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Online Retailing - Ireland - June 2011

This report analyses the dynamics of the online retailing sector in Ireland, and assesses the factors driving and limiting growth in online shopping by Irish consumers. Being a distribution channel rather than a market in its own right, in addition to encompassing a huge range of different product and service types, there are obvious difficulties in any attempt to quantify the market for online shopping. This is further complicated by the fact that a significant proportion of online shopping by Irish consumers is conducted through overseas or offshore retailers’ online websites. Such transactions are not recorded in official statistics.

Mintel has estimated the market size based on several key factors and data sources: government statistics from NISRA and CSO, previous Mintel market size estimates (see Mintel’s How Have Irish Companies and Consumers Embraced Online Shopping? – Ireland, May 2010) and using UK market trends as a benchmark.

Some of the key definitions in this report include:

  • 3D Secure is the collective term for a security tool for online transactions developed by Visa (called Verified by Visa) and MasterCard (called MasterCard SecureCode). The security measures provide a more secure approach to credit and debit card transactions over the internet. Cardholders register their card details and secret passphrases with their card issuers for use during Internet shopping to verify their identities. This tool allows cardholders to verify themselves with Internet retailers who are not in a position to swipe the card or obtain a PIN (source: Irish Payment Services Organisation).
  • Online transactions are defined as any purchases by consumers where the act of ordering and giving payment details is completed entirely using the internet, wherever the goods are collected from or delivered to at the end of the purchase process. This therefore includes items bought online for collection from the store.
  • Online shopping is, in simple terms, the process whereby consumers purchase products, goods or services over the internet.
  • Pure play retailers are those retailers that trade exclusively online. The pure play retailers mentioned in this report include Amazon.com, Amazon.co.uk and Play.com. These are categorised as ‘mail order’ retailers under the UK’s Office for National Statistics classifications.
  • Multi-channel retailers are retailers that trade both online and through stores and/or catalogues, ie a multi-channel approach.
  • High street or store-based retailers are those retailers that trade exclusively through a physical store or chain of stores.

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Table of contents

  1. Issues in the Market

      • Key themes
        • Definitions
          • Data sources
            • Abbreviations
            • Insights and Opportunities

              • Established retailers well-positioned to say “trust us”
                • Site design must account for mobile shopping
                  • Encouraging older consumers to be more adventurous
                  • Market in Brief

                    • €2.3 billion spent shopping online in 2010
                      • Little cause for optimism on economic front
                        • RoI consumers have money to spend – but they’re saving it
                          • Despite downturn, credit card penetration nudges upward
                            • Increasing broadband penetration grows potential market
                              • Online shopping meets modern lifestyles’ needs
                                • Safety concerns discourage a third of all consumers
                                  • eBay and Amazon dominate online shopping sector
                                    • Most internet users now shopping online
                                      • Books, CDs and DVDs remain most popular online purchases
                                        • Attitudes towards online shopping positive – but delivery fees unpopular
                                          • Attitudes towards online grocery shopping quite positive
                                            • Biggest consumer groups in NI and RoI are inactive online shoppers
                                            • Fast Forward Trends

                                                • Trend 1: Green Technology
                                                  • What’s it about?
                                                    • What we’ve seen
                                                      • What next?
                                                        • Trend 2: Patriot Games
                                                          • What’s it about?
                                                            • What we’ve seen
                                                              • What next?
                                                              • Internal Market Environment

                                                                • Key points
                                                                  • More than a third ‘really enjoy’ shopping
                                                                    • Figure 1: Agreement with statement ‘I really enjoy any kind of shopping’, by age and gender, NI & RoI, 2010
                                                                  • Online a perfect fit for time-stressed consumers
                                                                    • Figure 2: Agreement with statement ‘There are not enough hours in the day to do everything I would like’, by age and gender, NI & RoI, 2010
                                                                  • But online ‘message’ not getting through
                                                                    • Figure 3: Agreement with statement ‘To do my shopping by internet makes my life easier’, by age and gender, NI & RoI, 2010
                                                                  • A third of consumers put off by safety concerns
                                                                    • Figure 4: Agreement with statement ‘I would do my shopping by internet if there was a safe way to pay’, NI & RoI, 2003-10
                                                                    • Figure 5: Agreement with statement ‘I would do my shopping by internet if there was a safe way to pay’, by age and gender, NI & RoI, 2010
                                                                  • Losses due to online fraud fall in 2009
                                                                    • Figure 6: CNP fraud losses on UK-issued cards, £ million, 1999-2009
                                                                  • But total plastic card fraud losses increased in NI in 2009
                                                                    • Figure 7: Fraud losses on UK-issued plastic cards in the UK, 2005-09
                                                                  • eBay and Amazon the most visited retail websites
                                                                    • Figure 8: Top 25 sites (by number of visits), RoI and UK (including NI), June 2011
                                                                  • RoI consumers neglected by major online retailers
                                                                      • Figure 9: Online retail sites that feature in the top 500 most visited websites by RoI and UK (incl. NI) consumers, June 2011
                                                                    • Comparatively low online shopping participation in RoI
                                                                      • Figure 10: Have purchased or ordered goods or services online, by category, in last 12 months, EU27, UK (including NI) & RoI, 2010
                                                                    • Online retailers not keeping up with web developments
                                                                    • Broader Market Environment

