Online focus vital for growth

He says research shows that people are becoming increasingly value conscious as a result of the credit crunch and are choosing to go online to both inform their purchasing decisions and to look for the best value available. The result is that they either purchase online or decide what they’re going to buy and where before visiting offline shops.

“We feel there’s a big opportunity for businesses to go out and really capitalise on the shift of people into the online arena,” he says. “This is particularly true within the Irish market, where we are behind other major European markets by a significant margin in terms of online commerce and in terms of the presence of some of the key brands and the key companies online. It’s not set up in a way that’s really harnessing the opportunity for them.”

Harris believes that the best companies differentiate themselves during a downturn and cites Apple and Ryanair as prime examples. “Apple came out in 2001 when the world was falling apart the last time and released another MP3 player and everyone thought they were mad,” he says. “But they felt that there was an opportunity to go out and invest heavily in something and create a competitive advantage. Here they are seven years later and they’ve not only gone through 15 iterations of their iPod but they’ve also sold over two billion songs on iTunes.”

Ryanair, meanwhile, struck what it described ‘a fabulous deal’ for 100 Boeing 737s just months after 9/11. “As the market started to rise, he [Michael O’Leary] had a brand new fleet of aircraft at rock-bottom prices and was in a phenomenal position to compete in the European market and we’ve all seen the success that he’s had over the past few years.

“That’s the opportunity that’s there. The big difference this time around is that the economy is now digital. Consumers are going to go online, businesses are going to go online and they’re going to do all the research and make all their purchasing decisions there and that’s where companies need to be if they’re to capture that relationship.”

But many Irish companies are currently behind when it comes to developing their online presence, he says. “If you look at the UK, pretty much all of the large brands have strong online presences,” he says. And he points out that in that market, many companies are reporting double-digit growth year-on-year in their online trade. “The evidence is showing that even the biggest brands are getting a lot of traction and a huge amount of growth from their online presence.

“When I look at the Irish landscape, a lot of key brands have either no online presence or have what I would call brochure-ware. That’s missing the point. When consumers go online they’re forming an opinion about a brand. When consumers go to a website and the brand is not presenting itself in the same fashion and to the same extent as it does in the offline world, then it’s missing a big opportunity. All big businesses invest millions in developing a presence so that when somebody walks through the door of their business or their shop they form an impression about the business and about the brand – it draws them in and entices them to form a relationship with that brand and ultimately make a purchase. Unless the investment is put into the online world as well, to create that same impression, they’re going to lose the opportunity to build a relationship with those consumers.”

That Irish companies have been slow to develop online has a lot to do with the fact that the market itself has been coming from behind in terms of internet adoption and broadband penetration, says Harris. He points out that companies were generally slow to make an investment when the consumers weren’t online. “And the problem now for a medium or large business is you don’t develop an online presence overnight. So these businesses are going to be playing catch-up. Meanwhile the Irish consumer is going online, trying to do business and look for information. And they’re going to be finding that information from businesses outside of Ireland, which I think is a shame.”

Harris believes that the current economic slowdown is going to drive growth in online transactions. “The businesses that are there and who recognise that will capitalise on it and will be the ones that can stretch out a lead on their competition. I’m not saying the ones that don’t are going to fail, but they’re missing an opportunity.”