State of the Net issue 21 - eCommerce sociability survey, internet trends from AMAS

as locally, social media is changing consumer internet and purchasing behaviour. Site users will click on a Facebook follow or link, or share a special offer or other content on an eCommerce site with friends through email and sharing content through social media sites.

The inclusion of some social media features on eCommerce sites has several advantages, not least the integration of social media marketing activity with on-site content and promotions. However, our research highlighted that some online brands which have active Facebook and Twitter accounts do not promote their social media presence on their eCom-merce sites.

What did we score and why? The list of 100 sites was drawn up by AMAS to reflect the main commercial sectors and sites which, in our view, had built up awareness and use among Irish consumers. Sites where it is possible to transact business – be it buying an airline ticket, paying for an insurance product or other goods or services – were included. Where possible among multinational players, AMAS assessed their localised Irish sites.

The ten criteria included a number of sharing features, through Facebook, Twitter and email. They tended to be the most popular social features among the eCommerce sites reviewed. Less popular, and used only by the top scoring

sites, were the publication of customer images of products, customer tags and displaying what other site visitors have bought or viewed.

It must be recognised that some sites may have elected not to implement across all ten criteria and perhaps focus their efforts on the ones that are likely to deliver the most benefits. Some or indeed all of the 11 retailers who got scores of five each may be happy with that and perceive no value in including some of the other features.

For full details of the research, including details of the scoring for each of the sites are published on the AMAS website. www.amas.ie/research

Aileen O’Toole, Managing Director, AMAS

Many companies selling online in Ireland are not embedding social features into their websites, despite strong evidence that such features can boost eCommerce revenues and improve consumer loyalty. AMAS reviewed 100 transactional sites and scored each against ten separate social criteria.

Amazon is Ireland’s most sociable site with a score of nine, followed by HMV which scored eight and then CD Wow and Littlewoods which jointly hold third place with scores of seven. The best-ranked Irish website was sports retailer Elverys, which scored six as did Pixmania, eBay and Dabs.ie.

A fifth had no social media features at all on their sites, including some big guns such as Ryanair, Tesco and UPC. A further 42% had just between one and three of the ten social features that were scored.

Internationally, as well

Research: how sociable is Irish eCommerce?

0

1

1

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4

11

20

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17

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Num

ber o

f soci

al fe

ature

s

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10

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7

8

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No sites

Num

ber of sites

+10 =

+14 =

+6 =

+16 =

Facebook like, follow or share

Twitter tweet or follow

Email to a friend

Share and follow links

Product reviews by customers

Wish list or registry

What others are viewing or bought

Facebook store

Customer tags

Customer images of product

+17 =

+9 =

+1 =

10 criteria

Social features on eCommerce sites

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No sites

Num

ber of sites

+10 =

+14 =

+6 =

+16 =

Facebook like, follow or share

Twitter tweet or follow

Email to a friend

Share and follow links

Product reviews by customers

Wish list or registry

What others are viewing or bought

Facebook store

Customer tags

Customer images of product

+17 =

+9 =

+1 =

10 criteria

© AMAS graphic (www.amas.ie)

Source: AMAS review of 100 websites, May 2011. Each site was evaluated on ten criteria.

Left-hand axis – number of social features in use by the eCommerce sites analysed

Right-hand axis – number of sites which

had the number of social features

State of the Netessential eBusiness intelligence for Irish managers

A quarterly bulletin on online activity in Ireland ISSN: 1649

Compiled by AMAS in association with the Irish Internet Association

w w w . a m a s . i e

issue 21 Summer 2011

Paid forsearch

75%

16%

7%2%

W

ork P

C

Smartphone Tablet Home PC / Laptop

Demand for broadband and online services continues to remain strong, despite the slump in Irish consumer spending. Over the course of 2010, more than 140,000 new broadband subscriptions were logged by ComReg, bringing the grand total to 1.59 million. The latest statistics, for the final quarter of 2010, show that cable eclipsed mobile to show the strongest growth levels across all broadband platforms – cable grew by 34% over the course of the year to 203,000, compared with mobile’s increase of 27% to 572,000.

Ireland continues to lag behind the EU in terms of broadband penetration rates. The latest Eurostat figures put the EU27 average at 25.6% but Ireland comes in at 22.9% while UK is 30.6%. The Government’s rural broadband scheme is designed to help close this gap and deliver universal broadband access by the end of 2012.

2. Broadband

Source: ComReg Irish Communications Market: Key Data Report - Q4 2010.Graph shows broadband subscriptions across all platforms.

