With doom and gloom predicted for small retailers who lack online identities, why are so many hesitant about going digital?
"It's really that high? Wow." Randy Yoshida is surprised to hear how many of Canada's small retailers lack their own websites. Since Your Vitamin Store's site shut down in 2008, "it feels like we're the only business that's not online."Mr. Yoshida started selling supplements in Vancouver's upmarket Kitsilano neighbourhood in 1989.
Mr. Yoshida far from alone: More than a quarter of the country's 190,000-plus small retailers don't have websites of their own, if recent studies by the Retail Council of Canada and the Canadian Federation of Independent Business are anything to go by.
With dire consequences widely implied for retailers that aren't in the digital game, why are tens of thousands still standing on the sidelines? Surveys by Ipsos MediaCT and Accenture indicate that more than 70 per cent of Canadians research purchases online before buying in a store, with the web named as the most influential source of gift inspiration. Then there's Google Canada's 2014 Holiday Shopper survey, which found that 56 per cent of Canadians visit a store within one day of a search on their smartphones.
Technological alienation and discomfort, uncertainty over the role of cyberspace, and a lack of resources have all been blamed for retailers' digital hesitancy since web development hit the mainstream in the mid-1990s. But industry experts say these factors have become more nuanced in recent years as digital participation has evolved alongside online marketing technologies and strategies.
Mary-Ellen Mitchell says she sidestepped her trepidation more than a decade ago when she decided against launching a website for Dressers, a contemporary gift and fashion boutique on Toronto's Roncesvalles Ave. "I thought about a website in the beginning, but you had to buy your domain name, and I would have had to update the site or pay someone to do it. So I didn't bother. I was too busy back then and I'm too busy now."
It's not an aversion to new technologies that holds many retailers back, but rather the time required to maintain them, says David Soberman, a professor of marketing at the University of Toronto's Rotman School of Management and the Canadian national chair of strategic marketing. "These days, for a relatively reasonable amount of money, small retailers can create websites that customers will find interesting and helpful. Depending on their business, this may be a crucial step. The problem is that these websites need to be maintained, updated, and feature some kind of interactivity. When customers try to contact retailers via their websites, that interaction has to occur within a reasonable amount of time. Do retailers really want to pay someone to sit by a computer, and do the people they're hiring have those skills?"
These operational pitfalls aren't obvious, Mr. Soberman says, especially when most of ownership's time is taken up with bricks-and-mortar business. "It also creates a monitoring problem. If you hire someone to work on a computer in the back, how do you know what they're doing? How long does it really take to update the website and respond to customers? These questions can be difficult to answer; even large corporations struggle with them."
Mr. Yoshida can relate. Your Vitamin Store's website launched in 1999 with an outside contractor at the helm. Then, in 2008, "the woman who ran it just gave it up. We looked around and said, 'What do we do now?' Mail-order was getting so competitive – it's at the point where I stay away from brands sold online – so we just decided to let it be."
Does Mr. Yoshida worry about his online absenteeism? "Most of my customers are in the vicinity, and they like coming in," he says. "I'm not saying a website would affect that relationship, but it just seems irrelevant."
It's true that certain aspects of face-to-face retailing – customer recognition, up-selling and impulse buying, to name a few – are "much tougher propositions online," says Michael LeBlanc, the RCC's senior vice-president of digital retail.
But that doesn't overshadow the value of digital marketing, he adds. "With a product like Google Search Marketing, for instance, you can turn it on and off when you reach capacity or when you need a boost during slow periods. I was talking to a snowboard retailer about this; if they hear it's going to snow on the weekend, they can pump up their search marketing a few days beforehand."
But despite the rise of what Mr. LeBlanc calls "truly compelling tools," budgetary concerns and time constraints – which are one and the same for most retailers – still cause widespread hesitancy. "A lot of small retailers are really worried about making the wrong choice when it comes to digital marketing," LeBlanc says.
The common perception that large corporations rule the roost doesn't help. "When small businesses read about digital marketing in the popular press, they have a hard time seeing how it applies to them," says Chris Hodgson, the head of retail and tech sectors at Google Canada. "The hesitation is frustrating because there's so much opportunity."
If a retailer has survived this long without a digital identity, what could convince it to forge one now? The answer, Mr. Hodgson says, lies with recent high-tech innovations. "Ten or even five years ago, there was a lot of confusion about building a website and advertising online. There were a lot of different platforms and tools, and it was complicated getting them to work. But it's become increasingly easy for a retailer to build and control their digital presence."
This is the focus of Retail Spark, a new partnership between Google Canada and the RCC comprised of online tutorials and tools, as well as a series of workshops in Toronto, Vancouver and Montreal that wrapped up in late November.
The two services at the heart of the venture, Google's mapping and search-engine applications, help Canadians discover and support small retailers, Mr. Hodgson says. "Without that presence, it makes it increasingly difficult to generate awareness of your business."
Websites remain "incredibly important" as landing pads for consumers who click on listings and ads, Mr. Hodgson continues, but retailers can start by listing their phone numbers, addresses, opening hours and so on, and then "gradually building out from there with a website and more capabilities."
Retail Spark isn't the only industry effort to encourage digital involvement. The CFIB, for instance, unveiled the Shopsmallbiz.ca directory last year to connect small business owners with consumers and other firms looking for local deals.
Social media and third-party listing services can also precede, and sometimes supplant, websites. Take Bell's Bookstore Café in Calgary: It has never had one, manager Kaitlin Bell says, but its Facebook page "is more useful than going through all the hassle of building, maintaining and paying for one."
Indeed, of the 53 per cent of RCC members that say they use social media to promote their products, more than two-thirds surveyed have seen a positive return on investment, and more than half plan to boost spending.
Shoppers, meanwhile, won't have trouble finding basic information about Bell's, Dressers or Your Vitamin Store online, as Google searches for all three yield Yelp, Yellow Pages and Google Plus listings, among others, that ownership did little to create.
Ultimately, retailers must ask themselves two questions, Rotman's Mr. Soberman says: "What do you want your online presence to achieve and where is the value it can create? The answers will push them in the right direction."
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