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Retailers Find New Ways to Ring Up E Comm Sales

If retailers have any lingering doubts about the dominance of online sales, Kelly Abbott is here to lay them to rest. “The last six months has been the biggest growth for us,” says the president of ParcelPal, a Vancouver-based on-demand delivery service. “It’s like a hockey stick. It’s just going up.”

ParcelPal is just the latest business that’s helping get liquor, food, and clothes directly into the hands of the consumer. E-commerce, it seems, is no longer the sales strategy of the future. It’s the way we shop right now.

Yet the Canadian Internet Registration Authority notes that some 40% of Canadian small businesses don’t even have a website, let alone mobile capability. Is yours one of them? Luckily, there might just be an app for that.

Driving Change

BC’s private liquor retailers are in a good position to jump into online sales, but only if they do it quickly.

In July 2016, the Ministry of Small Business and Red Tape Reduction announced that the BC Liquor Distribution Branch was in the process of developing an online sales model. Private retailers have the opportunity right now to take advantage of what is sure to be a time-consuming process for the government stores.

Already, some private stores have launched their own e-commerce initiatives. For instance, Darby’s Liquor Store offers 1,500 products online to customers in Vancouver’s Kitsilano, Kerrisdale and Oakridge neighbourhoods, who can have them delivered “just like ordering a takeout”. The distinctive black-and-white Darby’s delivery van has become not just a means of getting product to customers, but a key component of the store’s branding.

Similarly, Legacy Liquor Store in Vancouver and Liquor Express in Victoria allow customers to order online and have their products delivered. Other stores, like Bear Creek Liquor Store in Surrey, will take delivery orders over the phone.

However, for a small independent store, adding e-commerce to their list of duties can be a challenge. That’s why it makes sense to partner with one of the myriad of new businesses that are popping up to tackle everything from driving the delivery van to building an online sales app.

Rising to the Challenge

For one thing, there’s the issue of keeping track of product when orders are flying about on so many different platforms. That’s where Barnet POS Systems comes in. The software development company provides point-of-sale management and inventory control systems for a variety of businesses, including liquor retailers, and is busily adapting for e-commerce.

“We’ve offered online sales for a long time,” says Stacy Mueller, business development director for Barnet POS Systems. “What’s different now is we’ve directly integrated it with store systems, so it’s all live inventory.” That means that both the customer and the retailer can be assured that a product that is on the screen is also on the shelf.

E-commerce is already an important component of retail, and will only become more popular.

There are other challenges to online sales, as Barnet discovered when it developed its delivery platforms. “Our initial struggles were with shipping costs,” Mueller says. “Just recently, the shipping companies recognized the potential in liquor sales. Now they have some better rates. Even Canada Post has recognized the potential.” Canada Post is working closely with the LCBO in the e-commerce initiative launched in Ontario in July 2016.

The Legalities

And then there are the legal issues. For instance, by law, liquor has to be delivered directly to the person who ordered it, which means the delivery person is responsible for checking ID, adding to their time and responsibilities. If that customer turns out to be a minor, the courier then has to return the product for a refund. That’s one reason ParcelPal makes sure that every retailer is paid in full before a product goes out to a customer. “We’re really conscious of the laws,” says Abbott. “There are no cash transactions at all. Everything will just be done electronically.”

As Mueller says, “It’s the make or break. We can’t just leave liquor on the doorstep.”

A Better Marketplace

The bigger challenge for a private retailer, especially facing the monolithic government stores, is economy of scale. And there’s a solution for that too.

Barnet is working with another company to create an online marketplace, similar to Etsy or Amazon, which is scheduled to be online by early 2017. “You put in your area code and then it would direct you to the nearest liquor store,” Mueller explains. “From a retailer’s point of view, it’s like a subscription service. They’d get a storefront of their own.”

This is ideal for stores that don’t have the manpower to create their own e-commerce websites: Customers could either shop from a specific store, or from the whole spectrum of retailers on the site.

By 2019, 9.5% of all retail sales in Canada will be made online.

Abbott is also developing an online marketplace, which he describes as “Vancouver’s first Uber-style business.” His couriers load the ParcelPal app on a smart phone; when a business puts in a job, the courier can accept it and deliver alcohol, food, clothing, or anything a consumer can buy. As Abbott notes, “We’re creating a place for you to shop and get it delivered right away.”

The ParcelPal app will help businesses that wouldn’t otherwise have an online presence get into e-commerce. “A lot of these liquor stores have no online presence whatsoever, and that’s where we’ve built the business model,” Abbott says. “A liquor store will reach out to us; we’ll build a branded page with their logo, like you’d build something with eBay or Amazon.”

But whether liquor retailers choose to join a marketplace or go it alone, one thing is certain: e-commerce is already an important component of retail, and will only become more popular as time goes on.

After all, as Mueller points out, “You can literally order your wine at lunch and have it get to your home when you do.” And what customer wouldn’t raise a glass to that?

Adding up the Numbers

Wondering whether to invest time and effort in e-commerce? The numbers tell the story.

• Statistics Canada reports that retail e-commerce sales just in October 2016 reached $1.1 billion, accounting for 2.3% of total retail sales in Canada that month.

• Forrester Research predicts that by 2019, 9.5% of all retail sales in Canada will be made online. In the US, analysts say that e-commerce retail sales are already increasing by 10-12% per year.

• Retail giant Amazon alone went from online sales of $66 billion in 2014 to $88 billion in 2015, a growth of 33%, while on this side of the border, Indigo Books and Music reported 17.9% growth in online sales for the third quarter of 2016 and Hudson’s Bay reported a 35% increase in the period ending January 31, 2016. Both are now rapidly expanding their e-commerce activities.

• The Canadian Internet Registration Authority (CIRA) says that more than 20% of 18- to 54-year-olds made purchases from a tablet in 2016, confirming a trend reported as far back as 2014, when e-commerce giant Shopify noted that more than half of their sales came from mobile devices.