1. Internet use

Source: REDCDe-coding digital trends in Ireland 2011, Online survey of 500 adults aged 18+

Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10

1,000,000

1,100,000992,000

1,055,000

1,200,000

1,300,000

1,125,000

1,200,255

1,272,166

1,305,0351,400,000

1,361,254

1,500,000

1,600,000

1,509,934

1,443,350

1,518,349

1,548,625

1,591,8031,700,000

Broadband growth

Time spent online, by internet access

device

TV 2hrs 49m

Online 2hrs 44m

Radio 2hrs

Print 0hrs 37m

Average time spent on media per day


More time is being spent by Irish consumers online, to such an extent that it is causing huge shifts in media behaviour. New research shows that typically as much time is being spent every day online as watching TV, the result of greater internet use driven largely by the growth in social media. However, as market researcher REDC argues, one medium is not necessarily replacing another – online media consumption often complements other media.

More of the time people are spending on the internet is via a smartphone. The current level of 7% is predicted by REDC to grow to 10-12% within a year. So what are people doing online? Most popular daily activities are reading and watching the news (55% of the sample), followed by browsing postings (32%), posting messages (24%) and watching movies, video or TV online (19%).



Top Trends

the opportunity to win online

3. eCommerce

Maybe it’s the recession. Or maybe it’s our relatively low online adoption levels in Ireland compared with the UK and other EU markets. Either way, the number of Irish consumers who bought or ordered goods or services online is stuck at 36%, the same level as two years ago. By comparison, online ordering or buying among UK consumers grew from 57% to 67% over the same period while the EU27 average went from 32% to 40%.

Some interesting trends emerge when categories are analysed. For travel and hotel accommodation, there has been significant growth in online purchasing among

Irish consumers, from 21% to 28% over the 2 year period. The same is true for tickets, which has increased from 12% to 22%. In both categories, Ireland is ahead of the EU average but still lagging behind the UK.

Incidences of online purchasing in Ireland lagged behind other markets across all age groups, with the differences between Ireland and the UK most pronounced in 45+ age brackets. For instance, 58% of UK consumers aged between 55 and 64 had bought online, compared with only 18% for Irish consumers in the same age group.

Source: Eurostat, 2010, respondents asked if they have bought or ordered goods or services for their own use over the past 12 months

EU 27

UK

Ireland

Any goods or services

40 21 19 15 14 14 13 10

67 37 35 28 29 24 32 17

36 28 13 12 6 22 10 10

Travel & holidayaccommodation

Clothes & sports goods

Books, magazines& e-learning

Householdgoods

Tickets for events

Music & Film

Electronic equipment

Bought or ordered goods services online by category %

25-34 35-4416-24

EU 27

UK

Ireland

55-64 65-7445-54

80%

70%

60%

50%

40%

30%

20%

10%

0%

23%

50

74

38

5552

79

4945

78

40

33

70

27

18

58

14

32

8

Bought or ordered goods or services online in the past 12 months by age

Separately, Visa Europe has put a value on Irish eCommerce activity of €2.96 billion in 2010, an increase of 39% on the previous year, based on research from iReach. Value for money was the

primary consumer motivation for buying online, with half of the 1,000 survey respondents stating that they believe eCommerce can achieve savings of between 11% and 30%.

471,000

Worldwide 100 million

India9.7m

UK6.4m

Other 36.3m

Ireland 1.94m

Worldwide 500 million

India25.7m

UK29.8m

Other 288m

Ireland

USA155m

USA47.1m

4. Social mediaThe numbers of Facebook and LinkedIn users in Ireland keep getting bigger. Facebook has 1.94 million Irish accounts, almost five times what it had in January 2009. However, the number of Facebook accounts is not the same as the number

of active users, due to multiple or dormant accounts.

A third of Irish account holders say they are aged 35 or older. The number of Irish LinkedIn accounts is also growing and is within a whisker of half a million.

Source: Facebook and LinkedIn, May 2011

Number ofaccountholders

Source: As above




www.amas.ie

£4.097bn€110mUKIreland

23% Display

18% Classified

57%Paid forsearch

1% Other

44%Paid forsearch

31%Display 25% Classified5. Digital advertising

Source: 2010 IAB/UK IrelandPwC Adspend Study, survey of 26 online properties, advertising networks and sales houses

Digital media mix 2010: Ireland vs UK

Source: IAB UK/ PwC Online AdSpend Study 2010Adds to 99% due to rounding

From paid search and online classifieds to ads on games and website sponsorships, digital advertising continues to win favour with advertisers keen to extract maximum value for their hard-earned budgets. The availability of better research is also giving advertisers and their media planners the ammunition and the confidence to switch from traditional to digital channels.

