A new study says businesses with a strong e-commerce presence managed to increase revenue through the COVID-19 pandemic, yet less than half of small and medium-sized enterprises plan on selling goods online after the crisis is over.
A Business Development Bank of Canada survey released Wednesday found that businesses that conducted more than 50 per cent of sales online outperformed others during the lockdown period, with 39 per cent reporting that they were able to maintain or increase revenue. This came as 85 per cent of consumers said they now shop online.
Still, the survey shows that many small businesses are reluctant to go online. BDC said that 46 per cent of SMEs plan on selling goods online after the COVID-19 pandemic, compared to 43 per cent at the beginning of the crisis. Less than 25 per cent plan on prioritizing e-commerce in the next year, and just 15 per cent believe online sales will increase substantially over the next three years.
BDC’s chief economist Pierre Cléroux believes that some business owners overestimate the cost and complexity of shifting sales online. At the same, he says many entrepreneurs underestimate the benefits of e-commerce.
“I think there’s still a lot of work to do to convince and expose those businesses to the benefit of selling online,” he said in an interview.
E-commerce growth has exploded through the pandemic, as lockdowns and measures aimed at preventing the spread of the coronavirus pushed consumers online in numbers never before seen in this country. According to Statistics Canada data released this week, online sales are set to hit a record this year. Last year’s e-commerce sales among businesses with at least five employees hit $305 billion, representing eight per cent of total revenue.
The BDC survey said the first four months of the pandemic exceeded sales over last year’s holiday season, which is typically one of the busiest times of the year for retailers.
“The pandemic has changed the game,” Cléroux said.
“E-commerce is not a new trend, but the pandemic really accelerated it... we’re not going to go back to the level of volume we saw before the pandemic. It’s not going to slow down.”
For those companies that have yet to make the transition part of their business online, Cléroux advises owners understand the market for their goods and get to know customers’ online preferences.
“Opening a website doesn’t mean your sales are going to automatically increase,” he said.
“You have to do the right thing and have the right strategy. People won’t come if you don’t have something unique to sell that brings value to the consumer.”
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.