Net surfers set to spend €330m on internet goods this year

IRISH net surfers will spend 330m on goods and services bought over the internet this year, experts predict.

Looking at the future of e-retailing, Amárach Consulting director Michael McLoughlin said the level of online spending is set to grow by almost one third this year growth worth about 80m to web-based retailers.

Mr McLoughlin described Irish internet usage as a retailer's dream because they represent the cream of the retail crop: young, educated, technology-literate, prosperous and geographically dispersed.

He said there was an army of highly computer-literate 12-14-year olds who were ready to purchase online when their credit card status caught up with their ability to buy on the net. He said this was the ultimate insurance policy for any retailer concerned about the future of web-based spending.

Last year, it was estimated 38% of adults had internet access, or about 1,065,000 people, which was an increase of 5% on 2001 figures.

"We forecast that an additional 5% of Irish adults will go online within the next 12 months and that by mid-2004 almost half the adult population will be internet users," senior consultant at Amárach Bettina MacCarvill said.

In international terms, internet penetration in Ireland is similar to that of Britain, but lags someway behind the US where internet usage is more than 60%. This means there is plenty of room for expansion of web-based sales among Irish users of the net.

An estimated 188,000 internet users made an online purchase in the last three months of 2002, spending an average of 328 on their purchases.

"Crudely extrapolating this for the year, the total amount spent by Irish consumers in 2002 was an estimated 250m. This is in line with our forecasts for last year and we think this figure will rise to 320m in 2003," Mr McLoughlin said.

If the same proportion of internet users continues to buy online, then by 2005, between 350,000 and 400,000 Irish people will be buying goods online, he said.

Travel services, specifically airline tickets, continue to account for the bulk of online purchases, while books, CDs and tickets for events also continue to be big online sellers.

The ability to shop online at any time of day or night is the most frequently cited benefit. "This was especially evident among 25-34 year olds," said Ms MacCarvill.

"This is a money-rich, time-poor group who place real value on convenience," she said.

Other research conducted by Amárach shows that more than four in 10 adults (45%) said they could get better deals or cost-savings by shopping online. The ability to compare products and prices from different websites appealed to a significant number. Avoidance of queues and dealing with sales people was also considered a major benefit.

Not having a credit card continues to be the main barrier to online shopping, particularly among younger internet users and security concerns remain a major barrier.

Two-thirds (66%) of internet users agree companies are not doing enough to demonstrate the security and safety of online shopping.

"Many internet users remain unconvinced of the security of using their credit card online," Mr McLoughlin said.