Our fear of buying things online officially died when banks opened their virtual doors, according to Anthony Chan, a lecturer on business and information technology strategy at SFU. Once we started to get comfortable paying bills in our pyjamas, there was no going back. The e-commerce floodgates opened.
Small businesses online are no longer eyed with suspicion—it’s open season for customers around the world. And thanks to lower-cost e-commerce software like Shopify and 3dcart, an increasing number of traditionally brick-and-mortar companies in Vancouver are doing business this way.
According to Statistics Canada, 51 percent of Canadians ordered goods or services online in 2010, totalling about 114 million orders and $15.3 billion.
Neighbour, a men’s clothing and lifestyle store based in Gastown, does about a fifth to a quarter of its business online, according to owner Saager Dilawri. “Most of our [online] sales actually come from New York City, and then second Toronto, and then L.A.,” he tells the Georgia Straight at Neighbour.
But there are challenges. According to Chan, an online store costs time and money (from a couple thousand to tens of thousands of dollars) to start up, and at least a couple hundred dollars a month to maintain, so small businesses need to weigh the costs and benefits carefully.
Find your niche
Because they sell in large volumes, big e-commerce-based vendors like Amazon have a cost advantage over small businesses, Chan says. “The challenge for small business is, if you’re not in the volume distribution business, what is your competitive advantage?” Small stores that do well online tend to sell something buyers can’t get anywhere else, he says.
At Neighbour, the items that sell like hotcakes online are the ones that are really hard to find in North America, Dilawri says: “People will seek you out.”
Do not forget your local customers
Convenience is a huge motivator for people to shop online, Chan says. Online Christmas shopping, for instance, allows people to avoid the major time and stress of shopping in person.
Shopping in a store can be intimidating or confusing for some customers, Dilawri says. Maybe this is why Statistics Canada found that 74 percent of Canadian Internet users e-window-shopped in 2010. Products and prices are laid out in an organized way, with zero sales pressure attached.
Vancouver-based coffee roaster 49th Parallel does 20 percent of its business online, with customers from around the world, says owner Vince Piccolo. But more than a third of that is local sales. Time and gas considered, “it’s cheaper for you to buy a pound of coffee online than to drive all the way from White Rock to our roastery in Burnaby or one of our stores in Vancouver,” Piccolo told the Straight by phone.
Don Dickson sees the same phenomenon. His shop, South China Seas Trading Co., sells hard-to-find ingredients and other goods from around the world, such as fermented black garlic, five kinds of cinnamon, and wild fennel pollen. He’s had a solid customer base across Canada for 25 years but is surprised at how many locals order for delivery, he told the Straight at his store on Victoria Drive.
His online store, launched mid April, has been a long time coming, he says.
Dickson considers e-commerce a business-building move, and he hopes it will expand his Canadian customer base.
Build a brand online
A key reason for opening South China Seas’ online store was to show customers the full range of products and services on offer, including the company’s tailored design and branding for each product. Dickson hopes the new site will help make South China Seas and its sub-brand Globavore into “more viable, saleable brands”.
“If you’re going to do it [sell online], then I think you have to do it in a way that reflects the culture of your business,” Dickson says.
Serve customers better
Now that we’ve got the basic buying and selling down, customer service is the next frontier, Chan says. Companies are finding innovative ways of catering to customers. He sees some of the more technologically savvy brick-and-mortar companies adopting hybrid models, such as allowing customers to buy products online and have them shipped to a store for pickup. Instant-message help online, apps, and social media continue to develop as methods for businesses to connect with customers—ways of expanding their brand and offering customers personal guidance, deals, and contests.
“Creating value for the customer is more than just delivering a product,” Chan says. “It’s also about engagement with the customer…and the ability to provide the right product for the right person.”
Vancouver businesses need to “think of e-commerce as a new channel to serve your customers better,” he says.