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eCommerce – The State of Retail Today

History

The state of the Canadian retail industry can be more fully explained with historical context. A great shift in Canadian retail began with the opening of box stores and most importantly when USA retail giant Walmart entered Canada with the purchase of the old Woolco stores in 1994. With discount products available at Walmart, there was downward price pressure placed on other retailers.

In order to survive retailers could no longer “sit in the middle”. Retail stores had to move to greater value or unique products and/or upscale brands. Probably the most notable retailer who tried to stay “in the middle” too long was Eatons which went into bankruptcy in 1999.

From about 2000 to 2006 the influence on Canadian retail from the larger category and discounter bricks and mortar retailers continued (online internet sales in Canada was about 3 years behind the USA retailers). During this period, the smaller retailer could still be successful with a strong brand or unique & hard to find products not carried by the larger physical store retailers. However in the 4th quarter of 2006 something began to change in Canadian retail and things were about to undergo the greatest shift yet!

 

Possibly The Greatest Shift Yet

The USA was ahead of Canada with internet shopping, however in 2006 Canadians heavily increased their shopping online. For the physical retailer, the competition with the larger discounters and box stores was now accompanied by non-physical “Gorilla warfare” internet stores. There was also an influx of online auction sites like eBay and listing services like Craigslist.

These internet stores and selling sites with little overhead (it can cost $50,000 to $300,000 to leasehold a new store and rents are often $4000 to $20,000 per month for smaller stores) and nimble brand positioning were able to offer unique products, often at a more affordable price then the physical based retail stores. So the physical retailers were now competing against the small nimble online stores and the larger value sellers.

 

Can’t Beat Them, Join Them!

In today’s retail environment, retail stores with a unique proprietary product and brand might still be successful, but other retailers without some type of internet eCommerce presence are going to find their product selling under threat by the increasing online stores and discounters on both sides of them.

The good news is that retailers are advantageously poised to sell online. They already have a customer base, products, information about products & hopefully images. If they operate their online sales out of their store, they can also have their internet operation running with little or no overhead. I have seen stores increase overall sales by 20% with little additional investment.

If you would like to discuss or increase your store’s online presence, please follow this link.

Garrett Hall is a retail and online consultant with eosFirst.com located in Oakville, Ontario. Garrett brought his own retail business from 70,000 to 7.5 million dollars in sales. He eventually sold his business to a large retail company. He is currently using his expertise to help other retailers across North America set up and optimize their online selling.

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Garrett Hall is an online marketing & development expert with eosFirst AuroraCon. eosFirst is a website design, online development, online marketing and information technology consultancy.

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