                                                                      • Key points
                                                                        • Economic outlook remains bleak
                                                                          • Figure 11: Economic outlook, RoI and NI, 2008-10
                                                                        • Confidence improves, but remains low
                                                                          • Figure 12: Consumer Sentiment/Confidence Index,UK (Inc NI) and RoI, May 2010-July/August 2011
                                                                        • RoI
                                                                          • UK (including NI)
                                                                            • Irish incomes down – but still above average
                                                                              • Figure 13: Gross Domestic Product (GDP) per capita expressed in Purchasing Power Standards, selected EU states, 2010
                                                                            • RoI consumers prioritising saving over spending
                                                                              • Figure 14: Savings Index, RoI, May 2010-May 2011
                                                                              • Figure 15: Preference for spare funds, RoI, April & May 2011
                                                                              • Figure 16: Reason for saving among consumers who save regularly, RoI, May 2011
                                                                              • Figure 17: Average amount saved per month by consumers who save, April 2011-May 2011
                                                                            • Credit card penetration increases despite downturn
                                                                              • Figure 18: Credit card/Charge card ownership, NI & RoI, 2009-10
                                                                            • Growing broadband penetration opens online market
                                                                              • Figure 19: Consumers with a broadband connection at home, NI & RoI, 2005-10
                                                                              • Figure 20: Consumers who have used internet (any connection type) in the last 12 months, RoI and NI, 2010
                                                                            • Faster connections further facilitate online shopping
                                                                              • Going online through mobile phone becoming common
                                                                                • Figure 21: How consumers access the internet, NI and RoI, 2010
                                                                              • More consumers buying products through mobile phones
                                                                                • Internet competing with TV for consumers’ attention
                                                                                  • Figure 22: Average time spent on media per day, in minutes, RoI, 2011
                                                                                • Petrol prices could force consumers online
                                                                                    • Figure 23: Average price per litre (pence or cent) of reg. unleaded petrol, NI and RoI, January 2009-June 2011
                                                                                • Competitive Context

                                                                                  • Key points
                                                                                    • Online sales outperforming retail overall in UK (including NI)
                                                                                      • Figure 24: Retail sales, volume and value, annual % change, UK (incl. NI), June 2011
                                                                                    • Online growing share of overall retail sales in UK (including NI)
                                                                                      • Figure 25: Internet retail sales as percentage of total* retail sales, UK (including NI), 2007-11**
                                                                                    • RoI retail sales in freefall since start of recession
                                                                                      • Figure 26: Total retail sales (excl. motor trade), indexed, value and volume, RoI, 2005-10
                                                                                      • Figure 27: Volume of retail trade, annual % change on the same month of previous year, EU27, UK (incl. NI) & RoI, 2010/11
                                                                                      • Figure 28: Value of retail sales, annual % change, by retail business, May 2011
                                                                                    • Retail footfall data suggests NI retail sector in difficulty
                                                                                    • Strengths and Weaknesses

                                                                                      • Strengths
                                                                                        • Weaknesses
                                                                                        • Who’s Innovating?

                                                                                          • Key points
                                                                                            • Incorporating a barcode reader into iPhone app
                                                                                              • An Post rebrands and re-launches online directory
                                                                                                • Limiting the potential loss through online fraud
                                                                                                • Market Size and Forecast

                                                                                                  • Key points
                                                                                                    • Online retail sales exceeded €2.3 billion in 2010
                                                                                                      • Figure 29: Online spending, actual and estimated, RoI, NI and All-Ireland, 2007-11
                                                                                                    • But not all sectors performing well
                                                                                                      • Figure 30: Number of visits abroad by RoI residents, 000s, 2003-10
                                                                                                    • Online sales to exceed €6.5 billion by 2015
                                                                                                      • Figure 31: Online spending, projected, RoI, NI and All-Ireland, 2012-15
                                                                                                  • Companies and Products

