visiting ecommerce websites. Source: Wolfgang Digital ecommerce report Q4 2015

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Combined, mobile devices now outstrip desktop in terms of total traffic at 56% versus 44%. This doesn’t take into account the channel via which the final transaction takes place and it is highly likely that desktop devices will still be responsible for the majority of transactions.

The role of smartphones is further highlighted in the Consumer Barometer 2015 data, which shows that 38% of users utilise the devices for product discovery while 27% use the functionality to access more information about a product; prices, features and availability.

get ideas/inspiration onlineon smartphones

compared products/prices/featuresonline via smartphone

38%27%

If issues are encountered while accessing websites via a smartphone25% will find another site that works beer on a smartphone

Figure 7: Role of smartphones in purchase decisions. Source: IAB/Consumer Barometer 2015

The data also highlights the importance of a mobile-optimised experience with a quarter of users saying that issues would encourage them to go to another website.

The Irish market sees over 30% of internet traffic going via smartphones; over a third higher than the EU28 average and ahead of both the US and UK markets. This is reflected in device penetration where, according to the Consumer Barometer 2015, 75% of the adult Irish population use a smartphone.

In parallel to other surveys showing that VOD is growing in the Republic, Statcounter report that over half use their smartphones daily to access video. According to Ofcom, 63% of adults in Northern Ireland have smartphones and 54% of households have access to a tablet.

60% of mobile device owners have transacted via their devices. On smartphones, Android devices are ahead of Apple in terms of accessing apps and while the same is true for tablets, the difference is smaller.

Transactional from Mobile

GPSFunctionality

GPSApp

ResponsiveDesign

MobileOptimised

GooglePlay App

Google PlayTablet App

Transactional from App

Mobile PageSpeed Score

iPhoneApp

iPadApp

60%68%36%42%76%60%58%

28%55

54%54%

Figure 8: Smartphone landscape. Source: IAB Ireland Mobile Audit 2015

23

From the merchant’s perspective, only 42% of Irish websites are mobile responsive but 76% are mobile-optimised. This does highlight the importance of a mobile offering for any digital merchant looking to trade into the Republic. The dataset also reinforces the importance of page load speeds for mobile users; although it does suggest Irish mobile sites perform slowly. Page speed is only one measure of performance and shouldn’t be taken to mean that Irish retailer’s mobile websites are all bad; this might not be the only competitive area that an international merchant should look at.

It is difficult to get an accurate picture of the value of the retail market in the Republic; even more-so for ecommerce. The latest published figures from Visa report that ecommerce spend in the Republic was worth €5.6bn in 2014, up 32% on the previous year. This would include sectors that many wouldn’t consider e-retail but PayPal / Ipsos research, published in Checkout magazine, suggests that e-retail (as opposed to broader ecommerce) will be worth €5bn in 2016.

PayPal’s insight also suggests that m-commerce was worth €1.4bn in 2015, up 65% on the previous year and that m-commerce in the Republic will have doubled by the end of 2017 to €2.7bn.

There is more insight as to what consumers are doing online. According to the eir connected living survey 2015, Dubliners are the most likely to shop online, with 64% of the population of the city having done so. Given that 25% of the population of the Republic is Dublin-based this is clearly a primary target market for an incoming retailer. There isn’t much difference between genders and while the 16–49 age group is the most digital, the over 50s shouldn’t be ignored.

Total Gender Age RegionDublinMale Female 16-24

57% 57% 58%

73%77%

67%

42%

17%

72%

31%

64%

55%

62%61%

54%49%

25-34 35-49 50-64 65+ 46-49 50+

OutsideDublin

All Leinster

(incl Dub.)Leinster

(excl Dub.)

Munster

Conn/Ulster

100

90

80

70

60

50

40

30

20

10

0

Figure 9: Demographic of the Irish online shopper. Source: eir connected living survey 2015

It is also interesting to note that those shoppers in their late 40s actually appear more likely to shop online than their younger 40s peer group.

With regards to what Irish consumers are buying online, travel is the biggest sector, especially when all forms of travel-related spending are taken into account. For example, flights (70%), hotel bookings (66%) and car hire (21%) are the main categories for those online users who have made a purchase.

However, fashion products (which includes clothing and shoes) have been purchased online by 69% of online users. This behaviour mirrors that of other advanced ecommerce markets while electricals have been purchased online by less than a quarter of users. This is a surprise as in many, early adopter markets, electricals drove online growth and have only recently been equalled or surpassed by fashion spending. This may be an indication that, domestically in the Republic, the choice of fashion brands may not be sufficient to meet consumer demand.

24

Some of the sectors achieving less penetration online include furniture and computer games. Only 6% of online users have made an ecommerce furniture purchase and nearly a third have said they never will. 18% of the group have made online purchases of computer games while 15% say they never will. This does leave a large potential market but computer gamers are generally seen as more accepting of online purchasing, particularly as many games are now streamed from online servers.

