The New Digital Economy: What Small Retailers Need to Do to Survive

The impact of the crisis generated by the pandemic goes far beyond health and wellness. With an education lapse at the forefront with 1.4 billion students out of school — representing more than 3 out of 4 children and young people worldwide — COVID-19 is also putting the global economy at risk.

The economic scenario is one of the most affected by distancing recommendations. With the suspension of partial commercial activities and agglomerations, self-employed professionals and independent businesses were severely affected. Agility, creativity, and automation will be the watchwords for this new era of business, and those who have these resources will soon come out on top.


Social isolation has had a significant impact on retail, especially for smaller businesses that rely heavily on local foot traffic and community culture. According to Statistics Canada, brick and mortar retail sales fell 26.4% in April, more than double what economists forecast.


Doug Porter, an economist at Bank of Montreal, told CBC News:


April is most obviously cementing its reputation as the worst month for the Canadian economy ever.

If we add this result to those of March, the numbers are even more alarming, with the market dropping more than a third. Many sectors had historic declines such as clothing and accessories showing a 70% drop, furniture stores down 51%, and auto and motor vehicles and parts dealers down 44% (Evans, 2020).

More than online, it is necessary to be present with the local community.


Companies must certainly accelerate the digital transformation to kickstart the online operation and minimize losses. It is the demand today and will likely continue to be the new normal for consumers who have had to change their consumption habits.


Results show that this shift was quickly realized by the traditional Canadian retailer who adapted e-commerce strategies to remain open for business. In the virtual environment, small retailers have the same opportunity to win customers than big names in the market. Old rules of communication and interruption marketing do not work as well as before. It would be more useful to design a robust online presence, and this field is free for everyone.


While retailers are experiencing historical losses and cautiously returning to activity, the digital market continues to boom in Canada. Online sales have reportedly more than doubled in April and now represent almost 10% of everything sold in the country – a historical record. Amazon.ca does not enter Statistics Canada numbers because it has its operation in the United States and is considered foreign (Evans, 2020).


A recent survey by Deloitte clarifies this change in consumer behaviour. About 52% of Canadians are likely to buy online to minimize contact with others. Younger people between ages 18 and 29 are the most likely to access the online retailer’s website, about 58%, while those aged 55 and over are slightly less likely to do so, only 44%.


The report states that even after the opening of stores, Canada will continue to seek solutions to reduce physical contact. Alternative strategies include experimenting with new technologies, such as ATMs, contactless payments, store robots, front-door delivery, virtual reality experiences, and more (Deloitte Canada, 2020).


Bruce Winder, author of the new book Retail Before, During & After COVID-19:


Retailers and suppliers are forced to develop online shopping capabilities at an accelerated rate

One of the main attractions of eCommerce is precisely the opportunity for rapid growth and quick service. In addition to the convenience offered around the clock, seven days a week, consumers can buy directly from their smartphones without leaving the couch.


It is possible to interact with the community in real-time, clarifying doubts and solving problems. Information from Google Trends shows, for example, that in April, there was an increase of more than 200% in the interest of Canadians searching for the term “buy online,” which is no surprise when people need to stay at home.