                                                                                                      • The dominant players
                                                                                                        • Amazon
                                                                                                            • Figure 32: Visitors, by country, to Amazon.co.uk, June 2011
                                                                                                            • Figure 33: Visitors, by country to Amazon.com, June 2011
                                                                                                          • eBay
                                                                                                              • Figure 34: Visitors, by country, to eBay.ie, June 2011
                                                                                                              • Figure 35: Visitors, by country to eBay.co.uk, June 2011
                                                                                                              • Figure 36: Visitors, by country to eBay.com, June 2011
                                                                                                            • Other popular online retailers
                                                                                                              • Argos
                                                                                                                • Ticketmaster
                                                                                                                  • Littlewoods
                                                                                                                    • Pixmania
                                                                                                                      • ASOS
                                                                                                                        • Play
                                                                                                                          • Tesco
                                                                                                                            • Buy4Now
                                                                                                                              • Next
                                                                                                                                • Marks & Spencer
                                                                                                                                  • Ebuyer
                                                                                                                                    • John Lewis
                                                                                                                                      • iloveshopping
                                                                                                                                      • Frequency of Online Shopping

                                                                                                                                        • Key points
                                                                                                                                          • Majority of internet users shop online
                                                                                                                                            • Figure 37: How often consumers shop online, RoI and NI, June 2011
                                                                                                                                          • ABC1s, aged 35-49 most ‘regular’ online shoppers
                                                                                                                                            • Figure 38: Consumers with above-average tendency to ‘regularly shop online’, NI and RoI, June 2011
                                                                                                                                          • Transition from occasional to regular not certain
                                                                                                                                            • Consumers aged 16-24 ‘rarely’ or ‘never’ shop online
                                                                                                                                            • Who Buys What Online?

                                                                                                                                              • Key points
                                                                                                                                                  • Figure 39: Types of goods and services bought online, NI and RoI, June 2011
                                                                                                                                                • Women more active online shoppers
                                                                                                                                                  • Consumers with families keener online shoppers
                                                                                                                                                    • Consumers aged 35-49 more active than other age cohorts
                                                                                                                                                      • ABC1s lead online buying activity
                                                                                                                                                        • NI consumers more ‘online keen’ than RoI consumers
                                                                                                                                                          • Favourite online purchases
                                                                                                                                                            • Hard copies of books/CDs/DVDs continue to lead the way
                                                                                                                                                              • Online fashion another popular choice
                                                                                                                                                                • RoI consumers going online for travel and accommodation products
                                                                                                                                                                  • Consumers 25-49 buying entertainment tickets online
                                                                                                                                                                  • Attitudes Towards Online Shopping (General)

                                                                                                                                                                    • Key points
                                                                                                                                                                        • Figure 40: Agreement with statements relating to online shopping (general), NI & RoI, June 2011
                                                                                                                                                                      • Delivery charges the biggest turn-off
                                                                                                                                                                        • Concerns over quality discourage four in ten
                                                                                                                                                                          • Only a minority worried about online safety
                                                                                                                                                                          • Attitudes Towards Online Shopping (Grocery)

                                                                                                                                                                            • Key points
                                                                                                                                                                              • General attitudes towards online food shopping are positive
                                                                                                                                                                                • Figure 41: Agreement with statements relating to online grocery shopping, NI & RoI, June 2011
                                                                                                                                                                              • Concerns about fresh food quality on women’s minds
                                                                                                                                                                                • Students most disinclined to buy fresh food online
                                                                                                                                                                                  • C2DEs most adamant that they’ll never shop online for groceries
                                                                                                                                                                                    • Free delivery and lower prices would woo consumers
                                                                                                                                                                                      • Figure 42: Factors that encourage consumers to try/do more online food shopping, NI & RoI,
                                                                                                                                                                                    • Women, 25-34s and ABC1s want free delivery
                                                                                                                                                                                      • One in five want delivery outside of working hours
                                                                                                                                                                                        • Lower prices appeal to consumers aged 35-49
                                                                                                                                                                                          • ABC1s and 25-34s keen on online-exclusive special offers
                                                                                                                                                                                            • Consumers in employment open to friendly recommendation
                                                                                                                                                                                            • Consumer Target Groups

                                                                                                                                                                                              • Key points
                                                                                                                                                                                                • NI target groups
                                                                                                                                                                                                  • Figure 43: Consumer typologies, NI, June 2011
                                                                                                                                                                                                • Offliners
                                                                                                                                                                                                  • Freebies
                                                                                                                                                                                                    • Freshers
                                                                                                                                                                                                      • Quality Concerned
                                                                                                                                                                                                        • RoI target groups
                                                                                                                                                                                                          • Figure 44: Consumer typologies, RoI, June 2011
                                                                                                                                                                                                        • Try Buyers
                                                                                                                                                                                                          • Pricers
                                                                                                                                                                                                            • Quality Worriers
                                                                                                                                                                                                              • Free Shippers
                                                                                                                                                                                                              • Appendix

