Canada: The Online Debate
March 28, 2014 - 11:23am
Should you go online as a small retailer? Or stick with your storefront?

Online shopping continues to resonate with small retailers worldwide. Canada is no exception. Citing Statistics Canada, Retail Makeover CEO Barbara Crowhurst says 71 percent of Internet users in Canada use the Web for online shopping and in 2014, 53 percent of all retail sales will be done online.

As online shopping became the norm, the “showrooming” phenomenon, when consumers research products at a brick-and-mortar store and then shop online for a lower price, started to rear its head. This made small retailers without an online presence sweat. So the question became: to sell online or not?

Yes, Sell Online
With such staggering statistics about online shopping in Canada, Crowhurst asks: Why wouldn’t you want a piece?

“The idea of searching online for ‘best price’ is a given, but as a brick-and-mortar retailer, the way that you do business is that you create and maintain relationships with your customers  — that will never change,” Crowhurst says. “You have to look at your strengths — product knowledge, relationship-building, etc. — and use an online store as a supplement.”

Crowhurst, who is based in Canada and has worked with many small lighting retailers, says the ”fear factor” of going online into uncharted territory is one of the biggest challenges. Many retailers lack the in-house capabilities to create an online store, in which case they will need to contract the work out, but the best thing to do when starting out is treat it as a test — only put your top sellers online and see how it goes.

No, Stick With Your Storefront
Is having a presence in the online marketplace necessary?

Maybe not. For one thing, showrooming may not be as big of a problem as initially thought. A recently published Business Insider Intelligence report finds that ”reverse showrooming,” when consumers go online to research products and then head to a traditional brick-and-mortar store to complete their purchases, is actually more common than showrooming. According to a Harris poll, 69 percent of people reverse showroom, while only 46 percent showroom.  

Amazon remains the popular destination for reverse showroomers who buy elsewhere and social media has also become a major referral source for brick-and-mortar stores.

Also in the report: Only recently have offline retailers begun to capitalize on this trend. They’re realizing that they have a lot to offer as long as they can integrate offline and digital, plus provide convenience that online retailers cannot, namely through a knowledgeable sales staff and in-store
pick up.

Retailers should figure out whether they can reproduce over the Internet much of what makes them special as an independent retailer before they decide to sell online, says Suzy Teele, SnapRetail COO.

“For instance, a retailer may offer design consultation with the lighting selection. Can that be offered online as well?” Teele asks. “Many retailers chose to employ a ‘shop online, pick up in store’ strategy. This has multiple benefits, as our research has shown that 78 percent of the time, when someone goes into a store to pick up a purchase, they buy additional products. With this strategy, a retailer can have a loss leader that they sell online at a competitive price, knowing that they might make up the cost if the item is picked up in-store.”

Other things to consider, according to Teele: Independent retailers typically don’t buy deep, so they may not always have the inventory to fulfill online orders.
Then there can also be issues with returns, breakage, shipping, etc.

“Sometimes, a well-designed website that showcases the store or product can achieve the same goals as an online store,” Teele says.

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