Wednesday, 11 December 2019

Questions (173)

Fiona O'Loughlin

Question:

173. Deputy Fiona O'Loughlin asked the Minister for Business, Enterprise and Innovation her views on the impact online shopping and digital transformation are having on the retail sector; and if she will make a statement on the matter. [52032/19]

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Written answers (Question to Business)

As Chair of the Retail Consultation Forum, I am acutely aware of the transformation which the retail sector is undergoing. The growth in demand for shopping online domestically and globally is driving the retail sector more broadly to develop its online capability in order to enhance its competitiveness. Retailing supports jobs in every city, town and village in the country, with one in every seven people at work in the retail sector. Therefore, it is critical that our retail sector is both productive and competitive to sustain employment across the country, in the long term.

Technological breakthroughs, as one of the global megatrends, has greatly affected retailing. The pace and progress of technological change has never been greater, and it is clear that this transformation – although exciting, is challenging for the sector. The digital economy provides a different retail experience for consumers across Ireland and beyond. Digitalisation has increased the scope for competition in the retail sector, domestically and internationally, as reflected in the growth in online shopping and changing consumer preferences in terms of how people are shopping in town centres. Sustaining physical retail outlets requires adaptation: many retailers now offer multiple sales channels to sell their goods, from physical stores, to social media, mobile apps and websites.

I want Irish based retailers to compete at the forefront of the digital revolution and have prioritised supporting the retail sector to develop their online capability, in order for them to expand their market reach nationally and internationally and enhance their competitiveness. To enable retailers to increase their customer base and build a more resilient business, I introduced a new pilot Online Retail Scheme in 2018 administered by Enterprise Ireland. The Scheme, with a fund of up to €1.25m over two Calls, provided funding to 40 retailers across Ireland, with grants of between €10,000 and €25,000 on a 50 percent match fund basis. The Pilot Online Retail Scheme concluded this year and my Department and Enterprise Ireland will review its effectiveness.

Additionally, the Local Enterprise Offices (LEOs) undertake a number of activities to encourage businesses, including retail businesses, to build their online presence and compete online. The Trading Online Voucher Scheme administered by the LEOs and funded by the Department of Communications, Climate Action and Environment, is designed to help micro businesses trade online to boost their sales and reach new markets. The Scheme is a matched-funding opportunity with up to €2,500 available, with training provided by Local Enterprise Offices. Funding can be used towards eligible costs such as digital marketing strategies, e-commerce websites or app development.

LEO Measure 2 supports including training in digital marketing, management development, Lean4Micro, Productivity Voucher and mentoring are available to all sectors including retailers.

I recently announced the successful projects under the LEO Competitive Fund. One of the projects - the eCommerce Cluster project has a primary objective to support and educate online retailers in the North-East. Led by LEO Monaghan, in collaboration with LEO Cavan, Louth and Meath, the project will bring online retailers in these counties together, to share experience and best practice, access online expertise and support members to develop and grow their online business domestically and internationally.

As set out in Future Jobs Ireland 2019, all businesses, regardless of size or sector, in today’s digital environment need to focus on building competitive online capability. In line with this, my Department has commenced a study on the retail sector to understand the full extent and impact of disruption to pre-existing business models in light of digital transformation. I look forward to seeing the results of the research study and continuing to work with the Retail Consultation Forum and its focus on the current and future developmental needs of the retail sector.