03/27/2013 12:16 EDT | Updated 05/27/2013 05:12 EDT

Canadian Retailers Must Get Online or Perish

hand holding plastic card on...

"Can I help you?"

"No thanks ... I'm not really here ..."

I was recently reminded of those opening lines from a 2011 Yellow Pages Group commercial of a small business that was losing customers because it wasn't online. I had just finished speaking with Kingi Carpenter, owner of Peach Berserk, who had closed her brick and mortar clothing store in favour of an expanded online presence, and in the process found both success and a better work-life balance.

This insight from Peach Berserk made me cautiously optimistic as I had chatted with several other business owners over the course of the last few months who said similar things. I was hopeful more retailers were starting to embrace an online business model to enhance or even replace their traditional sales structure.

Despite this fervent desire to find more Canadian businesses embracing online retailing models, statistics aren't bearing out that perspective. A recent small business survey conducted by RBC and Ipsos Reid found "only 46 per cent of Canadian small businesses have a dedicated website, and less than half (48 per cent) of those businesses say they sell their products and services through their websites."

Are Canadian companies not seizing the online opportunity because it's too small to chase? If so, then they haven't taken a close look at the numbers.

Statistics Canada (StatsCan) estimates there were 113.8-million online orders valued at 15.3 billion dollars in 2010, and a Deloitte survey projected that 65 per cent of Canadians would purchase between one to 10 gifts online this past holiday season. Moreover, StatsCan's survey of Internet use found that Internet shoppers averaged about 10 orders over a 12-month period valued at $1,362.

And early last year, the Globe and Mail had this to say about online shopping in Canada:

"Canadian online retail, in short, looks a lot like Canadian retail did 20 years ago: unimpressive, outdated and at threat of being thrashed by American retailers -- many of which are already making steady progress in better serving this market. Despite the country's reputation as one of the world's most wired and digitally social people, Canadians only spent $18-billion online in 2010 ..."

One promising StatsCan figure shows most Canadian shoppers are patriotic with 83 per cent placing orders through Canadian stores but unfortunately they are also spending money elsewhere (60 per cent ordered from vendors in the United States, and 18 per cent from vendors in other countries).

One would think that, as the global economy struggles to recover, businesses would be looking at all opportunities to expand, be more competitive, bring in more customers and reduce costs. Online retailing seems to make sense in this climate, at least to me.

Don't believe me? This is how Peach Berserk's Kingi Carpenter put it: "This is a time when the population can handle it (an online store) whereas five years ago they couldn't," says Carpenter. "If you have a web presence, you exist," she adds, noting businesses without web presence have less credibility in today's retail environment.

I agree and I think more and more consumers do too. Heck, I won't even go to a restaurant without first checking out menus and reviews online.

So tell me: Is Canadian retail as "unimpressive" as the Globe asserts, or is it just a little under-rated? It's clear we're lagging behind in the race for online retail dollars but why? And what can be done to improve our results and help retailers succeed?

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