Would never buy online

Flights 35+, Dublin

Female, 16-34s

35+

Males

35+, Males

Males

Dubliners

Clothes / Shoes

Hotels Bookings

Books / Magazines

Insurance Products / Services

Electruc goods (including mobile phones)

Music / Film Downloads / CDs / DVDs / TV shows

Car Hire Bookings

Utility products (e.g. Gas and Electricity)

Computer Games

Communication and Entertainment services

Groceries (non-alcohol)

Furniture

Wine / Other alcohol

Pharmaceutical Drugs / Medicines

Plants

Bought in the past 12 months

4%

11%

11%

13%

14%

14%

15%

11%

30%

28%

46%

69%

41% 1%

2%

3%

6%

12%

17%

18%

20%

21%

28%

30%

31%

31%

66%

69%

70%

10%

9%

4%

One final point of interest is the 30% of online users who will never buy groceries. This isn’t uncommon in many markets as the ability to see and choose fresh produce often outweighs time-saving benefits on the packaged products and dry goods. With 12% already buying online and 58% remaining to be convinced, there is still a lot of potential in this sector.

Analysis of the top online shopping destinations shows some interesting insights. All of the brands in the top 20 are international; some with local domain names but most without.

Top 20 Shopping websites

Source: www.similarweb.com April 2016

Looking at the broader top 50, other international brands are well represented with Marks & Spencer, New Look, River Island and Currys PC World all present. Auction and classified websites haven’t been included although some of these do sell direct from retail.

1 Amazon.co.uk2 Amazon.com3 Aliexpress.com4 Argos.ie5 Asos.com6 Sportsdirect.com7 Littlewoodsireland.ie8 Alibaba.com9 Ikea.com10 Lidl.ie

11 Amazon.de12 Etsy.com13 Allegro.pl14 Aldi.ie15 Debenhams.ie16 Boohoo.com17 Tescomobile.ie18 Nextdirect.com19 Smythstoys.com20 Woodiesdiy.com

25

MARKETING & BRANDING

Any merchant, irrespective of the main channel of sales understands that marketing and communications are central to increasing market share. Google’s Consumer Barometer survey (2015) provides some interesting insight into the Irish consumer; including what communication channels they reference before making a purchase decision.

Search is obviously the biggest discovery medium, but that might point to different sources of insight and research; customer reviews, manufacturer’s websites, price comparison, video and advice sites / blogs.

3%

Email (eg o�ers, newsleers)

Price Comparison Sites

Advice sites / review sites / forums / blogs

Online video sites

Search engine

Online research: on brand websites

5%

5%

21%

24%

45%

2%

2%

2%

7%

7%

8%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Online source of infomation prompting purchase decision

Figure 10: Source of online information prompting purchase decisions. Source: Consumer Barometer 2015

Social networks are gaining in importance, but users are more likely to refer directly to a brand’s page than access them through ads; perhaps it is peer-input that is more important for product discovery. Amongst all of the other communication mediums, email still ranks strongly, quite possibly due to usage of deal-based content in these channels.

According to March 2016 data from IAB Ireland, digital ad-spend in the country was worth €263m in 2015, up 34% on the previous year. Of increasing importance, the growth of smartphone usage is driving mobile ad spend, itself up 132% on the previous year and now responsible for a third of total spend in the digital arena. At over €86m this is now a sizeable proportion of the total spend and requiring a different approach to ‘traditional’ digital ad-spend. Size of screen, browsing habits, attention span and functionality all impact how a mobile advertisement engages with an audience.

Display advertising on digital channels has grown by 35% in 2015 and represents 38% of total spend at €99m. The overall performance of display is being driven by the uptake of social media advertising, which lends itself to the format and reflecting users’ increased engagement via social channels. Increasing by 108% in 2015 over its 2014 value, the segment is now worth over €28m.

Social Media(108%*)

Mobile (132%) Video ondemand (63%*)

All display(35%**)

Paid Search(43%)

0

25

50

75

100

125 Figure 11: Growth in digital ad-spend, by category and comparing 2014 and 2015. Source: IAB Ireland 2016

26

Paid search, which at 53% takes the biggest slice of budget for digital ad-spend, is still increasing and worth €137m; 43% up on 2014.

With the IEDR actively encouraging smaller merchants to increase their online activities, paid search and social ad-spend are likely to continue increasing at these levels. PWC are quoted (2016) as estimating that total digital ad-spend is likely to increase by an average of 12% over the next two years while independent agencies are quoting 13-16% for 2016. These levels of growth in advertising are a good indicator that the online market in the Republic still has considerable expansion potential.

Digital ad-spend is one element of online marketing available to merchants. The following graph, taken from data compiled by AMAS.ie, indicated the preferences for businesses advertising via digital channels. While these data-points relate to insight from 2011, the general themes are still pertinent in 2016.

Audio / Video (e.g. podcasts)Banner Advertising

Blog / Social NetworkingClassifieds

Email CampaignsGames

Mobile AdvertisingOnline PR

Search Engine MarketingSearch Engine Optimisation

Website SponsorshipViral Marketing

Other

Preferred Online Formats

0 10 20 30 40 50 60 70

24%49%

55%

13%

67%

24%

34%36%

52%19%19%

8%

3%

SEO will continue to be an important focus for most businesses as this represents the main method of discovery. Interestingly, social media activity now ranks as one of the preferred promotional tools while email remains an important communications vehicle. The challenge with these indicators though is that they don’t always equate to expenditure or success. Search Engine Marketing (SEM) for example is a long utilised marketing technique, is a known quantity and therefore receives less attention compared to social, which is newer and arguably still emerging as a marketing tool.

