Online shopping is coming to Canada in a big way but it may not be all it’s cracked up to be – businesses may not see the benefits they expect.
The Retail Council of Canada, which represents more than 43,000 Canadian retail stores, announced a partnership this month with Shopify, an online sales expert, to encourage Canadian retailers to build online stores. The hope is that Canadian shoppers will buy from Canadian online retailers instead of international competitors.
Shopify helps retailers set up an online retail site from scratch – everything from the layout to the management of payments. All of this is done for a fee. The most basic package advertised on Shopify’s website is $14 per month with the monthly fee increasing as more services are added. The cost seems to be lot for a site that won’t let the store display unlimited merchandise.
This spending is questionable since Canadians identified the lack of merchandise available online as one of the top reasons they’re shopping at international online stores, according to a Forrester report released in April called the State of Canadian Online Retail 2013.
The report also indicates that another one of the main appeals of international online shopping is the availability of lower retail prices. Even if every retail store in Canada adopts online stores, there is no guarantee the prices will be lower than international competitors or that shoppers will choose to transition to Canadian online retail.
For small businesses that rely on foot traffic, the encouragement to move online presents a two-fold problem. First, it may be unrealistic to put money into a virtual site every month. The second is the threat that consumers will move to an exclusively online habit.
If most stores are online it seems plausible that consumers will stick to their staple stores and not venture to new shops. Stores may experience a decrease in new clientele and have difficulty sustaining their businesses.
Online shopping also requires the consumer to have a clear focus. The shopper needs to know what store they’re interested in and which products they’re considering.
Stores will have to include as many items as possible online and advertise in more locations.
With in-store shopping, owners can count on new passersby coming into the shop out of curiosity. As more stores go online potentially less people will walk the shopping areas and discover shops.
For the consumer the need to focus is problematic because it’s difficult to find what they don’t know they’re looking for.
If a shopper is walking down Bank Street and sees an intriguing item in a store window, they could spontaneously check it out. There’s no option for this spontaneity on the Internet. Every search requires some preconceived idea.
The Retail Council of Canada and Shopify say they are looking to get every retail shop in Canada involved in online sales. The impact on communities built around retail areas remains to be seen.
In an environment such as Centretown the impact could be huge, the push to move to online sales may mean less people will be needed to work in the stores because there will be less foot traffic and fewer people actually in the shops.
This could have a snowball effect and impact other local businesses as well. If people aren’t walking around to shop, those same people won’t stop at a convenience store for a bottle of water or go to a restaurant for lunch.
Although the Retail Association of Canada wants to have a presence in the international retail market, the potential consequences of online sales may mean it’s not worth it.