Ben Burmaster, owner of Snugglebugz, speaks about eCommerce in Canada, many of the challenges of eCommerce and how to get started the right way.
eCommerce in Canada is a really hot topic right now. A lot of people are looking at the statistics that are out there – “30 billion dollars in 2012 is going to be spent online in Canada”. The majority of that money is going across the border. People are purchasing off U.S. sites and importing that product into Canada, it’s not going back into Canadian’s pockets. We look at things like the percentage of people who buy online and we look at the world and hear numbers like 8% and 10% and then we look at Canada and we see numbers like 3% or 4%. People are looking at the opportunity and they say, Canadians are above average computer users and we have above average internet connections. We are just not above average internet purchasers.
A lot of mom and pop shops in Canada, distributors and that, are looking at this, even major organizations like Rogers and Lowblaw’s, and saying what do we do online. How do we make this work? Like Shopper’s Drug Mart “we don’t have an online strategy”, “what should we be doing?” It’s a little bit of fear. You see Amazon.ca coming into Canada, you see all these U.S. eCommerce merchants that are billion dollar corporations crossing the border to come tap into our market.
A lot of people are looking at eComm and saying “I need to have a solution”, but what most people don’t realize is that you can’t just go out and get a solution. It takes a lot of work and it takes a lot of money. eCommerce has to be treated almost as a separate business. You need to create separate revenue projections, you need to create separate funding, you need to, as in our case, even have separate inventory. We carry inventory that is just for eCommerce. There are so many things that are different about the eCommerce business and it is important for people to realize that. It’s not a go out and get your front-end web developer to create you an open source e-commerce cart for $5,000 and put that up and all of a sudden you’re going to be in the eCommerce play.
The budget that you need and the team of people behind you to make that grow and what you need to do is not $5,000. If you go out and get the $5,000 to $25,000 solution, you’ll end up with an eCommerce site that will partially work, you will be able to collect payments, but it will not be integrated eCommerce with ERP Software, it will not be automated, it will not be #1 on Google. You will not be doing any of the marketing, any of the branding, you will not be able to deliver any of the product. You will not have the budget to be able to do it. You need to treat eComm, in my opinion, as a separate business and take it seriously.
I think if Canada gets serious about eComm – I think one of the reasons we are so far behind, go try to buy something online; you can’t buy it. There are no sites to do it, and if the sites are there, lots of times they look so bad I wouldn’t want to buy them off there anyways. So if we get our act together in Canada with eCommerce and businesses start spending some money developing proper eComm strategies, I think we are going to see that 3% number get up to the world average and we will see a great eCommerce business in Canada.