Small Businesses Face a New Retail Reality as Online Giants Reshape Main Street

THUNDER BAY — Locally owned small businesses in Thunder Bay, Dryden, Kenora and across Northern Ontario are facing a retail environment that has been changed by COVID-19, online shopping, Amazon, big-box delivery systems and ultra-low-price marketplaces such as Temu.

The challenge is not just price. It is convenience, visibility, shipping speed, consumer habits and the decline of casual foot traffic in malls and downtown districts.

Local retailers cannot win by copying Amazon — they need a different playbook

Statistics Canada says retail e-commerce sales reached $5.1 billion in February 2026, representing seven per cent of total Canadian retail trade. That figure does not capture all spending by Canadians on foreign-based online platforms, meaning the full pressure from global e-commerce is likely larger than domestic retail data alone shows.

For small businesses in Northern Ontario, the impact is visible in shopping centres, downtown storefronts and business improvement areas.

The Fort William BIA and Waterfront District BIA recently raised Northern, rural and construction-related business pressures at an Ontario Business Improvement Area Association conference, including the challenges facing small businesses across Northwestern Ontario.

The issue is not that local customers have stopped caring about local business. It is that consumers have been trained to expect instant comparison shopping, visible inventory, online reviews, fast delivery, easy returns and low prices.

There are some pretty amazing examples of businesses that get it.

Sencia Canada which is a Thunder Bay based technology company offers web hosting. NetNewsLedger is hosted at Sencia. That means local people providing customer support. It means skilled local “Digital Experts” are available for technical support when you need it.

3Ride in the Goods & Co offers a great mix of online sales and amazing in store customer service. They offer a wide range of bikes and accessories for the beginner to experienced cyclist. Brad and his team are friendly, and knowledgeable. Local matters when you need help.

Maier Hardware is another traditional hardware store. Honestly when you need something, they are there, and unlike the big box stores, they are right there to help. Their Simpson Street location offers some of the best selection of barbecue and paintball supplies in the region. Great helpful staff and always there to help.

There are lots of amazing businesses in our city – Mentioning only three is to just start you, our readers thinking about what are your personal favourites.

They all face challenges, and all deserve your support.

A locally owned retailer that depends only on walk-in traffic is now competing against a digital storefront that never closes.

Small business still carries much of the Canadian economy

Small businesses remain central to Canada’s private-sector economy. Innovation, Science and Economic Development Canada says that, as of December 2024, Canada had 1.08 million small employer businesses, representing 98.2 per cent of employer businesses in the country. Small businesses employed 5.8 million people in 2024, or 46.6 per cent of Canada’s private-sector workforce.

Retail is a major part of that picture. ISED reports there were 98,812 employer businesses in retail trade in December 2024, and 98 per cent of them were small businesses. Retail also remained one of the largest sources of small-business employment in Canada.

That matters locally because small businesses are more than storefronts. They are the places local residents go when they seek businesses to sponsor teams, employ students, buy local services, support fundraisers, keep downtowns active and help define the character of communities.

In places such as Thunder Bay, Dryden, Kenora, Sioux Lookout, Fort Frances, Red Lake and Marathon, the loss of a small retailer can leave a gap that is social as well as economic.

Across the region there is also the issue of banks closing their doors in some communities.

The cost squeeze is real

Small retailers are being hit from several directions at once. The Business Development Bank of Canada’s 2025 State of Entrepreneurship Report says entrepreneurs are navigating rising costs, declining demand and increased competition.

Statistics Canada’s outlook for rural and small-town businesses in the first quarter of 2025 found inflation remained the most commonly reported obstacle, cited by 43.3 per cent of rural and small-town businesses. Cost of insurance, cost of inputs, labour pressures and supply-chain issues were also identified as major concerns.

Those pressures are amplified in Northern Ontario. Freight costs, smaller local markets, winter weather, highway delays, staffing shortages and limited access to specialized services can all make it more expensive to operate than in larger urban centres.

The digital gap is no longer optional

For many small businesses, a website still functions mainly as an information page rather than a true sales channel. The Canadian Federation of Independent Business has warned that this gap is a missed opportunity as customers become more accustomed to online shopping.

That does not mean every shop in Thunder Bay or Kenora needs to become a full-scale e-commerce company. It does mean customers should be able to find accurate hours, current product information, photos, pricing where practical, contact options, parking information, return policies and order methods quickly from a phone.

At minimum, every local retailer should make sure its Google Business Profile, website, Facebook, Instagram and online listings are accurate.

Wrong hours, outdated phone numbers or stale social media posts can send a customer directly to Amazon, Walmart or Temu.

