Generally, small and medium retail businesses face a lot of challenges in the business world. Although e-commerce spending in Canada continues to rise in both a consumer retail and B2B context, the extent to which digital commerce is being utilized is relatively small, considering the large size of the country’s market. This article talks about the challenges for small and medium retail businesses in the Canadian business ecosystem.
Competitive climate
For a business to scale in the e-commerce sector, it must be ready to compete. The pricing model, the available products, and the ease of access need a constant update. “As a small business, you can overcome price competition by having a very clear company value proposition that consumers can’t get elsewhere,” says Calloway Cook, founder of Illuminate Labs. Hence, small and medium businesses lack the infrastructure to compete against the big names in the e-commerce industry. Notably, big platforms in the e-commerce space, have captured the Canadian market. To disrupt the grip of big e-commerce platforms in the Canadian business ecosystem, a strong competitor is needed; limiting what small and medium retail businesses can do.
Cybersecurity
“Small businesses that focus their attention in the e-commerce space need policies and procedures to create a solid cybersecurity framework for the organization. In the case of a cyberattack, a small business cannot afford to have downtime in operations and sales, because every transaction is a marginal financial success that the business depends on,” says Victor Congionti, chief information officer and co-founder at Proven Data. However, setting up a security framework is quite an expensive project for small and medium businesses based on their low revenue turnout. Additionally, maintaining the security protocol requires several external plugins or an expert-hire, an almost impossible cost for small and medium businesses in Canada.
Website traffic and sale conversion
Developing an e-commerce website with a fascinating UI is capital intensive, however, gaining quality is what justifies the cost. The days of casually stumbling on an e-commerce website are well behind us. With the e-commerce industry being overly saturated, the use of ads, SEO features are now being employed to generate platform visibility. Small and Medium businesses lack the funds to employ the technical know-how capable of generating quality traffic.
Limited service variety
Small and Medium businesses in Canada operate a niche model. They tend to focus on a single section of products due to inadequate funding and support. However, many big players in the e-commerce industry have a wide range of collections that have earned them several customers around the globe. This is a great challenge to the status of the small and medium business as the tendencies of winning customers across a variety of markets is minimal.
Lack of capital for Digital scaling
Setting up a B2B or B2C e-commerce platform is a capital-intensive project. There is a need for a competitive user interface and a functional backend that guarantees the platform’s seamless operation. Small and medium scale businesses in Canada have limited funds to open up their businesses digitally. DCKAP notes the gap that still exists between Canada and the US in digital commerce. “The disparity in digital commerce activity between Canada and the United States is easy to account for when considering that approximately half of all Canadian small businesses still do not have a website to conduct sales” (DCKAP, 2020). Notably, E-commerce websites open your market visibility on a global scale, a lack of it can be a challenge to large scale market status.
Setting up multiple payment gateways
Buyers in B2B and B2C need multiple methods of payment. Incorporating these has been uphill for small and medium retail businesses in Canada. The flexibility in payment terms in B2B e-commerce is therefore absent, making it hard to keep customers happy and loyal.
Breaking the barriers
Many small and medium scale businesses have not been able to leverage the global visibility e-commerce presents due to several challenges. However, with more partnerships across the horizontal, they can now create a bigger platform that is strong enough to withstand the pulls of the market. Also, a gradual shift into Electronic commerce is a good move, as it further makes small businesses more prepared for the harsh E-commerce climate.
