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Net worth: the power of online trading

Many businesses which had to turn off the lights in their physical premises have been illuminated by the power of digital

Michael and Aisling Flanagan of Mayo-based Velvet Cloud, a maker of natural sheep’s milk yoghurt and cheese.

Michael and Aisling Flanagan of Mayo-based Velvet Cloud, a maker of natural sheep’s milk yoghurt and cheese.

 

Covid-19 has radically accelerated digital transformation around the world, turbo-boosting everything from telehealth to fintech. Initial lockdowns followed by the ongoing need for physical distancing have split businesses into those that can sell online and those that can’t.

Even giants such as Primark, or Penneys as we know it, were hit by the digital divide. Not having an ecommerce channel not only saw sales plummet from £650 million (€718 million) a month to zero, but the fast fashion specialist also took a £284 million (€313.9 million) hit for stock languishing behind its shutters. Today, 68,000 Primark staff depend on government furlough schemes across Europe.

Though businesses are now re-opening, many are concerned about the financial sustainability of ongoing physical distancing rules, and, of course, whether or not consumers will be keen to come out and do business with them any time soon.

It’s why omnichannel selling, a combination of bricks and mortar with ecommerce and click-and-collect offerings, has become a strategic priority.

From having no online sales at all, it’s now flying for us

Food entrepreneur Jo Davey set up her healthy snack food business, Absolute Nutrition, in 2014. She spent the next six years growing sales through supermarkets and cafes countrywide. The business’s success meant online sales played second fiddle. When Covid-19 closed down food service outlets across the country, it became lead violin.

By running competitions, posting on social media sites, promoting discounts and running collaborative campaigns with other online businesses, it helped her drive online demand. “From having no online sales at all, it’s now flying for us,” says Davey.

Online Trading Vouchers

For businesses looking to go online, or to develop brochure sites into ecommerce ones, the Local Enterprise Offices (LEOs) offer Trading Online Vouchers worth €2,500. Businesses can apply for up to two and, while previously these had to be match-funded on a 50/50 basis by the business, changes introduced since Covid-19 mean they are now 90 per cent funded by the LEOs, which also provide a range of training supports to help businesses succeed online.

Aisling and Michael Flanagan of Mayo-based food business Velvet Cloud, a maker of natural sheep’s milk yoghurt and cheese, used a voucher when their food service business also saw a pandemic plummet. When restaurants closed as part of the lockdown, it lost 50 per cent of its business overnight.

A Trading Online Voucher enabled them to turn their existing brochure website into an ecommerce one and grow sales back up. Where previously customers could only find them in supermarkets and food service outlets in Dublin and Mayo, they are now selling direct to customers “from Donegal to Dingle”, says Aisling. The pair are also considering exports.

The urgent need for businesses to start selling online has given rise to new business opportunities too. When Suzanne Rigby and Mark Hooper saw how many businesses were unable to trade online during lockdown, they developed ClickandCollection.com, which enables small businesses to get online in minutes for just a few euro a month.

Store owners simply upload pictures of their stock, and customers can pick, pay for and organise a time for collecting their goods online in seconds. As well as allowing customers browse at their leisure, it helps retailers manage customer through-flow in a way that adheres to physical distancing guidelines.

Many restaurants and cafes which turned to takeout orders in the lockdown will continue with the service even though reopened to diners. It proved particularly popular with pharmacies too, which, while they remained open throughout the lockdown, could not allow browsing for items such as skincare and cosmetics, an important driver of revenues.

Business lifeline

Unifiy, a wholesale food and grocery ordering app, responded to the changed environment by making itself available to the public, providing a business lifeline for Irish wholesale suppliers and producers who saw sales orders decline by up to 90 per cent after the lockdown came into effect.

The UnifyOrdering app allows the public to order from these same Irish wholesale suppliers and producers as Michelin-starred restaurants, with deliveries initially to the greater Dublin area only but plans to deliver countrywide.

It has also been extended to include premium independent retailers as a business lifeline for many providers in the food sector.

