BC Business
E-comm in 2014 | BCBusinessCanadians have shown that they want to shop online, and in 2014, large and small retailers alike will have to cater to this appetite.
With the prospect of modest sales growth in 2014, competition will be fierce. I believe Canadian retailers will be focusing their attention on: developing their omni-channel capabilities, e-commerce, mobile shopping, competition from foreign entrants, cross- border shopping and the rise of “shop local.” The biggest newsmaker in 2014 may be the evolution of Bitcoin. The divide between the bargain seeking consumer and the luxury shopper will heighten.
Many retailers still have separate departments for online and traditional sales. They also often use separate supply-chain processes and distribution centres for the two. Merging these to gain efficiencies is the key to gaining the benefits of customer-facing omni-channel opportunities.
The Black Friday event demonstrated that Canadians want to shop online, and Canadian retailers now fully understand the power of online. It’s also clear that effective e-commerce strategies are not exclusive to large retailers. A growing number of innovative solution providers and startups will offer independent retailers efficient and low-cost alternatives enabling them to compete with large merchants.
Rapid growth in use of smartphones to research and purchase goods is keeping many retailers awake at night, pondering how quickly this is changing the retail landscape. Opportunities exist for innovative and aggressive independents to out-perform their competitors.
Canadian consumers will be the winners. While some long-established large brands are struggling, many bricks-and-mortar leaders are investing millions in capital improvements to offer customers better in-store environments and experiences. There will be greater access to brands previously unavailable in Canada, potentially incentivizing Canadians to shop at home.
Until recently, the increase in duty-free thresholds, country pricing, inequitable tariff policies and a weaker U.S. dollar generated a marked increase in cross-border shopping. If the Canadian dollar continues to decline, more Canadians will stay at home to shop. The reduction and elimination of unnecessary tariffs will help Canadian importers and retailers. Retailers will be watching the next round of discussions on the Beyond the Border agreement with the U.S., which focuses on border security and the efficient movement of goods.
Local, independent retailers are often identified as the heart and soul of the community. Consumers want to support independents and expect them to provide excellent customer experiences, both in-store and online. Campaigns promoting the importance of buying from independent retailers will continue to increase at both the local and national levels.
At the same time established online merchants started taking Bitcoin for purchases, the Chinese government banned it for their online communities such as Alibaba. Who knows which way it will go, but it will make news whatever happens in 2014.
Retailers of all sizes will strive to make purchasing easier for their customers. Consumers will continue their pursuit of high-quality products at a lower price, while at the same time competition for the high-end luxury shopper will increase with the arrival of Nordstrom, Saks Fifth Avenue and Neiman Marcus.
Mark Startup is the vice-president of the Retail Council of Canada.