The IAB Ireland/PwC research uses an internationally accepted methodology to assess the scale of the Irish digital advertising market. It puts a value of €110 million on the Irish digital advertising market in 2010, a 13.5% increase on the previous year when the overall advertising market is reckoned to have contracted by at least 7%. Digital is now estimated to equate to about a 15% share of the total Irish advertising market.

Equivalent research in the UK shows the extent of the opportunity for digital publishers, giants like Google and MSN and a host of other players in growing the Irish

digital marketplace. Valued at slightly more than £4 billion, the UK market commanded a 25% share of the advertising market, up from 23% the previous year.

6. MobileSmartphone penetration in Ireland is currently at 37%, with strong adoption among males (45%) compared with females (29%), according to new research from Amárach. Smartphones are most popular among 25 to 34-year-olds, where the penetration level is 53%. On average, a smartphone owner downloads 4.8 apps per month and, as the table shows, social networking apps are the most used.

Amárach is predicting that the acceleration in smartphone use will stimulate demand for mobile commerce in Ireland - and forecasts that €800 million worth of transactions will be conducted through mobile devices in 2012. Already mobile commerce has taken off internationally, and often for some unlikely product categories.

Source: Amárach Research, The Smart Future, online survey of 844 Irish mobile phone users in May 2011, including 311 smartphone users

Most used smartphone apps

App

Social networking 56% • Strong female bias

• Higher among 15-24s

Maps/travel 41% • Stronger male bias


News 37% • Stronger male bias


Music 34% • Stronger male bias


Gaming 28% • Slight male bias


Reach User profile



Top Trends

The skills shortage is the greatest impediment to business growth in Ireland’s digital sector right now, and we need to reach a critical mass in these skills right across the sector, from developers and designers to digital marketers and SEO specialists.

The Irish Internet Association has made a submission to government requesting a digital skills tax credit

programme to incentivise the digitally skilled to take up positions in Ireland. We have counselled the opinion of leading international and indigenous businesses and leading economist Constantin Gurdgiev, and all have unanimously endorsed the proposal and are committed to supporting it.

For our digital economy to continue to flourish we need to build a reservoir of talent. People follow jobs but the job creators set up camp where they have a deep well of talent from which to draw. With so many other countries competing for the mantle of the smartest economy, we need to be smart about how we attract people to work here.

Proposals for a so-called “nerd visa” don’t go far enough. It is not a question of managing those who can come to work in Ireland but rather a question of stemming the flow of emigration of “smart skills” and incentivising positive repatriation of those who have left.

‘Open data’ policyAt the IIA we also recognise the importance of an “open data” policy to support our start-up community, by giving them access to this invaluable raw material. Open data will also boost eGovernment initiatives and services to citizens. For this year’s “Open For Business” conference at the Aviva Stadium we took the term literally, facilitating

a dialogue between the developers and consumers of technology.

We are continuing to keep apace with the demand for the Diploma in Digital Marketing, reviewing the curriculum constantly to reflect the pace of change. We have moved the NetVisionary Awards to September and have reviewed the categories to reflect the newcomers to our sector.

On 14-15 October we will be co-hosting “Internet Expo” in the RDS, Ireland’s first trade exhibition and conference dedicated to internet business across a wide range of sectors, from animation and gaming to eLearning. Visit www.iia.ie for more details.

Tax credits to tackle digital skills shortages

Joan Mulvihill CEO, Irish Internet Association

More solid evidence that online adoption levels are low among Irish SMEs. On this occasion, though, the research has a positive sting in its tail, in the shape of an impressive initiative designed to transform how small businesses and sole traders use the internet.

Google commissioned Ipsos MORI to establish the online status of a statistically representative sample of Irish SMEs, defined as companies with fewer than 50 employees. The results are stark – 40% don’t have a website, 58% don’t have an entry in an online directory and 81% don’t have a page on a social network site.

Why no website? 57% of those who don’t have websites said they have never considered having one but a further 23% indicated that they were in the process of establishing one. A fifth of the same group are unconvinced of the benefits in terms of communicating with customers or increasing sales.