The easy to use UnifyOrdering app is free to download and has given the general public access to top-quality produce at wholesale prices across fruit, veg, meat, dairy, drinks, dried goods and cleaning products. Customers can browse suppliers and their products and order direct to their home or business address or beat the queues by collecting at their local supplier. 

Premium wholesale suppliers and producers involved include FXB, Italicatessen, Rustic Kitchen, Sustainable Seafood Ireland and Donabate Dexter.

Independent retailers on board include Fallon & Byrne, The Butler’s Pantry, Lilliput Stores, George’s Fish Shops, Lotts & Co, Lynam’s, Deveneys and Green Beards. Here, the customer can choose home delivery or ‘click & collect’.

“Our lifestyles have changed dramatically, we will be centred in the home for the foreseeable future. Enjoying meals and entertaining at home may be how we socialise going forward and UnifyOrdering will allow home cooks to get the best quality and specialist ingredients from Irish suppliers with ease. And all just in time for summer barbecues, small – and in time large – gatherings, and even late summer weddings,” says Barry McNerney, UnifyOrdering’s co-founder.

Even the idea of browsing around a shopping centre seems unimaginable now

The move online might have been an immediate response to a dramatic situation, but it isn’t likely to be rowed back on any time soon, if at all, suggests James Coffey of Bean Delivered, a coffee subscription service that set up last year.

As soon as the pandemic was announced, he secured a Business Continuity Voucher, worth up to €2,500 for companies to pay for consultancy to develop new strategies. As a result, he is working with an expert digital marketer to help develop the business faster.

Covid has been transformational for online, says Coffey “even the idea of browsing around a shopping centre seems unimaginable now”.

There are privacy issues to take into account as well, according to Samuel Plantié, principal data protection consultant with Gemserv. “First, both your website and customer database must be secured with state-of-the-art standards, in particular for processing payments and credit card details,” he advises.

“But complexity will arise with marketing and cookies, “ Plantié adds. “Many businesses will be tempted to use existing customer data for email marketing, and to track the journey of their website visitors to target these visitors online via digital advertising. But advertising cookies require opt-in consent, and you can only send direct marketing emails on an opt-out basis to pre-existing online customers. To send marketing emails to your physical retail customer database, you must rely on opt-in consent.”

Virtually made to measure

Louis Copeland has dressed generations of Irish businesspeople and a fair smattering of celebrities since it first opened its doors in 1933. Since then, it has seen a world war, depressions, recessions and a global financial collapse, but the Covid-19 crisis was the first time the company had to close its doors to the public.

But service to its customers remained uninterrupted thanks to an earlier investment in an online presence. “Thank goodness we started an online business three or four years ago,” says Louis Copeland. “Opening an online store is not that easy. It takes a lot of money and time and there are no rewards for two or three years.”

But it’s paying dividends now. “Once Covid-19 happened we had to close all our stores. We decided to cut our losses and offer 40 per cent off everything to get money in to pay our staff and suppliers. Thankfully, it worked and we had cash coming in to pay wages and suppliers.”

The company rented premises in Churchtown in south Dublin to support its expanded online offering. “We had six staff working there socially distanced,” Copeland adds. “Customers can order online but if they want to chat with a salesperson, they can ring in. If they can’t get an answer they can email their number and we get back to them. Nine times out of 10 we are able to talk them through their size. Sometimes we do a video call with WhatsApp to do it. If someone walks into the shop, I don’t need a measuring tape to get their size – it’s the same on a video call. We also ask what brands they normally wear as sizes can differ.”

Business was quite brisk during the lockdown. “A lot of people were still working. If you’re on a conference call it is important to dress appropriately for the meeting. Staff call customers a few days after the clothes are delivered to make sure they are happy. We take them back if they’re not. Having the online presence was very important for us. It kept the brand out there and opened us up to people who never shopped with us. Maybe they will come to us now that we are open again. It has opened us up to a younger audience as well.”