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Speech by Minister Sean Kyne at the Retail Excellence Annual E-Commerce Conference

SPEECH

BY

Seán Kyne T.D.

Minister of state for Community Development, Natural Resources and Digital Development

AT

Retail Excellence's annual e-Commerce Conference

Crowne Plaza Hotel - Blanchardstown

 

Wednesday 19th September 2018

I'd like to welcome everyone to today's conference and I'd like to thank Lorraine and David and the Retail Excellence Ireland team for the invitation to speak. 

I don't need to remind anyone here that the retail landscape has changed utterly and that those transformative and large-scale changes have obliterated old certainties and traditional business practices. 

This month it is ten years since the collapse of Lehman Brothers which was followed by the Bank Guarantee and the Emergency Funding Programme from the Troika. Almost every sector - whether public, private community and voluntary - struggled. 

It was a very bleak time as businesses struggled, many downsized, some failed. Household names disappeared. Think of Clery's and Boyer's in the Irish context and in the UK such titans of the high street at Woolworths, Comet, British Home Stores and many more disappeared. Others such as Littlewoods completely transformed their business model. 

The failure of small-to-medium sized retail businesses impacted every community in Ireland, with a vicious circle developing whereby towns and villages would experience business closures which in turn reduced footfall and spending, heaping pressure on other businesses. 

Thankfully, for most communities and for most of us things have improved greatly. However, in some ways the Recession masked the structural changes that had already been underway for several years.

The development and growth of online shopping created new opportunities but also drew existing and potential customers away. The development of wifi, of smartphones, of user-friendly mobile internet experiences, made shopping online easier than ever before. 

And yet, with some exceptions, the traditional retail experience has not disappeared and there are even some categories for which the physical retail presence will probably always be preferred.

Customer preferences may change but they don't stand still and it isn't always a one way street. Think, for example, of music retailing and the journey from record shops to online stores, from downloading to streaming, and now, seemingly, back again to record shops with a resurgence in vinyl sales. A similar trend can be seen in books. Predictions of a wholesale move to e-books have proved grossly premature. 

I believe the successful way forward is to help businesses - and in turn communities - achieve a 'clicks and bricks' mix. 

Some of you may be aware of the Atlantic Economic Corridor - the Taskforce of stakeholders working together to build a city of scale along the West Coast, building on the strengths of the region, piloting new ideas and innovations.

In my research I read recently the second edition of the Grimsey Review - a UK report on the high street and how it can be supported given the transformations that have occurred. It makes for interesting reading and I think it contains lessons for all of us who are working to support vibrant and sustainable communities.

The over-arching objective is to ensure that our villages, towns and cities are pleasant places to be brought about by investment in the public realm. I believe the Regeneration Funds – the €2 billion urban fund and the €1 billion rural fund will achieve this and more.

Part and parcel of vibrant and sustainable communities are successful retailers. 

I think we can all appreciate a successful retailer today is one which understands the importance of the online marketplace as much as the physical one. And it's why, in Government, we are focusing on supporting our retailers, and especially our local SMEs to get online.  Becoming part of the digital transformation is now a matter of survival. A recent report by PayPal shows that Irish consumers rank in the top three countries for shopping across borders with the top two reasons citing for shopping across borders being 'better prices' and 'accessing items not available at home'.

We know too that almost 70% of Ireland's online spend is going to overseas businesses. Irish SMEs not trading online are losing out and this does not have to be so. 

Earlier this year the latest European DESI (Digital Economy and Social Index) report saw Ireland move 3 places up the rankings of Member States from 9th to 6th.  This improvement was largely due to better performance on connectivity and a very strong dedication to education in the STEM (Science, Technology, Engineering and mathematics) disciplines but also in encouraging the use of online commerce by SMEs.

The National Broadband Plan (NBP) aims to ensure that every home, school and business in Ireland - regardless of how remote or rural - has access to high speed broadband. This is being achieved through a combination of commercial investment across Ireland; and a State intervention in those areas where commercial operators acting alone are unlikely to invest. These are primarily rural areas.

Commercial investment of over €2.75 billion euro has provided access today to over 7 in 10 premises in the country with high speed broadband.

The Department of Communications is in the final stages of a procurement process to select a company that will roll out and maintain a new, future-proofed, high speed broadband network for the State-led intervention under the NBP to some 540,000 premises in the intervention area for a period of 25 years.