7. Businesses online

Source: Google SME Insights Ireland, Conducted by Ipsos MORI via telephone in November 2010, 821 companies surveyed which were representative of commercial Irish SMEs based on employee size and sector

0 10 20 30 40 50 60

%

60

42

26

19

6

3

Website

Online business directory

None of these

Page in social network

Blog

Do not have internet

Channel adoption levels


Cost is another issue: 17% believe websites are too expensive, while 33% have concerns about the time involved in maintaining websites.

The research was commissioned ahead of the launch of Getting Irish Business Online, an initiative which offers free websites and hosting to

Irish SMEs. It is a partnership between Google, Blacknight Solutions, An Post and the City and County Enterprise Boards, and aims to take some of the mystique out of the internet for many small businesses. The ambition is to get 25,000 more Irish SMEs and sole traders online in year one. Visit www.GettingBusinessOnline.ie

© AMAS Ltd.Published by AMAS Ltd., 38 Lr. Leeson Street, Dublin 2, Ireland. Tel: +353 1 6610499

Email: [email protected] Web: www.amas.ie

It’s phenomenal - the explosive growth in discount coupon, deal and group -buying sites. Deals sites have taken Ireland by storm over the past year.

There are now at least 25 operating here, with new market entrants regularly appearing. Facebook Deals has beta-launched already in Ireland, and Google is piloting Offers in the US, so expect online deals to continue to boom.

The larger sites are transacting serious amounts of business in Ireland as recession-hit consumers search for bargains and this is affecting the dynamics of some business sectors.

It’s hard to miss this phenomenon. Online ads for these sites promiselarge discounts - typically 50% to 60% - on meals, health and beautytreatments, gadgets, tickets and all sorts of consumer desirables.

CloutA survey by media agency Carat

found high levels (up to half of those surveyed) were aware of, had signed up or purchased from each of the three largest sites, City Deal, Living Social and Boards Deals. The purchase rates reported were very high - 17%, 6% and 5% respectively.

With these levels, the deals sites have massive market-place clout, which canhave positive and negative

implications for the businesses that provide their deals. The upside for businesses is high-profile exposure and an opportunity to attract new customers and stem falling sales.

DownsideOn the downside, the business will be selling the promoted deal at a level that is often unprofitable when the discount and commission to the deals site are deducted. It is vital for the business to scope the offer carefully or it may be overwhelmed with demand for the cut-price deal.

Businesses may have to wait for the cash as some deals sites do not pay up until the consumer redeems the coupon.

Deals sites trumpet how they deliver new customers, leading to repeat business. But many traders fear that deals are cannibalising existingbusiness, as customers hold off spending in expectation of

a deal coming up soon, and some complain that repeat business does not materialise.

Businesses also worry that deals devalue their offerings, if consumers decide that the deal price is the real price.

So businesses need to weigh their options and be smart. As their own consumers are advised, they need to shop around, choose carefully, drive a hard bargain and see where deals fit best with their business models.

Deals explosion brings mixed blessings for businesses

AMAS: what we doAMAS is an internet consultancy with a simple goal – help our clients to exploit the internet. Large corporates, government bodies and, increasingly, high-potential businesses retain us to develop and help implement internet strategies.

We cut through the clutter and the complexity to allow our clients to capitalise on the unlimited opportunities offered by the internet.

Services:• Strategy• Research• User experience• Content• Training • Marketing• Project management

Fiachra Ó MarcaighDirector, AMAS

eCommerce excellence is to be recognised later this year in a new award scheme and quality mark launched by Retail Excellence Ireland (REI) with sponsorship from Google. REI is extending its long-established retail awards to include eCommerce, and businesses meeting the required standard will be eligible to use a new quality mark on their sites.

There will be three category winners, for best customer experience, innovation and exporting, who will then be

eligible for consideration for the overall eCommerce Website of the Year award. The winner will receive a marketing package worth €20,000 from Independent Newspapers.

AMAS has been selected by REI to conduct reviews of the sites as part of a three-stage evaluation process. AMAS has designed this process to complement the

one used for REI’s traditional retail award scheme, as well as checkpoints in eCommerce best practice. Visit AMAS’s blog for more details www.amas.ie/blog.

Follow us:For digital research and insights, follow AMAS on Twitter@AMASinternet

Contact Us: Aileen O’Toole, Managing Director on +353 1 6610499 or [email protected]

State of the Net issue 21 - eCommerce sociability survey, internet trends from AMAS

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Transcript of State of the Net issue 21 - eCommerce sociability survey, internet trends from AMAS