SOCIAL MEDIA

Social media is a board and rapidly-changing category covering personal activity, community, communications, text, graphics and video; Irish marketers are looking to make sense of this evolving landscape and planning resources accordingly.

Ad-spend by marketers in the Republic has already been shown to be increasing but there is a mixture of views as to what these channels should be used for. According to the latest data available, a 2012 survey by AMAS and the Marketing Institute of Ireland, building relationships (84%) was the biggest driver for merchants to get involved in social activity.

Building brand awareness, at 76%, came in second while understanding what customers were saying about brand / products was third at 66%. Interestingly, none of the responses involved selling more product. Indirectly they all have an impact but there was more concern around remaining up-to-date with developments in social media techniques (52%) although understanding customers better was also a key motivator (79%).

Figure 12: Irish marketers preferred digital advertising channels. Source: AMAS, 2011

27

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

84%76%

66%

50%43%

1. Building Relationships2. Building Brand Awareness3. Listening and Monitoring

4. Commenting

5. Gathering Customer Information

Why social media is used

Figure 13: Why Irish marketers engage in social activities. Source: AMAS/MII survey 2012

Irish consumers are flocking to social media in numbers that make other connected countries look pale by comparison. Facebook is by-far the largest platform at 60% penetration, nearly treble that of Google+. 65% of adults in Northern Ireland regularly use their Facebook account. Users of Facebook are accessing the platform predominantly via mobile devices, at a rate of 80% versus 20% by desktop according to 2016 research by Amárach.

Of the Facebook users, 79% access daily and a third of these add an update at least once per day. YouTube usage, at 42% reflects previous figures showing the rapid increase in popularity of VOD and viewing of video clips via mobile devices.

0%Facebook YouTube Twi�er LinkedIn Google+ Instagram Pinterest Tinder

10%

20%

30%

40%

50%

60%

70%

60%

42%

26%24% 23%

18%15%

5%

Figure 14: Popular social medium platforms for Irish adults. Source: Statista & Amárach Research March 2016

28

To provide some age-related context, Ipsos MRBI reported in June 2015 that the 15-18 age group in the Republic had a slightly different usage profile when compared to the overall online adult population. Facebook is still the biggest social network at 94% while Instagram scores strongly at 68% usage and Twitter at 61%.

There is a big drop to Google+ which is used by 37% of the group, Tinder by 17% and Pinterest at 14%. These differences are particularly interesting to brands targeting these groups and point to changes in interaction as this generation ages; a brand might not target this group now but they should be aware of the use cases when the users get older and ‘fall’ into the merchants’ customer demographic.

Twitter, the messaging service, is currently used by 26% of the online population in the Republic. A third of these users visit at least once per day and 11% add or respond to a comment. Despite the functionality aimed at mobile devices, only 25% of Twitter users access via a smartphone which tends to go against the ‘on-the-move’ use in other territories.

Messaging apps are going from strength-to-strength, particularly amongst younger users; although there is a usage case for older groups. In the Republic, 8% of 35-54 year olds have a Snapchat account, with about 20% using it daily according to Ipsos MRBI in June 2015. This rate increases in the 25-34 year-old segment to 35% having an account; daily usage is up too at 51%.

By-far the biggest user group by age is the 15-18s, with a significant 84% having an account and 85% using it daily.

In follow-up work in September 2015, Ipsos MRBI were reported by RTE to have found that, across all age groups, Facebook Messenger was the most widely-downloaded app in the Republic, with nearly 50% of adults having an account and half of these using it daily. By contrast, only 22% of adults have a Snapchat account but 68% of those that do use it daily. More adults have downloaded WhatsApp (37%) but more than half of these use it daily.

SEARCH

Search Engine Market Share in Ireland

15-18 years olds account ownership of social messaging platforms in Ireland.

Snapchat 84%

FB Messenger 79%

Viber 70%

Skype 59%

WhatsApp 37%

Vine 27%

0 50% 100%

Google

Bing

Yahoo

Ask Jeeves

AVG Search

100%

2.45%

1.99%

0.58%

0.05%

Source: mvfglobal 2015

Search engines ranked by Irish consumer usage.

29

EMAIL MARKETING

Although more up-to-date data isn’t widely available, research by Bluecast Digital in 2012 reflects behaviours seen in other markets. Personalisation is gaining momentum, with just over a third of Irish merchants not offering some level in the marketing emails they are sending out. It would be expected that more up-to-date data would show this figure falling further and the sophistication of personalisation increasing.

By name only

By more than name

Use targeted content to specific user

Do not personalise

Don’t know

41.1%

5%

27.4%

11.5%15%

Figure 15: Levels of email personalisation used by Irish merchants. Source: Bluecast Digital 2012

Open rates in the Republic are also encouraging, with only a quarter of merchants seeing levels at less than 10%.

0-10%

11-20%

21-30%

31-40%

41-50%

51+%

Ope

n R

ate

26%

26%

14%

12%

12%

10%

Figure 16: Email open rates. Source: Bluecast Digital 2012

The all-important click-through is promising, with nearly half of merchants achieving levels of 11% or more. 13% of merchants surveyed had rates higher than 21%, indicating that campaign planning and techniques are paying dividends to those investing time and effort in their implementation.

