When the pandemic lockdown forced Badlands Brewing Company to close its doors, the craft brewery moved quickly to get online sales up and running. That was the easy part. Then came a slew of new challenges.
First, the small brewery based in Caledon, Ont., ran out of beer. Online sales were strong – so strong, in fact, they had to shut them down for a time.
“We just didn’t have the beer to send out,” says Troy Baxter, one of the owners and head brewer at Badlands.
Fortunately, the small enterprise had invested in a new, larger-capacity brewery before the pandemic began. Once that was up and running, the supply problem was solved.
But then, there were the logistics and cost of switching overnight from 100 per cent in-person sales of draft brews in their beer garden to 100 per cent online sales and all that entails.
“[Building] the website, there are so many options out there now, you can be up and running in an hour. That’s not the challenging piece of eCommerce any more,” says Mr. Baxter. “The more challenging thing is definitely the logistics of getting beer to people in good shape and the additional man-hours it takes to put beers in boxes and then ship them out.”
But above all else, the single largest challenge for any small business like his is the cost, he says.
Start with the cost of the eCommerce “plug-and-play” platform that makes online sales so easy. Add to that the cost of credit card transaction fees, plus shipping costs, and even the shipping boxes, and the margins become pretty slim, he says.
“It adds up quick,” says Mr. Baxter, who estimates a three-per-cent loss in revenues right off the top.
In Badlands’ case, they went from selling draft to canning their beer, which is not a light and compact purchase.
“The common wisdom is to pass the cost along to the consumer but at a certain point there’s only so much cost a consumer will pay for a product.”
The brewery implemented a $15 flat-rate shipping fee, which more-or-less covered delivery costs within the Greater Toronto Area and environs of Caledon. But the customer base actually expanded during the pandemic lockdown, with orders coming in from further afield – and at a higher cost.
Mr. Baxter is very happy that the brewery’s beer garden has now reopened but, still, the switch to eCommerce was worth it, he says. The brewery sold a few hundred cans a week and survived.
Badlands will keep online sales as an option but will prioritize in-house sales, offering the beer-of-the-week for sale online the following week, if there is any left.
“We will keep doing that system as long as we have the beer to do it.”
Like Badlands, many small Canadian businesses quickly moved to eCommerce when pandemic health measures forced them to close their doors to in-person shopping and services.
Over the course of the year, Canada Post saw 67 per cent growth in the number of sign-ups to its free small business program and a 52 per cent increase in the volume of parcels being shipped by small businesses alone, says Jennifer Mach, director of small business marketing for Canada Post.
In December, small business parcel shipping spiked with an 82 per cent increase year-over-year.
“We certainly saw a big increase in new small businesses last year and small businesses ramping up eCommerce, existing ones that might have had a website and all of a sudden it became a vital revenue source for them.”
The growth continued into the first quarter of this year but has since slowed, she adds.
The federal postal service launched a Think Small campaign in May to help small business owners navigate the new world of e-commerce.
Consumers have responded to the shift, says Ms. Mach. Canada Post’s latest consumer research found 60 per cent of Canadians say they make a conscious effort to purchase from a Canadian-based retailer and 44 per cent say they make a conscious effort to support small and independent online businesses.
“[The pandemic closures] really brought a resurgence in terms of people being more mindful about supporting their local businesses.”
The “shop local” trend has taken off to some extent, agrees Gregor Barry, the Canada lead for Accenture Interactive, the digital division of the Irish multinational consulting and processing services company Accenture.
But in the world of eCommerce, small Canadian businesses are competing in a global market, he says.
“To an extent, people want to shop locally … but if expectations can’t be met a customer is going to go elsewhere,” he says.
Large enterprises have the advantage of scale, says Mr. Barry. Small businesses need to consider merchandising, marketing, website content, customer experience, ordering, order fulfilment and returns and refunds, to name just a few hurdles, he says.
“It’s not just about standing up the transactional website,” he says. “You’re still in a competitive market so you still need to have these capabilities and a marketing strategy to actually acquire and sell to customers.”
However, the barriers to eCommerce are now very low for small- and medium-sized businesses, he explains. There are a number of platforms that provide the tools to get a site up and running quickly – it doesn’t have to be daunting.
“I think traditional brick-and-mortar business isn’t going away but it’s not hard to point to the crazy growth that digital has seen in the last five years and obviously in the last year,” says Mr. Barry.
“Everybody should be thinking about how to get into it. It doesn’t mean you need to … run a huge commerce business.”
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