Customers of Amazon in the State can expect faster deliveries next year, following the creation of a new distribution centre in Dublin that will mean the hiring of 500 people.
The company's 58,529sq m "fulfilment centre" at Baldonnell Business Park, Dublin, will serve customers across the island of Ireland and the rest of Europe, housing thousands of products.
Meanwhile, Amazon, which opened a delivery branch Rathcoole last October, is to open a second one this autumn in Ballycoolin in Dublin 15, with 20 permanent employees.
The news was welcomed by Minister for Enterprise Leo Varadkar, who said it will mean faster delivery of goods and "strongly underscores Amazon's continued commitment to Ireland".
At present much of Amazon’s orders for Irish customers are filled in the UK before being shipped to here where they are delivered by An Post. Amazon Prime deliveries are handled by Zeus Logistics.
The new Baldonnel centre will allow Amazon to bypass the UK and avoid any delays or extra charges due to Brexit rules. It will also handle deliveries for Northern Ireland.
However, the increased presence of Amazon in Ireland has heightened fears among Irish retailers that the online giant will devastate shops, especially in rural Ireland.
The developments, however, may allow more small Irish retailers use its reseller platform, list their stock on its marketplace and take advantage of its expansive logistics system for deliveries and returns.
People in the Republic spend €2 billion online monthly with in excess of half of that spending leaving the country, much of it going Amazon’s way.
However, Tomas Kenny of Kenny’s Bookshop in Galway said news of Amazon’s expansion had made him “very nervous” for his own business and for other retailers, including Irish online operations.
One good news story of the pandemic has been the revitalisation of rural Ireland – with more people shopping locally, but this commitment will “be tested like never before” by the deepening of Amazon’s footprint in Ireland.
“Look at what has happened in the US and in the UK in the wake of Amazon. It has been an absolute disaster for traditional retail and I would be afraid the same thing would happen here,” he said.
‘We are cheaper’
Not only has Amazon a size advantage, it also enjoys name recognition. “It is the default for many people who just assume it is cheaper. But the truth is we are cheaper than Amazon for the vast bulk of our stock ,” he said.
One small retailer, Tara Hammond, who set up the artisan home-ware brand, Slated 10 years ago, said Amazon’s expansion will in the long term will be seen as bad news.
It will alter customers’ expectations about delivery times, especially about 24-hour deliveries. “People will expect [that] from everyone and they may not appreciate that smaller artisan operations have longer turnaround times . . . We have to go back more to shopping local and . . . [supporting] the people who make our towns and communities what they are.”
Alo Donegan, who owns a small electrical store in Market Square, Portlaoise, believes that significant damage has already been caused by Amazon, but traditional retail is still in the fight.
“Amazon are the big boys, but there’s definitely a lot of people who have moved away from them and they’ll only buy from them if they really need to,” he said
Duncan Graham of Retail Excellence said an Amazon distribution centre would allow Irish retailers to find alternative sales opportunities by selling on Amazon, but it will bring more competition.
Irish retailers are fighting back and developing their own online operations. “In the future, if you want to be successful in retail you will need both online and bricks and mortar,” he said.
