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E-commerce wasn’t the cure-all for pandemic business woes

BusinessE-commerce wasn't the cure-all for pandemic business woes

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If we want Ottawa-area brands to survive and thrive, we need to find our way back to the early-2020 trend where consumers banded together and primarily shopped local.

Some speculators thought online businesses and digital commerce would replace brick-and-mortar. They were wrong. Photo by grinvalds /GETTY IMAGES/ISTOCKPHOTO

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I teach an Introduction to Entrepreneurship course at Algonquin College and make an effort to bring local entrepreneurs in as guest speakers so my students can learn the realities of being small-business owners.

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The last two guest speakers unearthed an interesting trend I didn’t know was there: some e-commerce businesses are in fact doing worse than they were prior to the pandemic.

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According to a Statista survey, in 2020 nearly 70 per cent of consumers in Canada primarily shopped close to home in order to strengthen the local economy.

During the pandemic, businesses saw a boom in sales and “shop local” initiatives, including using online tools to do that shopping. The spotlight was on our neighbourhood entrepreneurs: news features, TV interviews, local campaigns that boosted the local business economy and prevented it from closing down. Some speculators even thought online was going to replace brick and mortar altogether.

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The COVID-19 pandemic motivated many businesses to sell online for the first time, and it also incentivized others to expand their online operations.

Unbeknown to them, the upward trend in online sales provided unsustainable false-growth projections, on which they based important decisions: reinvestment and expansion of warehousing space, hiring more staff and aggressive new product development.

I experienced this myself to a certain degree. I own two retailers and our online sales jumped so much during the pandemic that we even toyed with the idea of renting extra warehousing space to create an online distribution centre, and wondered what the future of our physical locations would be like.

But now that the world has opened up, consumers have returned to stores and malls, and local e-commerce-centred businesses are feeling the pinch.

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If anything, the pandemic was an intensive online shopping-101 crash course for late adopters and consumers who learned the ropes and realized that cross-border shopping is at their fingertips.

Giants such as Amazon, Shein, Wish and other online stores continue to make gains while smaller, locally owned e-commerce retailers struggle to compete for a spotlight that is no longer there.

Gone are the news features, TV interviews, and aggressive shop-local campaigns — the initiatives that encouraged consumers to support our local economy.

Ottawa is home to great online brands such as Tease Wellness, Dalcini Stainless, Bathorium, Purple Urchin and plenty more.

If we want these and other Ottawa-area brands to continue to survive and thrive, we need to find our way back to the 2020 trend where more than half the country banded together and primarily shopped local (whether in-person or through e-commerce). The local economy needs the support — an economy made up of your friends and neighbours.

Karla Briones is a local immigrant entrepreneur and owner of Global Pet Foods Kanata & Hintonburg; founder of the Immigrants Developing Entrepreneurs Academy; and an independent business consultant. The opinions here are her own. Her column appears every two weeks.

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