The state of Canadian e-commerce: it's time to get better in the face of adversity

Friction within an oversaturated online market leading to the need for retailers to truly differentiate themselves from competitors >> By Sean Tarry

It doesn’t really matter how anyone might look at the current situation for small businesses operating across Canada, it’s not a favourable one when considering their future growth and success. And, given the fact that the majority of brands operating within the ecommerce space are small businesses, the state of online retailing in Canada is not currently being represented in the best of light. It’s something that’s recognized by David Nagy, digital pioneer and Founder of eCommerce Canada, who cites a number of different factors that are currently challenging the online efforts of retailers across the country, including a hesitant Canadian consumer, volatile economic conditions and an unpredictable supply chain. However, he also suggests that it’s during times like these when great businesses are at their best.

“When you look at it, it’s obvious that the market isn’t really super-friendly for small businesses at the moment,” he says. “There are a lot of things that owners are challenged by at this particular moment, including an enormous amount of debt that they’ve been carrying since the pandemic, a somewhat reluctant consumer, and uncertain economic climes. But it’s when facing such adversity when the very best find inspiration to get better, to improve what they do in some small, meaningful way. And, the reality is, the best have got to get better to succeed. There’s a lot of friction in the market at the moment, and the consequences for those who don’t get better might be more severe than they have been in a long time. So, those who continue to innovate and improve will be those who come out on the other side of this on top.”

Oversaturated online market

Part of the challenge that businesses operating online today face, explains Nagy, is the fact that there are so many competitors, both direct and indirect, to just about every single type of offering that there is. He suggests that with so many competitors, current challenges are being exacerbated, making it far to easy for some businesses to get lost in the crowd. To combat this, the e-commerce guru says that retailers need to really hone in on what sets them apart, creating a bit of breathing room for them online.

“It’s so oversaturated online right now,” he asserts. “The barrier to entry today is so remarkably low that every business can get online with minimal investment of finances or time. And every business is getting online. They’ve been told by everyone that they have to be online or they’re going to miss out on sales, and therefor revenue for the business. However, being online today means very little unless the retailer is doing something a little differently than the thousand other online retailers that are selling exactly what they’re selling. When going online, it’s critical today for retailers to find the thing that differentiates them from their competitors and focus on that part of their offering with consumers. It could be anything from the way products and materials are sourced to the service that customers receive online. But finding that differentiating quality that helps separate businesses from all others should be on the minds of all retailers as we head deeper into 2024 and beyond.”

Pendulum shift

Nagy continues by saying that, as a result of the extreme oversaturation of retail brands operating online today, the old adage that suggests an online presence “levels the playing field between smaller retailers and their larger competitors” just isn’t true anymore. The pandemic, which brought with it an accelerated digitization of the world around us, has facilitated much of the growth in the number of businesses moving their products and service online. What this has done, says Nagy, is erode the online sales of many retailers that did not adapt and react quickly enough when the flood to online began in 2020.

“The profitability of small businesses has been kicked in the teeth over recent years,” he asserts. “The number of retailers selling their wares and services online has doubled as compared to prior to the pandemic. It’s made things incredibly challenging for everyone. And, as we head further into 2024, expect to see an increasing number of insolvencies, because businesses across the country just can’t hold up to the financial pressures any longer. But I really believe that within industries and markets, there’s a pendulum effect that is always at play. The tenor of these times might be that of trial and adversity. But just down the road, just beyond the horizon, there are opportunities for those who don’t panic and continue to maintain focus on their differentiators and core offering. Don’t try to solve the revenue problem by throwing another $25,000 at Google ads. Lift the hood on your online operation, and look for the things that are holding you back.”

Prepare for opportunities

In order for a small business to perform a proper assessment of its online performance, it would likely want to confer with experts like eCommerce Canada. Organizations like theirs helps retailers understand the metrics that really matter to their business, and identify ways by which to enhance and improve their websites for optimal success and increased traffic and conversions. It’s an assessment that Nagy says is becoming more imperative every day for small businesses looking to find growth and success online. And, he adds, it’s an assessment that he believes may be the most meaningful way by which small businesses across the country can position themselves to seize on a number of opportunities that may be just around the corner.

“When that pendulum shifts back the other way, retailers are going to want to be ready. In order to in this mode of readiness, they’re going to need to prepare their businesses. They’ve been rolling with the punches for what seems like a very long time now. They’ve stayed alive, keeping the lights on without any evidence of any real opportunities. But opportunities will roll around again, and when they do, those are prepared to capitalize on them will be the ones that reap the greatest benefits. Part of that preparation by retailers involves continuing to develop that deep understanding of the customer they serve, what it is that the consumer is looking for from their shopping experience, and focussing on delivering it to them by leveraging the businesses core strengths. The adversity that everyone’s facing at the moment will subside. And when it does, those that have stood in the face of it will be better because of it and ready to be one of the first around the corner to brighter days for business.”