Online retail stores are virtual establishments that sell a variety of consumer or business-to-business products through e-commerce transactions. Online stores allow an owner to reach a larger and more geographically diverse group of potential consumers - and can lower operating costs by eliminating the need to rent or lease a brics and mortar storefront location. As e-commerce continues to grow in popularity, the opportunities for successful online businesses will also expand.
Industry Overview
BC
Data released by BCStats for June 2016 indicated a growth of 2.4% in retail sales in BC between March and April. This is a healthy trend after a decline in sales in the previous month’s data. As retail is the key industry to influence growth in e-commerce, this is an encouraging statistic.
Canada
According to a 2015 eMarketer report, retail sales in Canada are expected to grow at a rate of 2% annually until 2018. Retail e-commerce sales are also expected to grow at a much higher rate of around 13%. Overall, Canada ranks eighth worldwide in terms of e-commerce activity and according to a 2016 eMarketer report, one of the biggest barriers for e-commerce adoption in Canada is high shipping costs. Nearly 65% of consumers indicated shipping concerns as the main reason not to shop online.
Industry trends and challenges
One of the key trends in online retailing, according to an IBISWorld E-Commerce Report, is accessibility to the Internet. Easy access to the Internet through smartphones is an influential factor in increasing online retail sales. The total number of fixed broadband connections, a measure of internet use, is expected to reach 14.1 million in 2021 with improved public Wi-Fi access also encouraging consumers connect to the Internet. As a result, more and more consumers will turn to the Internet to shop.
According to a forecast by Euromonitor, Home Improvement and Gardening is projected to be the retail category with the highest e-commerce growth over the next five years. This category is expected to have a value growth of 286.3% from 2015 to 2020. This is an encouraging trend for anyone looking to open an online shopping business in this area.
Resources
Associations
- Internet Merchants Association
- GS1 (formerly Electronic Commerce Council of Canada –ECCC)
- International Association of Online Business Managers
- Retail Council of Canada
- Chinese E-business Association of Canada
Magazines & trade journals
Additional resources
If you would like to access more resources, the Online Retail Accelerator Guide is designed to help prospective and existing business owners gather information for their secondary market research. The guide is broken down into four main sections that cover how to start your research, industry information, competitive information and customer information. Depending on your needs you can spend as much or as little time as necessary in each section.
If you find that you need more guidance before starting your secondary research, check out our Business Research Basics Guide, it will help you focus on what types of information you will need to gather and why it is important.
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Image source: E-Commerce Visa (Test tamron 17-50 2.8) created by Fosforix on November 6, 2008. Protected by a Creative Commons Attribution-NoDerivs 2.0 Generic license. Last accessed August 29, 2016.