Online spending surged 41% in 2021, PayPal study finds

Consumers keep veering towards web purchases with average spend of €503 last year

Irish shoppers have increasingly turned to local websites for their online purchases, a new report from PayPal has found.

PayPal’s Retail Trends and Spends Study, which surveyed 1,001 respondents across the State in November 2021, found online spending was 41 per cent higher last year, with the average spend reaching €503 over the course of 2021. That was up from an average of €357 in 2020, and compared to an average spend of €329 by shoppers based in the Republic on international websites.

The UK topped the list of non-Irish shopping destinations, with 74 per cent of respondents buying from sites based there. Europe accounted for 48 per cent, and China was in third at 28 per cent.

The PayPal research found women spent considerably more with Irish websites, at an annual total of €534 versus €351 spent by male respondents.

Wicklow spenders

On a geographical basis, Wicklow residents were the top spenders with Irish sites, with Carlow in second and Meath in third place. Monaghan and Offaly rounded out the top five.

The pandemic and accompanying restrictions have seen a significant shift to digital channels, with more than half of consumers saying they had permanently changed their spending habits. Some 62 per cent said they would shop online more this year.

Some 49 per cent said they would do all shopping online if they could, with millennials most enthusiastically embracing the idea.

Official retail statistics measured by the Central Statistics Office include traditional bricks and mortar sales, and sales from Irish online sellers. The official data showed online transactions with Irish retailers accounted for 6.5 per cent of retail sales in December, up from 3 to 4 per cent pre-Covid-19. In April 2020, with all non-essential retail closed, that figure was 15 per cent.

Shopping convenience

"It's great to see how Irish people are prioritising their online spending on Irish businesses. Regardless of where we buy from though, it's clear that online shopping has become a critical convenience for Irish people, not only during the pandemic but as part of our regular, busy lives," said Maeve Dorman, senior vice president at PayPal.

“There is a real opportunity for online retailers to make a difference, but businesses need to have an ecommerce platform in place that can meet their customers’ needs, wherever they are – online, on the go or in-store.”

There have been other developments sparked by Covid-19. Almost three-quarters of those surveyed for the PayPal research said they preferred cashless transactions, which ties in with recent data from Banking & Payments Federation Ireland that indicated the increasing popularity of contactless payments. The industry body said the value of contactless payments surged to €13.6 billion last year, while the volume of such transactions was up 36.5 per cent year-on-year at €834 million. More than half of all card payments were contactless last year, and 36 per cent of in-store spending is now accounted for by contactless payments, which includes mobile wallets such as Apple Pay or Google Pay.

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist