By Kate Jackman-Atkinson, Editor, myWestman.ca
NEEPAWA, Man. — After dramatically transforming one industry after another, the online revolution has come for the retail sector. The number of Canadians shopping online has been rising, which has led to great handwringing about what this means for the retail sector. You can’t blame them, we’ve all seen the impact the internet had on buying things like air travel and movie rentals.
Retail e-commerce has been rising and in 2018, it accounted for $18 billion of sales, or 2.9 percent of total retail sales in Canada. Interestingly, about one-quarter of those sales took place in the holiday shopping season. Less than 10 years ago, in 2010, Statistics Canada figures showed that Canadians placed about 114 million online orders, totalling $15.3 billion. These trends aren’t expected to turn around; by 2021, Canadian retail e-commerce is expected to rise to $29 billion. In the U.S., online shopping accounts for almost 10 percent of all retail sales and is forecast to reach 20 percent by 2025.
While these trends may be concerning to those in chain retail and commercial real estate, could it be a good thing for rural economies? I think it might.
Business owners in most rural communities recognize that they can’t be all things to all people. At some point, everyone will have to go to Brandon, or Dauphin, or Winnipeg to get some widget that they can’t buy locally. Once they’re there, they’ll spend money on things they could have bought at home, since they’re there anyway. But what if it didn’t have to be that way?
With online shopping, rural residents can buy almost all the stuff they can’t get locally and have it delivered to them. They save time and money and haven’t bought groceries, gas and meals out of town, “Since they were there anyway.” For me, online shopping has significantly cut down on the number of out of town trips I have to make. A certain amount of money will flow outside a rural community, that’s inescapable, but any opportunity to minimize it is a win.
Rural communities also have a lot to gain from the shift to online shopping, because it allows their businesses to reach shoppers far beyond their physical trading area. Especially true for unique or niche businesses, being able to sell to those beyond your community can make a business not only viable, but successful. When you’re selling online, being in a small rural community isn’t a disadvantage — as long as your customers can reach you virtually, it doesn’t matter where you’re located. For an ambitious small business owner in a rural community, the rise of online shopping is a huge opportunity and has created a whole segment of businesses that wouldn’t otherwise be able to exist. E-commerce has meant that entrepreneurs don’t have to choose between rural life and their business dreams.
As an added spin-off, the move to online shopping has the potential to help ease real estate crunches in Canada’s hottest markets. In-person shopping requires stores to be near people, but online shopping distribution warehouses are typically located in areas not considered to be prime real estate. Many shopping mall owners recognize this and RioCan Real Estate Investment Trust, which was previously the country’s largest real estate income trust (REIT), is in the process of tearing up some of its malls to redevelop the land into apartments.
If these trends hurt Canada’s commercial real estate barons, I’m not overly concerned. For rural communities, I think the upside potential is greater than the downside. I am excited to see what the growth of online shopping will mean for rural residents and entrepreneurs.