THUNDER BAY – Online shopping lets consumers choose from an almost limitless number of products and allows them to pick and choose based on the best price. This presents challenges for traditional retailers.
Services like Amazon.ca and Amazon.com are growing extremely fast.
Between fair pricing, reliable delivery, and almost unlimited choices, the online marketplace is positioned with some real advantages. Those advantages present additional challenges for the traditional bricks and mortar shops and services, especially in Thunder Bay.
Thunder Bay being so close to the border with the United States presents some special challenges for local retailers. Many companies in the United States offer free shipping within the continental US. Customers can use Ryden’s Border Store as their mailing address and take advantage of those savings.
Even with the weak Canadian dollar compared to the US dollar, hundreds of people are ordering online and making a trip south to the border to pick up their purchase. Often that trip can be a net benefit as people fuel up in the United States and pay a lower gas rate too,
The Internet is changing how people shop. Some of the major retail stores across North America are being forced to downsize because of changing consumer shopping practices.
Social media is leading a surge of change in shopping habits too. Facebook ads for example offer relatively inexpensive ways to reach a marketplace. Have you ever searched online for a product and then noticed how your Facebook ads are related?
The shift in technology is being adopted very rapidly by newer companies and by some but not all the traditional Fortune 500 companies.
The impact of big box stores has influenced the retail market for a long time. It is likely equal in many ways to the chain stores, often all owned by the same companies in the shopping malls. Shopping Malls are likely at risk in many cases of losing some of their anchor retailers as the number of consumers continue to grow.
The real bigger box store is the Internet. There is an unlimited number of options for consumers on a massive scale of products.
If you are old enough to remember Consumer’s Distributing which was located at Intercity back in the days when it was a strip mall, their business model was to not have a large showroom, but you ordered from the catalogue at the front of the store, and they brought you the product out from the warehouse.
Today, companies like Amazon are doing that from major warehouses in cities like Toronto, where they are offering same day delivery of your order. The company is working to have drone delivery to homes and businesses.
If you think about it, back in the day, the Eaton’s and Sears catalogues and mail order shipping was very common. Across Canada people scanned the catalogue, mailed in their order and waited for it to arrive.
Today with technology, the difference is it happens far faster.
Electronics, especially computer accessories are one consumer good where the Internet offers a variety that no retailer could really try to stock. Amazon.ca as a focal point for example allows a purchaser easy access to find and source a wide variety of products, and to track the purchase as it arrives at your door. Many of the products include free shipping, which takes away some of the advantages that local retailers have had in the past.
Order an Apple computer for example, and within a week, that product will be shipped from the factory in China, to Osaka Japan, on to San Francisco, and then to Toronto and finally to Thunder Bay. The speed of delivery to customize your order means you can get your own computer the way you want it fast.
Clothing is a product that many likely wouldn’t think online shopping could dominate the retail bricks and mortar shops, but with a growing number of people that is exactly what is happening.
What does it mean for your business?
It means embracing change. Take social media, online shopping and see them as opportunities not as opponents. Offer return policies, prices and price matching where possible.
Let your business become far more innovative.
Recently, I purchased a computer adapter. I visited three local shops. The goal was to purchase locally. The piece I first wanted was in Thunder Bay, however online reading reviews online, I realized that product likely would not do what I wanted it to do, and many of the purchasers were not happy with their purchase.
That led to making another choice, and the product which had the best reviews was not available locally. That left few choices when it came to choosing which product to purchase.
Many companies are starting to see the impact of change in the retail market.
Often perhaps consumers may come to your shop to see or even try on the clothing they might end up purchasing online. If your pricing is close to the online price, chances are you will make a sale. If not, your company is simply the fitting room for an online retailer and you are going to fall further behind.
Make sure that your business shares your sponsorships, community engagement and involvement as widely as possible. Promote your community efforts.
There are solutions for local businesses, some of those solutions will likely widen the marketplace for local companies. The marketplace today is global, embracing that market will mean greater opportunities.
Embrace it. The future of your business likely depends on it.