I am pleased to provide an update here that yesterday, 18th September, the bidder in the National Broadband Plan procurement process submitted its Final Tender to my Department.  Over the coming weeks the Department's procurement team will evaluate the submission.

I think it is important to highlight that almost every country is grappling with the issue of high speed internet access. Connectivity is a challenge everywhere, not just in Ireland and I believe Ireland is much further ahead than many.

I am also co-chair of the Mobile Phone and Broadband Taskforce which comprises representatives from government departments, State agencies, local authorities, business orgaisations and the telecommunications sector, among others. The Taskforce has been working away, quietly but steadily, to address the issues facing mobile phone and broadband connectivity.

Significant achievements range from identifying and addressing coverage blackspots to ensuring the use of State-owned assets for telecoms infrastructure to providing the most up-to-date information on services. All of the actions are being driven with citizens, with local businesses and with the consumer in mind.

The full delivery of the NBP and the work plan from the Mobile Phone and Broadband Taskforce will bridge the digital divide and support rural and regional Ireland in realising its full potential. This will allow more businesses to begin their online journey without being isolated by their physical location.

In addition to the National Broadband plan and continued commercial investment in this area, there are a number of other initiatives underway at a national level to help improve our connectivity.

ComReg's quarterly market report shows continuing growth in high speed broadband services:

  • Three-quarters all fixed broadband subscriptions are now equal to or greater than 30Mbps, up from 68.7% in the previous 12 months; while average fixed broadband speeds continue to increase.
  • Connections to a pure fibre service continue to grow, and connections this quarter show a growth of 21%, which is a 3 fold increase in the past year.
  • Irish household (fixed and mobile) broadband penetration rate at the end of Q2 was the 8th highest of the 28 EU member states at 88%.  The EU average is 85%.
  • WiFi access continues to increase, with an estimated 4,029 WiFi access points throughout the country, up 8% in the previous 12 months.

At the Department of Rural and Community we are working closely with the local authorities to prepare and publish local digital strategies. As a first step in this process, the Department engaged Indecon to assess the digital readiness (or maturity) of each local authority area relative to a seven pillar digital framework.

These assessments provide clear, insightful data that local authorities are using to develop their local digital strategies. Our ambition is to see a local digital strategy in place in every local authority area, thus providing the necessary strategic planning to ensure the full benefits of high-speed broadband are realised by communities and businesses throughout the country.

However, we're also conscious of other important actions. These include ICT skills and cybersecurity issues. In terms of ICT skills the National Skills Strategy has been widened and the Springboard series of courses has been opened up to include not only job-seekers or home-makers but also those currently in employment so that they too can acquire new skills or up-skill for free.

Digital Inclusion is also very important to me and it's vital that no one is left behind. The Digital Skills for Citizens Initiative is powering ahead to the extent that at this stage we're only short of chasing older people down the street to get them to sign up to digital skills training! By acquiring the confidence, as much as the knowledge, to get online consumers can show their support for local businesses – online as well as offline.

The Department of Communication's Trading Online Voucher Scheme, delivered by the 31 Local Enterprise Offices nationwide, has supported thousands of small Irish businesses to trade online. Over 4,600 small businesses have successfully applied through the scheme for grant assistance to develop their ecommerce capability. More than 11,000 business owner and managers have benefitted from expert advice and from peer-to-peer support under the Scheme.

I would encourage any business that could benefit from some advice on trading online to avail of this opportunity and to contact their Local Enterprise Office today. Business who have been through our Scheme grow on average by 21%, employ 35% more people and 3 in 5 export for the first time, through online trade.

I would like to acknowledge Retail Excellence for their continued support of the scheme and for opportunities such as these to speak about it.

Ecommerce sales in Ireland are forecast to be at €7.16 billion this year. We are working to ensure that no business is disadvantaged in a digital Ireland. The Government wants more businesses in Ireland to realise the potential of ecommerce. Every business, regardless of size or location, can benefit from trading online. It opens businesses to wider markets and offers 24-hours-a-day sales opportunities for products and services. No matter what sector, region, or market you are engaged in, trading online is an imperative.

There are some excellent speakers lined up for today and I hope that everyone will find inspiration for their businesses because after all successful businesses locally benefit us all.

Go raibh maith agaibh.

 

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