30

0-2%

3-5%

6-10%

11-15%

16-20%

21+%

Clic

k-th

roug

h R

ate

7%

23%

22%

20%

15%

13%

Figure 17: Email click-through rates. Source: Bluecast Digital 2012

The increase in social media usage is also being noticed by email marketers, with increasing numbers including social elements in their campaigns. This might be as simple as a ‘share’ button which helps disseminate campaign messages to friends or more closely-integrated campaigns which include elements of social media, links to product pages and encouraging ‘likes’ for products or brands.

Yes

No63%

37%

Figure 18: Irish merchants using social media in their email campaigns. Source: Bluecast Digital 2012

It is important to note that different verticals will see varying results, as will SMEs versus well-known brands. However, Wolfgang Digital reported in January 2016 that email delivered 10%+ of total website traffic and 10% of total revenue. Email is still a key business driver and consumers in the Republic are just as likely as their international cousins to respond to well-crafted campaigns.

31

CROSS-BORDER SHOPPING

With a fragmented retail high street made up of many smaller businesses, a few domestic brands and many of the bigger European multiples, the Irish market could look crowded. However, a number of surveys and data sources indicate that this mixture isn’t necessarily providing Irish customers with the choices that they are looking for. Likewise, for businesses, the smaller size of the consumer base is encouraging Irish businesses to look further afield for customers.

A 2015 survey by Eurostat for the EC ranked the Republic as one of the most advanced cross-border economies in Europe. The survey highlighted that not only do a significant number of businesses use online to sell directly to the domestic market, they are also more advanced in the proportion of sales that they make to other EU28 countries; nearly 30% of total revenue is derived via ecommerce and over 15% is made into the EU. Obviously this relates to multichannel businesses.

0%

5%

10%

15%

20%

25%

30%

35%

IE NO SE DK DE BE CZ NL UK SI FR HR PT FI MT LT ES AT SK EE HU TR PL CY LU LV IT BG RO EL

Sales to own country Sales to other EU country Sales to other EU country

to other EU country EU-28; 8%

to own country EU-28; 18%total e-sales EU-28: 19

Figure 19: Ecommerce sales to own country and other EU countries (% enterprises). Source: Eurostat; November 2015.

From the consumer perspective, a Google Consumer Barometer Survey shows that 68% of Republic shoppers make at least one cross-border purchase every year. Separate Ipsos / PayPal research in 2015 puts this figure as high as 86% although it is possible that some of these purchases are from across the border with Northern Ireland. Whichever figure is correct it is clear that Irish consumers are certainly prepared to shop with non-domestic retailers.

I have never bought products onlinefrom abroad

I have only bought products onlinefrom abroad once

Less o�en than once a year

At least once a year

0% 10% 20% 30% 40% 50% 60% 70% 80%

11%

5%

12%

68%

How o�en do people purchase productsonline from foreign countries?

Figure 20: How often Irish consumers purchase from foreign countries. Source: Google Consumer Barometer Survey 2015

32

Books, DVDs, CDs and PC games, clothing and health & beauty are the top categories for cross-border purchasing. The former category is dominated by Amazon while European fashions brands have a strong physical and digital presence in the Republic.

Computing and hardware is another major category while there are a number of other significant sectors which are smaller but offer some insight as to local availability. Obviously, the proximity of the UK provides a natural shopping resource for the Irish consumer, although other territories such as the US and Germany have a strong influence and products suited to market requirements.

Car parts or accessories

Cars

Food (groceries, delicacies, special food from other countries)

Drinks (alcoholic or non-alcoholic drinks)

Cosmetics, beauty or health products

Books, CDs, DVDs or Video Games

Clothing & accessories or footwear

Personal or domestic appliances

“Do It Yourself” (DIY) products, tools & garden equipment

Gis, flowers, greetings

Home & household goods, home furnishing/furniture

Toys

Sports equipment

Digital Cameras / Camcorders, Audio Devices (eg. Hi-Fi, iPod, MP3 Player)

Computer hardware, soware or peripherals

Mobile phones, SIM Cards

Other

8%

1%

5%

2%

23%

48%

50%

8%

10%

15%

12%

18%

13%

12%

23%

10%

8%

Figure 21: Most popular categories for Irish consumers shopping cross-border. Source: Consumer Barometer 2015

33

Irish shoppers spent €1.5bn on overseas websites in 2015 and this is expected to exceed €2bn in 2016, representing over a third of all online spending.

The top international e-retail destinations include the UK (74% of all international retail websites), the US (38%) and China (26%). The top 20 list of e-retail properties used by Irish consumers really reflects this level of cross-border shopping in the Irish consumer psyche.

While the most popular categories offer an obvious target for the international market, there is an argument to suggest that some of the less popular product sets would have more potential for growth, with the right proposition and offering.

OPTIMISING CUSTOMER EXPERIENCE

Consumer confidence

Irish consumers are similar to many other countries when it comes to the barriers preventing them from shopping online, as well as when considering cross-border purchases.

0% 5% 10% 15% 20% 25% 30%

It wasn’t convenient

The foreign sites I’ve seen were low quality

I don’t trust foreign online shops in general

I assume I’d struggle with the language

I worry about paying in a foreign currency

I worry about problems with customer service

I assume returns would be dicult / costly

I assume delivery takes longer

I assume it’s more expensive

It has never occurred to me

Sites in my country meet my needs

11%

2%

20%

1%

4%

18%

22%

9%

4%

18%

24%

Figure 22: Reasons cited by Irish online consumers for not shopping cross-border. Source: Consumer Barometer 2015.

