Until last March, Les ImpARTfaites only offered art classes in its charming studio on the second floor of a building on Fleury Street in Montreal. The two owners never believed that a global situation would force them to change their business model.
Posted on Oct 12, 2020
A very modest website has existed for some time to sell courses to budding artists in the area. When it all closed, Céline Grégoire and Anne-Marie Bouchard decided to use this site to sell masks. “There was a little boom, it worked well, says Céline Grégoire, because there are no shops and pharmacies yet.»
Enthusiastic and believing they have access to an unlimited market, the two artists began creating and selling aprons, bags and brush cases. Céline Grégoire even signed up for a free training course offered by the City of Montreal and the Quebec Retail Trade Council (CQCD).
It’s mysterious to me, how Google Ads, SEO work. I know we can’t miss e-commerce, it’s the future. But so far, we have sold only three. I had to find a way to find people we didn’t even know.
Céline Grégoire, co-owner of ImpARTfaites
Les ImpARTfaites is one of thousands of Quebec SMEs that have started e-commerce with COVID-19. how many really? About 20,000 have already jumped, if we extrapolate Quebec data compiled by the Canadian Federation of Independent Business (CFIB) for The Press. It is one of the rare organizations that has collected recent data on this topic.
According to a survey of 1,518 Quebec SMEs between May 22 and June 5, 8% said they started selling online in response to the COVID-19 crisis; 7% also said “they put it in place”; 11% said they would like to implement this mode of transaction for the future.
According to the latest data from Statistics Canada, there were 241,000 SMEs in Quebec in December 2017, or 99.8% of all businesses. In concrete, considering those who have done it or plan to do so, COVID-19 could have pushed more than 26% of them, or nearly 63,000 small and medium-sized businesses with fewer than 500 employees, to start. in e-commerce.
Big jump. For many years, year after year, the proportion of businesses in Quebec doing online business has been estimated at a meager 20%. In a few months, this rate will more than double.
The spark: containment
We also noticed that 46% of SMEs are extremely reluctant to sell online and believe their “business model doesn’t lend to it”.
We are already seeing a trend towards the rise of online commerce, and retail trade has been hit hard. COVID-19 speeds up the situation and creates consumer habits.
François Vincent, Vice President for Quebec of the Canadian Federation of Independent Business (CFIB)
The trigger can be summarized in one word: containment. Last April, nearly 12% of businesses in Quebec said they were “fully open”, according to the CFIB. In residential and food services, this rate is 4% nationwide. At retail, it is 13%.
Stores and businesses closed, consumers shut down, e-commerce solutions clearly emerged, especially for retailers. According to a recent Accenture study, online purchases by casual online shoppers have risen 170% since mid-March.
“You have to be there where the consumer is,” summed up Manuel Champagne, general manager of Retail Quebec, an organization commissioned by the Quebec government to draw pictures of the sector in this area.
Notably, retailers were more present online than other merchants before COVID-19. Thus, 47% of them had an e-commerce platform in 2019, according to Retail Quebec. The organization is currently working on updating this data taking into account the pandemic.
Retailers who have made the transition to e-commerce have been able to weather the storm of “terrible spring”, believes Mr. Champagne a priori.
In April, we held focus groups and companies told us: they accelerated their online passage, they implemented or improved their platform during incarceration, they didn’t sit idly by.
Manuel Champagne, General Manager of Retail Quebec
Almost everyone who already has an e-commerce platform sees this as representing a growing share of their revenue. “Small, medium or large, everyone mentioned growth,” the general manager reports. We went from 10 or 12% turnover to 30%, even 100% when everything was closed. »
According to the latest statistics published in 2019 by CEFRIO, online purchases by Quebecers reached 12.45 billion, or 9.6% of retail sales. Merchants with transactional platforms estimate that 26% of their revenue comes from online purchases.
Between the recession and Amazon
The big question, however: will e-commerce lead to an overall increase or even a stabilization in turnover? Does it still earn?
Of course, other factors clouded the picture, in particular unemployment and the overall economic slowdown. In Quebec, household consumption spending dropped 7.3% overall in the first six months of 2020.
According to a CFIB survey conducted in early September, only 33% of Quebec SMEs believe they are making their average income right now; 8% even report a large increase in revenue. We don’t know what proportion of them associate this good performance with e-commerce.
For those with low income, there are two main reasons, according to CFIB: fewer customers and less they spend.
And if more shoppers turn to online purchases, the Amazon giant, which monopolized 17% of values and attracted 44% of online shoppers to Quebec in 2019. “Many shoppers will likely turn to Amazon , ”Manuel Champagne said.
Buy local to deliver
In other words, it is difficult to make a clear assessment of the profitability of e-commerce after six months of COVID-19, especially since it is expensive to implement and use. Those who opened the online platform while incarcerated and found their store from May should now “manage two businesses”, said Alain Dumas, general manager of Blue Basket, a directory of 22,000 Quebec companies, which currently conducts of consultations by videoconference throughout Quebec.
Most told us it allows them to get through it, some had as large a number of sales during incarceration as when they were on the street. But now the management of the two businesses is complicated for them, they do not have enough resources.
Alain Dumas, Managing Director of Blue Basket
Offering competitive delivery costs and prices, assuming returns, having an attractive platform while guaranteeing acceptable deadlines is clearly not reachable by everyone.
“In the very nature of small business, it is almost impossible to compete on equal terms with the web giants, believes François Vincent, of CFIB. Hence the importance of population support in its consumption choices, and the support of governments in this digital transformation. »
This call for local buying was the idea behind Blue Basket, and it seemed to bear fruit. According to a CROP survey commissioned by the organization in early May, 44% of Quebecers reported that their consumption of local products increased “a little” or “a lot”. In addition, 51% of those familiar with Blue Basket reported that this web platform had the impact of increasing their local purchases.
“Our goal is to channel and optimize local purchasing power, and it works well, it does the job we wanted to do when it launched on April 5,” Alain Dumas said.