                                                                                                                                                                                                                • TGI consumer data
                                                                                                                                                                                                                  • NI
                                                                                                                                                                                                                    • Figure 45: Agreement with statements relating to shopping, by all demographics, NI, 2010
                                                                                                                                                                                                                    • Figure 46: Number of credit/debit cards owned, by all demographics, NI, 2010
                                                                                                                                                                                                                    • Figure 47: Usage of internet and connection type, by all demographics, NI, 2010
                                                                                                                                                                                                                    • Figure 48: How consumers access the internet, by all demographics, NI, 2010
                                                                                                                                                                                                                  • RoI
                                                                                                                                                                                                                    • Figure 49: Agreement with statements relating to shopping, by all demographics, RoI, 2010
                                                                                                                                                                                                                    • Figure 50: Number of credit/debit cards owned, by all demographics, RoI, 2010
                                                                                                                                                                                                                    • Figure 51: Usage of internet and connection type, by all demographics, RoI, 2010
                                                                                                                                                                                                                    • Figure 52: How consumers access the internet, by all demographics, RoI, 2010
                                                                                                                                                                                                                  • Toluna consumer data
                                                                                                                                                                                                                    • RoI
                                                                                                                                                                                                                      • Figure 53: Internet shopping habits, by demographics, RoI, June 2011
                                                                                                                                                                                                                      • Figure 54: Types of goods and services bought online, by demographics, RoI, June 2011
                                                                                                                                                                                                                      • Figure 55: Types of goods and services bought online, by demographics, RoI, June 2011
                                                                                                                                                                                                                      • Figure 56: Types of goods and services bought online, by demographics, RoI, June 2011
                                                                                                                                                                                                                      • Figure 57: Agreement with statements relating to online shopping, by demographics, RoI, June 2011
                                                                                                                                                                                                                      • Figure 58: Agreement with statements relating to online shopping, by demographics, RoI, June 2011
                                                                                                                                                                                                                      • Figure 59: Agreement with statements relating to general shopping, by demographics, RoI, June 2011
                                                                                                                                                                                                                      • Figure 60: Agreement with statements relating to general shopping, by demographics, RoI, June 2011
                                                                                                                                                                                                                    • NI
                                                                                                                                                                                                                      • Figure 61: Internet shopping habits, by demographics, NI, June 2011
                                                                                                                                                                                                                      • Figure 62: Types of goods and services bought online, by demographics, NI, June 2011
                                                                                                                                                                                                                      • Figure 63: Types of goods and services bought online, by demographics, NI, June 2011
                                                                                                                                                                                                                      • Figure 64: Types of goods and services bought online, by demographics, NI, June 2011
                                                                                                                                                                                                                      • Figure 65: Agreement with statements relating to online shopping, by demographics, NI, June 2011
                                                                                                                                                                                                                      • Figure 66: Agreement with statements relating to online shopping, by demographics, NI, June 2011
                                                                                                                                                                                                                      • Figure 67: Agreement with statements relating to general shopping, by demographics, NI, June 2011
                                                                                                                                                                                                                      • Figure 68: Agreement with statements relating to general shopping, by demographics, NI, June 2011
                                                                                                                                                                                                                    • Consumer typology data (Toluna)
                                                                                                                                                                                                                      • RoI cluster tables
                                                                                                                                                                                                                        • Figure 69: RoI consumer typologies, by demographics, RoI, June 2011
                                                                                                                                                                                                                        • Figure 70: RoI Agreement with selected statements about online shopping, by consumer types, RoI, June 2011
                                                                                                                                                                                                                        • Figure 71: Frequency of online shopping, by consumer types, RoI, June 2011
                                                                                                                                                                                                                        • Figure 72: types of goods and services bought online, by consumer types, RoI, June 2011
                                                                                                                                                                                                                      • NI cluster tables
                                                                                                                                                                                                                        • Figure 73: NI consumer types, by demographics, NI, June 2011
                                                                                                                                                                                                                        • Figure 74: NI Agreement with selected statements about online shopping, by consumer types, NI, June 2011
                                                                                                                                                                                                                        • Figure 75: Frequency of online shopping, by consumer types, NI, June 2011
                                                                                                                                                                                                                        • Figure 76: Types of items bought online, by consumer types, NI, June 2011

                                                                                                                                                                                                                    Companies Covered

                                                                                                                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                                    Online Retailing - Ireland - June 2011

                                                                                                                                                                                                                    £1,095.00 (Excl.Tax)