Any number of the concerns about online shopping cross-border mentioned in the data above would be equally relevant to a domestic website. Distance-selling brings key areas of trust into focus. There is a view that local sites stock everything a consumer wants anyway, which may be true.

International merchants can still be competitive but the challenge is getting in front of these potential customers. The 18% for whom it has never occurred will probably find themselves faced with more opportunities to purchase cross-border as search, both from the search providers and the multi-category platforms such as eBay and Amazon, increasingly facilitate finding international merchants.

Customer service is an inherent worry about any online merchant and steps can be taken to mitigate these concerns. For example, having local language available for email and telephone support, offering local telephone numbers which are staffed during local trading times and key help and transactional pages translated so that the customer can make an informed purchase decision.

34

Functions of the fulfilment process, such as receiving goods and being able to return unwanted items, are of concern to 22% although there are now a number of solutions that enable international merchants to effectively compete against local businesses.

A core element of trust and confidence for many consumers is that of personal data – how it is used, disseminated, protected and controlled. All age groups are concerned but for those aged 35-49 particularly so; probably as a result of witnessing the development of online first-hand and having enough awareness to be able to understand the difference that having data in the digital space means versus the ‘old’ technologies. How companies process and share personal data is also of concern to this group, as it the sheer volume of personal data being held online.

The more social media-conscious 16-24 age group is understandably concerned with how their data might be shared on the social media platforms, particularly where they don’t want it shared widely.

% Agree Total Age Age Age 2 RegionMale Female 16-24 25-34 35-49 50-64 64+ 16-49 50+ Dublin Outside

DublinAll

LeinsterLeinster

Ex DublinMunster Conn/

Ulster

Base: 1013 488 525 139 212 299 215 148 650 363 280 733 536 256 300 177

% % % % % % % % % % % % % % % %

Data privacy in general is an area that increasingly concerns me

65 61 68 69 66 73 61 48 70 55 61 66 64 67 66 64

I am concerned about online companies sharing my data with other organisations

62 63 62 68 64 74 57 39 69 49 62 63 60 58 68 63

I am concerned about the amount of my personal data held online nowadays

62 62 62 67 64 72 58 42 68 51 58 64 60 62 66 63

I often worry that someone will share something about me on social media that I don’t want shared e.g., information, an image etc.

46 43 49 64 54 53 35 22 55 29 37 50 41 46 53 51

I feel I still have control of my personal data

45 43 47 58 49 48 37 31 51 34 45 45 45 45 54 34

I often worry that I’ll lose the photos I have on my devices because I haven’t backed them up anywhere

42 38 47 60 49 50 32 15 52 25 40 43 39 38 49 42

Figure 23: Data privacy concerns of Irish internet users. Source: eir Connected Living survey, 2015

A new concern developing is whether or not photos stored on various devices are backed up, should a device fail.

35

TRUST AND DISPUTE RESOLUTION

Utilising local trust marks can be a way of encouraging that first transaction; reassuring consumers that if something goes wrong there is someone who will help to rectify the situation. It is important to select the scheme that suits the products and business of the merchant. There may also be legal requirements in certain territories about which programs a merchant must be part of.

Early in 2016, the EC took the Online Dispute Resolution platform live. This system isn’t in itself a resolution system but rather a signpost for cross-border consumers to find a resolution service in the home territory of the merchant (assuming they are based, or have an office, in the EU). The services, called Alternative Dispute Resolution (ADR), aren’t necessarily trust marks but can act as intermediaries where a customer and merchant can’t agree on remedial action.

www.webgate.ec.europa.eu/odr

Approved ADR in Ireland: The Direct Selling Association of Ireland

Web: www.dsai.ie

ECC-Net

ECC-Net is an EU-wide network aimed at providing consumer advice on a range of issues. They are part funded by local government and the EC.

www.eccireland.ieECC Net – European Consumer Centres Network

Competition and Consumer Protection Commission

www.ccpc.ieThe Competition and Consumer Protection Commission (CCPC) is the statutory office with responsibility for providing advice and information to consumers on their rights. In addition, the CCPC is responsible for the enforcement of a wide range of consumer protection laws. The CCPC does not intervene or become involved in individual issues or disputes between consumers and sellers of goods or service providers. The CCPC can, however, advise if someone has a particular consumer problem.

36

MARKETPLACES

The international nature of e-retail in the Republic is also reflected in the choice of marketplaces used by consumers. Amazon’s various global web estates have a presence in the top 10 marketplaces, partly reflecting the desire for choice on the part of the consumer. The presence of many of these international brands also indicates an increasing number of merchants who are using marketplaces as a vehicle for international expansion – the brand names bring a degree of instant recognition for a merchant trading into a new territory but, at the same time, then lists them in the same place as their competition. It is always worth reviewing how unique an offering is and how it would compete on the various marketplace websites before deciding which one suits the strategic objectives of the business.

