Many independent stores across Canada have a weak online presence, and shoppers across the country are turning away from local businesses and making purchases from online retailers
Across Metro Vancouver alone, local stores are expected to lose $1.6 billion this year to online retailers such as Amazon, which controls 30% of the market across Canada, according to a Vancity report released November 25.
Of all lost sales, $500 million will be lost to cross-border shopping, in spite of the weak Canadian dollar.
This is bad not just for the retailers themselves, as while local retailers recirculate 45 cents of every dollar earned into the local economy, a foreign online retailer will recirculate only one cent.
“It is important for us to support local retailers in a changing retail environment,” said Christine Bergeron, vice-president of community business for Vancity.
“It is also important for them to improve their online presence in order to recirculate greater wealth into our local economy and keep 10% of B.C.’s workforce employed.”
Many Canadian retailers—61%, according to a Retail Council of Canada study—have no online presence at all, meaning shoppers can’t even find their contact info on the Internet.
Not all online competition comes from foreign sources. Some Vancouver-based stores such as Clearly.ca and BuildDirect.com have been successful at taking advantage of shopping trends.
Local retailers need to get online, the report said, as in-store sales are contracting while online shopping will continue to increase. Between 2014 and 2019, online sales are forecast to increase by more than 50%. This year alone, online sales across Canada will grow by 13.2%, while sales at brick-and-mortar stores are expected to contract 0.4%.
The report recommends that independent stores develop a digital presence, but this doesn’t necessarily mean they need a dedicated e-commerce website.
“If the market is highly local, a ‘click and collect’ model where consumers make a purchase online and pick goods up themselves may avoid the difficulty and cost of e-commerce delivery logistics,” the report says.
It could also be beneficial to partner with a marketplace such as Amazon or eBay, Vancity said.