It might not look like it, but retail sales in Canada are up from the previous year. This is due to the fact that disposable income that might have formerly been used toward holidays or dining out is instead being used for retail, particularly when it comes to home and home accessories for the kitchen, bathroom, and garden.
Adding onto that shift, e-commerce is a rapidly expanding sector in the Canadian retail landscape. It’s not a surprise that people are shopping from home, as that is the only choice for a lot of goods. But what does this mean for retailers and retail real estate owners?
Goods that are a necessity are not being impacted by the pandemic
Things like grocery, pharmacy and other staples have not been negatively impacted in the past year. In fact, they have become even more important as a cornerstone in our communities. In addition, development opportunities in urban markets and residential areas are strong in every market. Properties that are located in good areas with strong cash flow are leasing quickly. Still there have been many other changes due to COVID-19, but many of them have had a positive impact for businesses everywhere.
Shopping from home becoming increasingly popular as time goes on
The pandemic has served as an accelerator for e-commerce. According to the statistics, e-commerce previously accounted for around 6 percent of overall sales in Canada per year. But just before the pandemic, the percentage increased to 10 percent. Retailers who successfully established their online platforms accelerated during this growth the most.
All consumers over every demographic are shopping online because they have to. One question is, will they continue to do so once the pandemic is over? There are a few reasons why brick and mortar stores will remain relevant even after COVID.
But, retailers need to make sure there are opportunities to make e-commerce part of the shopping experience. Today and towards the future.
Shopping online allows for offline real estate conversions
There is a much higher demand now for the blending of e-commerce, warehousing and retail. Traditional retail stores are now places for pickup destinations as well as in-store shopping. Distribution networks are increasingly expanding and in need of more reimagining.
All businesses need to improve their efficiency and provide rapid availability, which will help improve their bottom lines.
Both retailers and suppliers are investing in spaces that can help them with their e-commerce needs, both with small conversions which allow for easy pick up and in important warehousing services to hold and distribute their goods.
Big companies like grocers are changing in order to accommodate growing e-commerce demands, while smaller retailers are still trying to catch up at variable rates. Some have more to go compared to others since small businesses were less likely to have robust online websites and systems in place.
Making these innovations towards having a larger presence online can help businesses, as well as tenants and landlords who are looking to capitalize on this shift.