LOYALTY AND VOUCHERS

Irish shoppers are just as likely to use vouchers in their shopping process as in other territories. Most of the global voucher websites have a local presence and the following data from Google Trends highlights areas of the Republic where online searches for vouchers are most prevalent; largely tying in with larger conurbations.

Town/City

100Naas

Waterford

Lucan

Leerkenny

Kilkenny

Tralee

Galway

89

88

81

78

71

66

Figure 24: Hotspots of shoppers looking for vouchers online. Source: Google Trends, April 2016.

1. Amazon.co.uk2. Amazon.com3. Ebay.co.uk4. Aliexpress.com5. Ebay.com6. Alibaba.com7. Amazon.de8. Etsy.com9. Wish.com10. Amazon.in

37

The search term ‘voucher’ returns a number of global and local voucher providers, including voucherpages.ie and groupon.ie. Related searches include gifting, pizza and retail brands such as Amazon, Argos and Lidl.

one for all

voucher codes

gi� voucher

dominos

one4all

one4all voucher

dominos voucher codes

amazon voucher

argos voucher

lidl voucher

100

85

65

35

25

25

25

15

10

10

Figure 25: Trending results for search term ‘voucher’ in Ireland. Source: Google Trends, April 2016

The variety of marketing tools mentioned here are common in many global marketplaces. Best practice employed in these other markets won’t be far off local requirements in the Republic. Social media / marketing data in the Republic shows that this is a rapidly-expanding area of interest and interaction.

A direct relationship between social media and sales is yet to be proven for many brands, but it is very useful for smaller brands, building relationships and listening to what Irish consumers think about products and services; especially on mobile.

The 15-18 age group is by-far the most digital and as these come into their own spending power, global businesses will be well-placed to trade with them.

38

LEGAL FRAMEWORK & REGULATION

Key legislation

The following tables contains some key legislation to consider before you begin trading into the Republic. Please note that the table is not an exhaustive list and that it is limited to the legislation that applies in the Republic unless otherwise stated.

The reader should also note that while there are key differences between the legal structures in the Republic and Northern Ireland, there are also many similarities, particularly where EU-derived legislation is in place. It is suggested that the reader consult the UK passport, which can be found at www.ecommerceworldwide.com, to better understand the overall picture. Northern Ireland is part of the UK and as such falls under the UK legislative process, although there are some local differences due to devolved government.

Disclaimer

This section of the eCommerce Worldwide Ireland Passport is provided for general information only and does not constitute legal or other professional advice. eCommerce Worldwide doesn’t owe any duty of care to any reader of this section of the passport document. You should consult a suitably-qualified lawyer on any specific legal problem or matter.

39

Topic Area Relevant Regulations Purpose

Privacy and Data Protection a) Data Protection (Amendment) Act 2003 (passed).

Amended the Data Protection Act (1988) to implement the European Data Protection Directive 95/46/EC

Data protection in the Republic of Ireland is regulated and enforced by the Office of the Data Protection Commissioner (DPC).

www.dataprotection.ie

To regulate the processing of personal data by businesses and other organisations.

Effects

All organisations that are responsible for processing personal data (data controllers) have to comply with eight data protection principles set out in the DPA.

Personal data is information relating to a living individual who can be identified from that information or from that information and other information in the data controller’s possession, or from other information that is likely to come into the data controller’s possession – essentially, it is information about a living identifiable individual and includes a person’s name, address, contact details and bank details. Personal data also includes any expression of opinion about the individual and any indication of the data controller’s intentions or any other person’s intentions in respect of the individual.

In summary the eight data protection principles require that:

1. personal data must be processed fairly and lawfully;

2. personal data must be obtained only for one or more specified and lawful purposes, and should not be processed in any manner incompatible with that purpose or those purposes;

3. personal data should be adequate, relevant and not excessive in relation to the purpose or purposes for which they are processed;

4. personal data should be accurate and, where necessary, kept up to date;

5. personal data processed for any purpose or purposes should not be kept for longer than is necessary for that purpose or those purposes;

6. personal data should be processed in accordance with the rights of data subjects under the DPA;

7. appropriate technical and organisational security measures should be taken against unauthorised or unlawful processing of personal data and against accidental loss or destruction of, or damage to, personal data; and

8. personal data should not be transferred to a country or territory outside the European Economic Area unless that country or territory ensures an adequate level of protection for personal data or an exemption applies.

There is stronger legal protection for “sensitive personal data”. Sensitive personal data means personal data consisting of information about an individual’s racial or ethnic origin, political opinions, religious or similar beliefs, trade union membership, physical or mental health or condition, sexual life, or commission of or proceedings for any offence committed or alleged to have been committed by the individual and the outcome of such proceedings.

(Source: Bond Dickinson)

Failure to comply with these obligations can result in a criminal prosecution with fines of up to €5,000 and on indictment €250,000 per offence.

A code of practice pertaining to handling data breaches is provided by the ODPC on their website

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Topic Area Relevant Regulations Purpose

Privacy and Data Protection b) British-Irish Agreement Act, 1999 – Data Protection

To regulate terms of contact and engagement between cross-border bodies

Effects

Enables the regulation of the processing of personal data by businesses and other organisations between the Republic of Ireland and Northern Ireland. The act provides for where a complaint is raised to the Office of the Data Protection Commissioner (ODPC) about a data processor / controller based in Northern Ireland. The DPC is able to pass details of the complaint to office of the Information Commissioner Northern Ireland (ICO-NI). The act also clarifies scope of regulation between the two countries.

