WITH THE IRISH government warning a no-deal Brexit could push up the price of online shopping and inbound deliveries from the likes of Asos and Boohoo, there may be a silver lining for Irish retailers.
While Irish business might have an opportunity to gain back some market share, retail industry experts added that it won’t be easy.
According to David Curtin, the chief executive of IE Domain Registry, import tariffs and customs on UK goods bought online from the UK presents a huge opportunity for small to medium enterprises (SME).
Irish citizens spend around €12 billion a year online, with 60% of that going to international retailers and in particular the UK.
Curtin said SMEs that sell locally could offer a click-and-collect service to generate sales and footfall in store to win back sales.
“Consumers that buy online from these Irish SMEs can continue to avail of speedy delivery times and free return services that the UK’s exit from the digital single market will take away,” he said.
However, as it stands, Curtin said that few Irish businesses are taking the opportunity of going online.
The latest IE Domain Registry Digital Health Index showed that less than a third of all SMEs can take sale orders through their website, while fewer can process sales online.
According to Thomas Burke, the director of Retail Ireland, tariffs and customs tax on UK goods present a good opportunity for Irish retailers who are operating online to fill any gap that becomes available.
However, he added that there could be a challenge in terms of the sterling-euro exchange rate. According to Burke, if the exchange rate heads towards parity then the devaluation of sterling would mean that the price of sourcing goods from the UK would fall.
He added that Retail Ireland has seen “a real upping of the game” of Irish retailers in the last 12 to 18 months in the online space and Irish consumers increasingly choosing to shop these sites.
David Fitzsimons, the group chief executive of Retail Excellence, told Fora that he agrees there are opportunities for Irish retailers to take advantage of online sales. However, it’s not going to be easy, particularly in fashion, he added.
“The majority of Irish merchants who sell branded items source them in the UK and tariffs will be applied at a wholesale level there,” Fitzsimons said.
Some global brand agencies who distribute to Ireland often also bundle the clothes in with their UK deliveries, Fitzsimons said. This means Irish merchants would have to buy from a UK-based agent and pay tariffs on the goods – cancelling the price difference.
Fitzsimons said that it is a good idea to get online and added that retailers should look towards selling to the EU market which is worth €300 billion per year.
“There is big opportunity to carve out a bit of geography in Frankfurt or Dusseldorf market – have a local partner and sell into those markets where the population is vast,” he said.