Compete on trust, not just price

Local businesses will rarely beat global platforms on the lowest possible price. The better strategy is to compete where online giants are weaker: personal advice, product knowledge, repairs, service, installation, local warranty help, customization, community trust and immediate pickup.

A Thunder Bay outdoor retailer, for example, can explain what actually works in Northwestern Ontario weather. A Dryden gift shop can curate products tied to local identity. A Kenora business can connect products to lake life, tourism and cottage-season needs. A local hardware, clothing, pet, book, bicycle or sporting goods store can offer advice that a warehouse marketplace cannot.

The key is to make that value visible. Local businesses should explain why a product is worth buying from them: better fit, safer use, longer life, local support, easier returns or expert setup.

Make shopping local as convenient as possible

Convenience is now part of the product. Local retailers can strengthen their position by offering options such as online ordering, phone orders, curbside pickup, local delivery, same-day pickup, after-hours pickup lockers where possible, text-based customer service and simple return policies.

In smaller Northern communities, businesses can also work together. A downtown cluster in Dryden or Kenora could create shared delivery days, joint promotions, seasonal shopping maps or bundled tourism packages. Thunder Bay BIAs and mall operators can support retailers by co-ordinating events, parking information, holiday campaigns and “shop local first” messaging.

The Ontario Business Improvement Area Association has launched a “Shop Main Street Canada. Support Local” campaign, arguing that money spent at local businesses supports jobs, entrepreneurs and the character of neighbourhoods.

Use local identity as an advantage

Northern Ontario businesses should not hide where they are from. Regional identity is a strength.

Customers increasingly want products with a story: locally made goods, Indigenous-owned businesses, Canadian suppliers, Northern-tested gear, Lake Superior art, regional food, local books, handmade items, repair services and products that reflect the community. These are areas where mass marketplaces are weaker.

Businesses should clearly label local, Canadian-made and Indigenous-made products where accurate and appropriate. They should tell the story of suppliers, makers and staff. That creates a reason to buy beyond price.

Events can rebuild foot traffic

Downtowns and malls need reasons for people to visit. Retailers cannot rely only on passive storefront traffic.

Workshops, product demos, night markets, sidewalk sales, repair clinics, book signings, tasting events, pop-up partnerships, loyalty nights and seasonal festivals can turn shopping into an experience.

In Thunder Bay, that could mean stronger connections between local restaurants, cafés, shops, galleries, entertainment venues and waterfront events. In Kenora and Dryden, it could mean linking retail more directly to tourism, fishing, boating, festivals and regional travel.

The goal is not nostalgia for the pre-COVID retail model. The goal is to give people something online shopping cannot provide: community, discovery and personal connection.

Owners should measure what works

Small businesses often run lean, but basic measurement matters. Owners should track which products drive margin, which promotions generate sales, which online posts create calls or visits, and which hours actually match customer demand.

The most important numbers may not be total sales alone. Gross margin, average transaction size, repeat customers, inventory turnover, return rates, website visits, email subscribers and loyalty-program participation can show whether a business is building resilience.

A small retailer does not need enterprise-level software to start. A simple point-of-sale system, customer email list and monthly review of best-selling products can help owners make better decisions.

What small businesses can do now

The practical strategy for locally owned retailers is clear: be easy to find, easy to contact, easy to buy from and worth choosing.

That means updating digital listings, posting useful product information, offering pickup or delivery where possible, building customer lists, improving displays, training staff on product knowledge, working with neighbouring businesses, telling local stories and focusing on service that online platforms cannot match.

For BIAs, chambers of commerce and municipalities, the work is broader: improve lighting, signage, parking clarity, public safety, sidewalk maintenance, event programming, beautification, procurement opportunities and support for digital adoption. Main Street success is not only a business-owner responsibility; it is also a community-development issue.

Historical context: COVID accelerated a shift already underway

COVID-19 did not create e-commerce, but it accelerated the shift. During restrictions, many customers learned to buy groceries, clothing, household goods, pet supplies, gifts and electronics online. Once those habits formed, they did not disappear.

The next phase will be harder. The novelty of “shop local” messaging is not enough on its own. Local businesses must combine community loyalty with professional digital tools, strong service and clear value.

For Northern Ontario, the stakes are high. Strong local businesses help keep downtowns occupied, malls relevant, young people employed and community dollars circulating close to home.

The businesses most likely to survive will not be the ones trying to out-Amazon Amazon. They will be the ones that make local shopping easier, more personal, more trusted and more connected to the communities they serve.