Topic Area Relevant Regulations Purpose

Privacy and Data Protection c) The ePrivacy Regulations 2011 (S.I. 336 of 2011) deal with data protection for phone, e-mail, SMS and Internet use. Give effect to the EU e Privacy Directive 2002/58/EC (as amended by Directive 2006/24/EC and 2009/136/EC).

Regulates data protection in phone, e-mail, SMS and Internet use

Effects

If an organisation sends unsolicited (i.e. not specifically requested) electronic direct marketing communications by fax, telephone or electronic mail (including SMS) to individuals it will need to comply with the PECR. In some instances, the provisions of the PECR mean that the consent of the individual is required before they are sent a direct marketing communication. Different rules apply to different methods of communication and organisations should seek independent legal advice on the rules which will apply to their specific circumstances. Guidance is also available from the ICO.

The PECR also regulate the use of cookies (and similar technologies) by websites.

Cookies or similar devices must not be used unless the subscriber or user:

a) is provided with clear and comprehensive information about the purposes of the storage of, or access to, that information; and

b) has given his or her consent.

The PECR specify that organisations do not have to provide the information and obtain consent where that cookie or other device is to be used:

a) for the sole purpose of carrying out or facilitating the transmission of a communication over an electronic communications network; or

b) where such storage or access is strictly necessary to provide an information society service requested by the subscriber or user.

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Topic Area Relevant Regulations Purpose

Privacy and Data Protection European General Data Protection Regulation (EGDPR) – Replacing European Data Protection Directive (Directive 95/46/EC)

Harmonise data protection rules and update them to reflect changing uses and technologies

Effects

The regulation is expected to be approved by the Council of Ministers in mid-July and come into force across the EU around 2 years from that point. Key areas of change include: easier access to data subjects own data; a right to data portability; a “right to be forgotten”; the right for data subjects to be notified when their data has been ‘hacked’; businesses will only have to deal with one single supervisory authority; any business trading into an EU country will have to apply by EU data protection rules; Data protection by design; Privacy-friendly techniques such as pseudonomysation and for some businesses the requirement for a Data Protection Officer.

Rules around data protection in the Republic are based around the various directives and regulations of the European Union and are related to trade, commerce and consumers within the EU 28. Businesses that wish to trade into Ireland, or any other of the EU 28 must abide by these rules. To assist with this activity, there are a number of Memorandums of Understanding (MOU’s) that have been shared between the ODPC and various international governments, including:

• Australia

• Canada

• US

In the case of the US, a program called ‘Safe Harbor’ enabled businesses in the EU and US transfer consumer data on the basis of accepted norms of how this data is processed and protected. However, in 2015 this view was challenged in an Irish court and upheld by the European Courts of Justice. As a result, Safe Harbor has been called into question and is currently being replaced by Privacy Shield. There are some doubts as to whether this answers the concerns of the ECJ and business should seek legal advice to better understand their roles and responsibilities in this environment.

Topic Area Relevant Regulations Purpose

Consumer Protection Consumer Protection Act 2007; Competition and Consumer Protection Act 2014

Updated old consumer protection rules, established the National Consumer Agency and enacted EU DIRECTIVE 2005/29/EC unfair business-to-consumer commercial practices

Effects

Provided updated consumer protection regulations and implemented the EU Unfair Commercial Practices Directive (2005). Areas covered include unfair commercial practices; Price display regulations; limited price controls in emergencies; codes of practice and enforcement mechanisms. The Act was updated in 2014 to enable the formation of the Competition and Consumer Protection Commission (CCPC) as an independent body

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Topic Area Relevant Regulations Purpose

Consumer Protection Consumer Protection Act 2007 and amended 2014: Unfair commercial practices

To ensure that consumers are protected and have mechanisms for redress against businesses that employ sales practices that mislead, coerce or aggressively pursue customers.

Effects

To restrict commercial practices that fail two tests:

1. They are unfair, misleading or aggressive

2. They are likely to distort consumer choice

The act also refreshes existing legislation around misleading practices:

Products: Where they don’t perform as would be expected

Marketing and advertising: must be honest, truthful and fair

Codes of practice: Enables the enforcement of breaches of official codes, for example around advertising, where they have been approved by the CPCC

Omission of information: where a merchant hides information that could inform a consumers purchasing decision

Unclear information: where information about a product or contract makes it difficult for a consumer to understand and therefore make informed decisions.

Payments: where two or more payment methods are offered, charges for accepting these must be uniform and clearly communicated.

Topic Area Relevant Regulations Purpose

Consumer Protection Sale of Goods and Supply of Services Act, 1980 & Sale of Goods Act 1893

Provide consumers with legal surety around products purchased

Effects

Consumer contracts are protected by the Sale of Goods and Supply of Services Act, 1980. This Act provides the purchaser of goods with a number of rights, including:

• Goods must be of merchantable quality, reflecting expected use and price

• Goods must be fit for their expected purpose

• Goods must be as described - the buyer must not be misled into buying something by the description of goods or services given orally by a salesperson or an advertisement.

Goods purchased in a sale/promotion attract the same rights for the purchaser as those bought at full price.

