Rebecca McKillican is chief executive officer at Well.ca.
Eight years ago, I was working for a private equity firm based in New York. The sheer size of the city and the hectic lifestyle drove me to change my shopping behaviour: I embraced online shopping, where everything I needed was just a click away, with a better product assortment.
It wasn't until I moved back to Canada years later that I was stunned by the reality of a less-than-inspiring e-tailing environment, where far fewer retailers had an online presence – an environment that soon became integral to my career and livelihood.
Despite a growing appetite for it, Canada's independent retailers remained noticeably absent from the world of e-commerce. Research from Canada Post last year showed 76 per cent of Canadians reported shopping online in 2014, and yet in 2013 – the most recent data from Statistics Canada – just 13 per cent of businesses were selling online. Online shopping was dominated by large retailers, many of which were based in the United States.
The attraction of e-commerce for Canadians is obvious: When you live in the world's second-largest country, geography becomes an impediment. Even in urban centres where retail options abound, consumers are often discouraged from trekking to stores by oppressive traffic and inadequate public-transit infrastructure.
And yet, despite discussions around e-commerce as critical to retailers' success, few are taking action. We have seen many Canadian businesses fail at e-commerce. It's a competitive space, and those that don't offer a niche that's different from giants such as Amazon or Wal-Mart will struggle. It's hard to pass judgment without understanding the challenges and complexities that create barriers. E-tailing in Canada can be gruelling, frustrating and expensive. But it can work, with the right approach and focus on the experience for Canadians.
- E-tailers are held to a higher standard. Despite the virtual experience of online shopping, consumers expect personalization, with best-in-class service and greater transparency on product and price than they typically would at physical stores.
- E-commerce means managing numerous variables. Online retailers typically manage a vast inventory of products and each order is delivered to the customer’s home. At Well.ca, we offer more than 40,000 products online, versus 1,000 in our brick-and-mortar locations. Daily operations are much more intense with the picking, packing and shipping of individual orders plus higher volumes of post-purchase customer care.
- ‘One size fits all’ marketing doesn’t work. Traditional retailers send out one mass flyer a week. E-commerce requires personalized marketing e-mails sent at a frequency and volume determined by individual customers, regular marketing and merchandising updates, as well as the constant evolution (and cost) of search-engine optimization and marketing, not to mention managing content on affiliate sites.
- Geography shrinks profit margins. The cost of picking and packing thousands of goods is no different than paying store employees, but the cost of distribution to individual homes across our huge country is a much greater cost to the retailer.
It's easy to dismiss this inertia among Canadian retailers as a natural reaction to these challenges. Some critics suggest that Canadians simply aren't ready, or aren't interested enough in online shopping to make it worth the cost for businesses. To that, I say: If you build it, they will come.
When I look at my company's rapid pace of customer acquisition and customer loyalty that have been generated by our online business, I see vivid proof that the appetite for e-commerce in Canada is hardy. The Canadian consumer is ready.
The current dearth of Canadian e-commerce is a lose-lose situation for all. As more Canadians flock online to shop, they will easily find comfort in and affinity with big, foreign-owned companies that already have an established online presence. Unless, of course, the nation's retailers are willing to take a chance on self-disruption.