What is e-commerce, and what can it do for Canada’s small businesses?

According to Industry Canada, small businesses (with fewer than 100 employees) contribute to about 30% of Canada’s GDP[1]. They are vital to our economy. In fact, there are about 1 million small businesses in Canada, and about 13% of all small businesses are in the retail sector. It is a cut-throat environment, and 15% of small businesses fail within the first year of entering the marketplace[2].

How do you get ahead in such a competitive market? It is important to find a niche, either in terms of concept, price, product or location, and then work to get your name out. A loyal customer base, along with good business practices, can help small businesses weather the storm.


One of the most wide-reaching and simplest ways to get your name out is through the Internet, both through traditional paid advertisement and through social media and viral word-of-mouth. Many companies, using the Internet, have established themselves as e-commerces or as online stores, as well for marketing purposes.

Nearly 80% of Canadians have access to the Internet.  Of those, 51% of Internet users have ordered goods or services over the Internet. In 2010 alone, Canadians have ordered nearly 114 million orders, valued at $15.3 billion, and almost 83% of those were ordered from Canadian retailers. Nearly 94% of consumers earning $70,000 or more annually use the Internet; in addition, 98% of youth between 16 and 24 are active on the Internet, and surprisingly enough, nearly 50% of Canadians ages 60 and over are also present on the Internet[3]. These two groups, especially the Baby-Boomer group, both with relatively higher amounts of disposable income, are the consumers to watch. What is more, customers from outside Canada generated for almost 20% of online sales in Canada. The Internet also offers great opportunities for those companies that do not directly deal with end-use consumers: online sales for wholesale trade, transportation and warehousing, and manufacturing, for example, take in an average of 16% of online sales in Canada[4].

As much as 74% of Internet users use the Internet to do window shopping, though only 51% of Internet surfers actually buy online. This means that many Canadians still buy from brick-and-mortar stores[1]. In fact, the Internet can also offer advantages to brick-and-mortar retailers as well. For example, innovative Internet-based companies PayPal and Square have both developed Internet-based payment systems for small retailers. Both companies have developed convenient devices that can be plugged into a smartphone or tablet, which will allow retailers to swipe client credit cards without the need for a large register system, and with relatively lower maintenance costs. This is a boon for smaller retailers, as these new technologies significantly cut down on investment costs.

According to a Dragon’s Den survey, as much as 60% of Canadian small businesses market themselves online[5]. There is good incentive to do so: opportunities such as local area searches and social media can help spread awareness of your company. For example, 34% of marketers have generated leads on Twitter, and 20% have closed sales on it, and 73% of consumers claim that they interact with brands through Facebook updates and posts[6]. Social media allows companies to reach a larger audience for relatively low cost, and allows for their reputation to be able to spread quickly and effectively.

Unfortunately, approximately 23% of Canadian small businesses have no online presence at all, while a full 20% percent have partaken in only one online activity[7]. Only 36% of small businesses have their own websites, and only 7% of small businesses sold their products online[5]. Needless to say, they are missing out on the great potential that the Internet offers in terms of marketing services. There are many advantages to going online for promoting your small business, including a widening of your visibility and reach to growing Internet audiences, as well as diminishing start-up costs, just to name a few. Like it or not, the future of business is through the Internet, and those who do not catch up can find themselves left in the dust.

To find out more, contact us for a free online marketing consultation.

[1] http://www.ic.gc.ca/eic/site/sbrp-rppe.nsf/vwapj/KSBS-PSRPE_July-Juillet2011_eng.pdf/$FILE/KSBS-PSRPE_July-Juillet2011_eng.pdf

[2] http://www.rbc.com/economics/market/pdf/sme_1008.pdf

[3] http://www.canadianinternetproject.ca/en/docs/2008/CANADA%20ONLINE

[4] http://www.statcan.gc.ca/daily-quotidien/080424/dq080424a-eng.htm

[5] http://www.cbc.ca/news/business/smallbusiness/story/2011/10/04/f-smallbiz-by-the-numbers.html

[6] http://www.jimmintz.ca/2011/11/18/compilation-of-social-media-stats-usa-and-canada-for-marketers-2011/

[7] http://www.6smarketing.com/google-engage-conference/