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Topic Area Relevant Regulations Purpose

Consumer Protection Consumer Rights Directive (CRD) 2011/83/EC on Consumer Rights

Provide consumers and merchants with legal surety around distance selling

Effects

The CRD was introduced by the European Union so as to harmonise distance selling across the EU 28 and thereby encouraging cross-border sales, particularly via digital channels. Key elements include:

The “cooling off” or right of withdrawal period harmonised at 14 days from the day the consumer receives the item. A full refund is due except for the direct cost of returning the item to the seller.

Pre-ticked boxes are not allowed. For example, where additional cables could be used with a television, these cannot be already selected by default; the consumer must actively add them to their order.

Merchants must make clear all associated costs with the order before the consumer confirms acceptance of the contract. For example, delivery charges, insurances and optional extras should all be highlighted on an order summary before the consumer makes payment.

Refunds must now be made within 14 days from date of with drawl rather than the previous 30. There are also requirements for the consumer to return the product within 14 days and for the merchant to withhold the refund until products are received back. The refund must contain the cost of the original delivery.

Topic Area Relevant Regulations Purpose

Consumer Protection EC (Requirements to Indicate Product Prices) Regulations 2002 and Orders made under the Prices Act 1958 to 1972; Consumer Protection Act 2007 (pdf).

To ensure that consumers have access to clear pricing

Effects

The EC (Requirements to Indicate Product Prices) Regulations 2002 are aimed at enabling consumers to see the price of the product before buying and to make price comparisons. Under the EC (Requirements to Indicate Product Prices) Regulations 2002, retailers must show the correct selling price in euro including taxes. Unit prices for products sold by weight volume or measure must also be clearly displayed.

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Topic Area Relevant Regulations Purpose

Consumer Protection European Communities (Unfair Terms in Consumer Contracts) Regulations enacting Unfair Contract Terms Directive, 1993/13/EEC and updated by S.I. No. 27 of 1995 as amended by the European Communities (Unfair Terms in Consumer Contracts) (Amendment) Regulations 2000; S.I. No. 307 of 2000 and amended by the European Communities (Unfair Terms in Consumer Contracts) (Amendment) Regulations 2013, S.I. 160 of 2013 Unfair Contract Terms Directive, 1993/13/EEC

To ensure that consumers are protected and have mechanisms for redress against businesses that employ contracts that contain unfair terms.

Effects

These regulations allow for remedial action if T&C’s are found to be unfair. They apply to most contracts on ecommerce websites including where the T&C’s are standard across the whole website and aren’t individually negotiated with each customer. Customers won’t be bound by these unfair terms and the Competition and Consumer Protection Commission are empowered to act in situations where contracts are found to breach these requirements. The types of language used to communicate the terms can also be assessed to be unfair if it isn’t clear to a consumer what they are agreeing too.

Topic Area Relevant Regulations Purpose

Consumer Protection Consumer Protection Act 2007 and amended 2014: Consumer advertising

Ensure that advertisements don’t mislead consumers and are honest and fair.

Effects

The main legislation concerning advertisements in Ireland is the Consumer Protection Act, 2007. This Act sets out, among other things, various rules that apply to claims made about goods and services. In particular, this Act protects consumers from misleading advertisements and ensures that trade is fair. Under the Act it is an offence for an advertiser/trader to make false claims about goods, services or prices. All types of communications that promote goods or services are covered by the Act. This includes advertisements, a notice in a shop or even a claim made by a sales assistant about a product or service. EU laws also ensure that misleading advertising is forbidden in all Member States. Under SI 134/1988 (European Communities (Misleading Advertising) Regulations, 1988), any person can apply to the High Court for an order prohibiting the publication of misleading advertising.

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Topic Area Relevant Regulations Purpose

Consumer Protection ELECTRONIC COMMERCE ACT, 2000 Enacting EU Directive 2000/31/EC

Provide certainty and legal basis for trade and commerce conducted via electronic means

Effects

The ecommerce Act 2000 enables businesses to trade via websites and email with consumers by providing legal basis for electronic communications about contracts; use of digital signatures to form contracts and enabling organisations to offer products and service for sale. For certain professions, the Act also allows for advanced digital signatures (software; certificates and encryption) as required by some professional bodies.

Topic Area Relevant Regulations Purpose

Consumer Protection S.I. No. 68/2003 - European Communities (Directive 2000/31/Ec) Regulations 2003 enacting Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees

Provide clarity around remedies and replacements where goods do not meet expected standards

Effects

Where goods don’t meet expectations, due to issues such as damage, product failure or goods not being as described, the merchant will be expected to remedy the situation via repair, refund/partial refund or replacement. Where appropriate, the regulations also lay out requirements of guarantees and how they should be enforced. This regulation doesn’t preclude a consumer adopting the laws of the traders’ home market should this not be in the EU.

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Topic Area Relevant Regulations Purpose

Consumer Protection European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013 (SI 484/2013) with effect from 13 June 2014 enacting European Directive on consumer rights (Directive 2011/83/EU) (Consumer Rights Directive)

To ensure that online traders display certain key information about themselves, products, contract and how they should conduct business.

Effects

Consumers are entitled to have clear information about who they might be trading with online, clear information about the products and expected service around receiving the product. If the product is not too their satisfaction the merch