Despite the fact furniture sales at Cymax Stores are expected to reach $140 million by year’s end, founder and CEO Arash Fasihistill doesn’t think of the Burnaby-based business as a retailer.
“We see ourselves as a tech company,” he said. “We happen to sell furniture.”
Cymax designs software for drop shipping companies — a business model whereby a retailer does not stock goods, but transfers orders to the manufacturer.
So while Cymax uses the software to sell furniture, other companies licence the software to sell other products online.
Earlier this year the company launched a business services division, Constant Retail, after a large U.S. firm offered to buy Cymax’s proprietary software. Fasihi declined to sell after realizing how much value there was behind a company that could provide ecommerce platforms to smaller businesses.
“A lot of the small stores don’t have the budget or the capability,” he said.
“They come to us and we are the back-end fulfillment.”
He said the online infrastructure Cymax provides is helping to solve a problem plaguing small and medium-sized enterprises (SMEs) in Canada.
An October report from the Internet Association (IA) singled out the country specifically for being behind much of the rest of the world when it comes to its online economy.
The IA — an online advocacy group representing the likes of eBay (NASDAQ: EBAY), Amazon (NASDAQ:AMZN) and Google (NASDAQ:GOOG) — found just 10.1% of Canadian SMEs were selling online compared with 30.5% of large businesses.
The report also pointed out that although Canadians are some of the world’s heaviest users of the Internet, only 3% of the country’s retail economy is online. In the U.S., 7% of the retail economy is online, while 23% of the U.K.’s retail economy is online.
“Consumer shopping patterns clearly have changed with the advent of technology,” said Google Canada’s head of retail industry, Rafe Petkovic, who is speaking in Vancouver at the Retail Spark road show November 13.
“There’s a largely missed opportunity for all those small, independent retailers if they’re not there (online) when consumers are looking for their products.”
The Retail Spark conference is expected to draw hundreds of small business owners to panels featuring industry experts, including Mark Startup, vice-president of the Retail Council of Canada’s MyStore division.
“Canadian independent retail is a laggard,” Startup said.
“The good news is technology and the awareness of technology…and the path to technology is becoming easier for independent retailers.”
But he said not every solution offered by tech companies such as Cymax is going to work for small businesses making a push online.
“Before a merchant examines what technology is available, the merchant must first create their strategy,” he said.
“And on that front, we also have concerns a number independent retailers do not have a written strategy to drive their brand forward.”
Even well-established mid-size retailers such as Vancouver’s own Mountain Equipment Co-op (MEC) are playing catch-up relative to their American competitors.
“The last catalogue that MEC produced was in 2011,” MEC chief marketing officer Anne Donohoe said.
“The real push into digital came after that, when our ecommerce site became essentially our catalogue.”
She told Business in Vancouver MEC is already in the midst of migrating its own ecommerce platform to another service in a bid to keep up with consumer demands for online shopping features.
“Consumers are more and more comfortable purchasing on their mobile phones and tablets,” Donohoe said, “so having a mobile-first strategy and experience that is optimized online on the mobile devices is critical.”
Curtis Petersen, chief marketing officer at Vancouver-based online footwear retailer ShoeMe, said businesses are going to have a tough go at it online unless they have a very unique selling proposition that caters to a niche market.
But because Canada is so far behind much of the rest of the developed world, he said that means there’s a lot more room for growth in the online retail economy.
“You have the opportunity to have a virtually unlimited potential as far as people coming through your (online) door,” Petersen said.
“It’s also unlimited access to competition, unfortunately.”
