E-commerce in a post-pandemic world
Will shoppers rush to return to retail stores, or opt to order online?
WATERLOO REGION — Like a lot of retailers, Marina and Mark Nunes use their website and social media accounts to draw customers into their Waterloo store.
Shopping for clothes, after all, has traditionally lent itself to an in-person visit. The Nunes’ online presence can show off a new collection at the store that bears Mark’s name, or connect a customer to a sales associate, but it’s not set up for direct purchases.
“To be honest, our customer base is the customer who’s going to come into the store,” Marina said. “That’s why we haven’t been in a rush.”
But when pandemic restrictions are eased, and people are allowed to go back into stores, a big question remains. Will they want to?
It’s a question that has Marina vowing to introduce a sales component to the Mark Nunes website soon. “It’s one of the first things we’re going to change about our website.”
Mark said they’ll also be adding one-time detailed measurements — with advice on how to do that at home — to a database so that a customer’s orders can be tailored before being delivered. The goal is to give clients “the buyer’s experience from anywhere,” Mark said.
Marina doesn’t know whether a full e-commerce site would have made a world of difference in the past few weeks; customers invited to browse via Instagram and order via phone or email have mainly been purchasing gift cards or hand-sewn masks.
Going forward, though, it would provide their customers with another option. “It might make a difference,” Marina said.
Consumers across Canada have embraced e-commerce in recent weeks, and while it’s far from a new concept, there are a lot of online rookies — shoppers and business owners alike — trying to find their way.
E-commerce was already on the rise, accounting for roughly eight to 10 per cent of core retail in Canada, said Michael LeBlanc, senior retail adviser for the Retail Council of Canada. Now, “in some categories, it’s been advanced years, not months,” he said.
Groceries are the prime example. Before COVID-19 struck, online purchases accounted for less than two per cent of all grocery sales. LeBlanc estimates that’s jumped to 10 or 12 per cent, “and that’s probably low.” Experts had previously thought online grocery sales might reach four to five per cent in four or five years. “That’s been advanced like a wormhole of time,” LeBlanc said.
For retailers with an established e-commerce presence, it can be a lifeline at a time when many brick and mortar locations remain closed. For some, even that won’t be enough to survive the pandemic. Others, like Mark Nunes, are using technology as best they can to attract business and stay in touch with customers.
“We know there’s certainly interest in exploring online sales as another option,” said Corinne Pohlmann, senior vicepresident of national affairs for the Canadian Federation of Independent Business.
“Human interaction has always been important to smaller businesses,” she said. “That piece of it is not going to go away, but it may take a little more time.”
Fortunately, technology has made it easier for businesses to offer online shopping; whether a site is user-friendly, or whether a business can meet or manage customers’ expectations, are other questions entirely.
“This is a dynamic dance,” said Sarah Wilner, an associate professor of marketing at Wilfrid Laurier University’s Lazaridis School of Business and Economics. “Retailers and shoppers alike are all coping with a new normal, or a temporary new normal.”
Experienced online shoppers may be frustrated by shipping delays as companies struggle to keep up with demand. Rookies may look at the wealth of products they can order from their home and think “it’s a candy store,” Wilner said.
How do you cater to everyone? “It’s a challenge, and I feel for all retailers,” she said.
Some of the complications right now, like delays or shortages, may be short-lived, as couriers adapt to high volumes and goods are redistributed. Many food products, for example, were packaged for bulk delivery to restaurants or commercial kitchens; when many closed suddenly, demand there plunged just as it spiked on the consumer side, leaving suppliers scrambling to repackage and reroute deliveries.
Moving forward, e-commerce will likely mean different things to different sectors, said Martin Qiu, also an associate professor of marketing at the Lazaridis School of Business and Economics. Categories where online shopping has already been popular, such as books and electronics, will see retailers’ positions further reinforced, Qiu said in an email. Customers who would normally shop for items like clothing or sporting goods in-store may be forced online as temporary store closures persist.
And for categories which previously had few online sales, like groceries or home improvement, “some shoppers start a test drive online, and if the experience is good, they may continue to do so after the pandemic is over,” Qiu said.
One challenge with online shopping in Canada has long been ‘last kilometre delivery,’ or the costly final leg to get the item to the door. Qiu expects more retailers to adopt alternatives, such as in-store space for pickup of online orders, or third-party community lockers where couriers can do batch deliveries.
While it depends on the individual, Wilner believes many shoppers will ultimately return to stores, but it will take some effort on the businesses’ part. “Retailers will not be able to go back to the way it used to be,” she said. “Motivating me to get out there will have to take something exciting.” Experiential marketing, special events and pop-up shops may be the carrots that retailers dangle.
“We call this period ‘business as unusual,’” the Retail Council’s LeBlanc said. “Retailers are going to rewrite the retail playbook as we go along.”