Bernice and Justin Clarke knew they had to get around to setting up a website. They had owned a domain name for about a year. But running the small Nunavut-based business, making soaps and other skin-care products, kept them busy. E-commerce was never first on the long list of things to manage.
Then the COVID-19 pandemic hit. The bustling craft fairs that were Uasau Soap’s bread and butter went quiet. The gift shop at the Iqaluit airport that carried the products was closed. And specialty retailers across the country that bought from Uasau faced lockdowns or severely restricted store traffic.
“It pushed us to get it done,” Ms. Clarke said of the site, which went live on July 1. Since then, her total sales have grown by 30 per cent compared with before the pandemic. For Ms. Clarke, the use of local ingredients, including bowhead whale oil, is a way to showcase her Inuit culture, and she has been amazed to find customers for her products in places as far-flung as Russia, Argentina and Denmark.
“It’s more than skin deep. ... People want to be part of this story,” she said. “I love sharing it.”
Uasau Soap is just one of tens of thousands of retailers across Canada that have made the e-commerce shift out of necessity during the pandemic – and are now hoping online sales will help them to survive a make-or-break holiday shopping season.
The Canadian Federation of Independent Business estimates 152,000 small businesses in Canada have begun selling online since March.
They are chasing a trend that was already in motion, but has accelerated as more shoppers have formed an online shopping habit during the pandemic. In the seven months from March to September, e-commerce sales in Canada surpassed the total for all of 2019, reaching $22.1-billion, according to Statistics Canada.
And while e-commerce still made up less than 6 per cent of total retail sales in September, the appetite is growing. According to an October survey from Boston Consulting Group, nearly 20 per cent of Canadians intended to shift holiday spending with non-food retailers from stores to online.
“We have leapt ahead by a few years,” said Kathleen Polsinello managing director and partner at Boston Consulting Group. Canada still lags behind countries such as Britain and United States in e-commerce sales, she added – more because the breadth of assortment and delivery options have been more limited, and not because of a lack of demand among shoppers.
“It’s hard for people to resist Amazon. This at least gives us a fighting chance,” said Lisa Nitkin, owner of Pets West in Victoria, who spent $15,000 to build her website and is selling online for the first time after 31 years in business. Offering free delivery in the Greater Victoria Area has eaten into her profits, although about one-quarter of online buyers opt for curbside pickup. “We look at things bigger than today’s sale. We don’t want to lose the customer in the long run,” she said before being rudely interrupted by her squawking cockatoo.
Since Great Lakes Brewery in Etobicoke, Ont., started selling beer online in March, total sales have grown by 10 per cent to 15 per cent. The 33-year-old brewery has purchased additional vans and is brewing more beer to meet the demand.
Some small businesses started with whatever ersatz e-commerce they could manage in the pandemic’s early days. During lockdowns in the spring, Asha Allen-Silverstein, founder and co-owner of Toronto’s the Beauty Collective, began selling at-home eyebrow kits over social media and doing video tutorials for clients. She is now researching platforms to build an e-commerce website. “Our services are locally based, but that doesn’t mean our products can’t be global,” she said.
Many businesses have been turning to Canadian e-commerce firm Shopify to build their sites. The company saw the number of new stores on its platform grow 71 per cent from the first quarter to the second this year.
“A lot of that growth came from brick-and-mortar businesses that were facing a harsh new reality,” said Satish Kanwar, vice-president of product at Shopify.
“It’s a totally different business. You’re competing with the world,” said Tariq Al Barwani, owner of Toronto’s Plentea. Without customers in the tea shop, he turned online to sell packaged blends and had to work on search engine optimization just to get found online.
That is a real issue: Shoppers who Google a product are more likely to land on Amazon or another big site. Small retailers do not have the marketing dollars to compete, and depend on customers who already know them and seek them out.
That was what spurred Dorina Pasca to turn to eBay rather than building her own site for her Vancouver business, the Swiss Watch Parts Distributors. Sales are down, but about half of her online business is from international clients that would not have found her otherwise, she said.
Niche products have an advantage online, because they are not competing with Amazon, said Paula DiRenzo, owner of Blackbird Vintage Finds in Toronto. Her site, launched in April, has been a “lifeline,” she said. Like many small-business owners, she is facing the logistics of shipping for the first time and doing some porch drop-offs herself. “Where I can, I’m the courier,” she said.
A challenge for these retailers is that sites such as Amazon have trained customers to expect free shipping.
“It is a real uphill battle,” said Dan Kelly, president and chief executive of CFIB.
For many businesses, e-commerce is a matter of survival. CFIB predicts approximately 25,000 small retailers could go out of business before the end of the pandemic, which would mean one in seven independent storefronts going dark.
When the pandemic hit, Phil Klein had just signed a lease to open a bagel shop in Winnipeg. So, Bagelsmith began selling online, working out of a rented hotel kitchen and offering delivery until opening its doors in October. Mr. Klein is now doing 60 to 80 deliveries a day. He is grateful to have more than one revenue stream and will keep online sales going, but e-commerce is not what made him open a retail business.
“I envisioned a loud, busy, bustling shop,” he said. “There’s nothing like getting a bagel hot off the line. That’s the experience I want people to have.”
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