Lightspeed has announced the release of eCom for Restaurant to help the food and beverage industry adapt to the evolving global regulations when it comes to foodservice.
The new Bon Appetit theme is specifically designed to help Lightspeed Restaurant users seamlessly transition their businesses online and integrate new revenue streams that will lead to long-term growth.
Lightspeed has also partnered with McGill University and Canada Post to channel this need for reinvention and to re-imagine the hospitality industry in a post-COVID world with the “The Hospitality Innovation Challenge”.
The white paper showcases insights that point to an omnichannel strategy being key for restaurant success as they navigate the new business landscape. Businesses who use Lightspeed Restaurant and implement the Bon Appetit eCom template are better equipped to adapt to re-opening and the continuation of delivery and pick-up services. Restaurateurs will benefit from an easy-to-set up and fully-customizable website that also includes several noteworthy features to help retain meaningful customer relationships and future-proof their business:
Display Menu and Unique Offerings for Sale: Publish digital menus that can be integrated with QR codes, showcase artisanal products, offer a curated selection of fresh produce and more
Linking to Delivery Platforms: Allows customers to conveniently order ahead online through integrations with key delivery partners such as Uber Eats and Order Ahead
OpenTable Integration: Provides an easy-to-use reservation tool for customers by seamlessly connecting OpenTable to a restaurant’s website
Instagram Integration: Strengthens the online community by sharing inspiration, information and updates through an Instagram feed’s visibility on the website
“The hospitality industry has been permanently altered by COVID-19 and as a leading technology company, it’s our responsibility to provide solutions that are designed to support the industry during this unprecedented time,” says Dax Dasilva, Founder and CEO of Lightspeed. “Our eCommerce for Restaurant solution equips restaurateurs with the right tools to establish their online presence and increase revenue, while also providing an online hub for their customers.”
McGill University, Lightspeed, and Canada Post Partner on the Future of Hospitality
The new student-driven white paper published by McGill University in partnership with Lightspeed and Canada Post titled “The Hospitality Innovation Challenge,” puts forth tactics restaurateurs should implement in order to future-proof their business, including adapting forward-looking technology and creating an omnichannel experience.
In “The Hospitality Innovation Challenge,” 80 teams of undergraduate and MBA students from 20 universities across Canada were invited to ideate actionable solutions to assist real businesses in finding a path to profitability as consumer behaviours continue to change. Co-commissioned by enterprise and academia, the study sought to rethink the food sector for a post-pandemic world, revealing that the best ways for restaurateurs to pave a path to profitability were to expand their digital footprint, foster stronger customer relationships by rebuilding confidence, and stabilize cash flow through multiple revenue streams – most of which will be supported by the technology of Lightspeed’s eCom for Restaurant solution.
RENDERING OF T&T SUPERMARKET AT WILLOWBROOK SHOPPING CENTRE. RENDERING: WILLOWBROOK SHOPPING CENTRE
T&T Supermarkets continues to expand its footprint in Canada despite the COVID-19 pandemic.
WILLOWBROOK AND DEERFOOT MEADOWS SET TO HOUSE T&T’S NEWEST LOCATIONS
The largest Asian supermarket chain in Canada plans to open a new store this winter at Deerfoot Meadows in Calgary and another new store in mid 2021 in Langley, B.C. in the Willowbrook Shopping Centre, moving into an old Toys R Us space.
The company, which currently has 26 locations in British Columbia, Alberta, and Ontario, plans further expansion in the future.
“Certainly these two stores are not the end of the story,” said Tina Lee, CEO of T&T Supermarkets. “We have been aggressively growing prior to these stores and we will continue to look for new opportunities. Pre-COVID we opened four stores within 12 months and we definitely were heads down when it came down to managing the business throughout COVID. We continue to be focused on our store expansion plan and there’s definitely still a lot of runway.
RENDERING OF T&T SUPERMARKET AT WILLOWBROOK SHOPPING CENTRE. RENDERING: WILLOWBROOK SHOPPING CENTRE
MAP OF WILLOWBROOK SHOPPING CENTRE. IMAGE: WILLOWBROOK SHOPPING CENTRE
“There’s lots of communities across the country that I can see T&T being successful in the community and would welcome a T&T there. So we’re very much eyes open on opportunities. We certainly invite developers and landlords to reach out to us if they have a potential site. What’s unique about us is that we’re fairly nimble and flexible when it comes to store size but we also have to be very picky. It’s a new world now. We have to be smart about where we are. Like all the traditional site selection criteria still applies to T&T but also we really have to work very closely with our landlords or developers to make sure that it financially works for all parties and that we can bring a safe shopping environment to the communities that we open stores in.”
Lee said the company’s average store is about 40,000 square feet. Its largest is 74,000 square feet — an old Target space and its flagship store — in Richmond, B.C. Accessibility and parking are key considerations as are street visibility and loading.
The company’s first store was in 1993 which was started by Tina’s mother in Burnaby, B.C.
“Today we’re part of the Loblaw family but we still operate it. It was started by my mother and she retired in 2014 and passed on the reins to me,” said Lee.
“She was a new immigrant from Taiwan and it was really hard back in the 90s to do a full shop of Asian groceries in Vancouver. The go to place was Chinatown but you really couldn’t find everything under one roof. You had to go to the butcher shop and then the bakery shop and then the seafood shop. And it was raining all the time in Vancouver with very limited parking. So she said gosh we really need something all under one roof. Wouldn’t that just be great?”
The first store was opened deep in the basement of Metrotown Mall. One month later the second store opened in President Plaza in Richmond, B.C.
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“She gave it a try. She was part-time working, part-time housewife. But it was really something Chinese Canadians needed at the time. Customers gave us a lot of patience to learn the ropes, get it right. I really attribute the success of the business to my mother being a mother and being acutely aware of what customers needed and wanted in solving their daily problems on great food in one clean comfortable great shopping experience,” said Lee.
Both the new Calgary and Langley locations will also offer customers the convenience of online ordering for store pick up, and fresh express delivery to home at www.tntsupermarket.com. Customers can also shop online and have dry groceries shipped to any location in Canada. Together, the two stores will create more than 400 jobs in their communities.
“We are one of the few retailers that are continuing on an aggressive expansion plan,” said Lee.
Canadians will be doing less back-to-school shopping this year than they did a year ago during the traditional period of time each season for this retail sector, according to a survey released this week by the Retail Council of Canada.
But because of the uncertainty regarding remote and in-class learning much of the spending patterns has shifted because consumer behaviour has changed in many cases from what it has been like in the past due to the current circumstances.
BACK-TO-SCHOOL SHOPPING SURVEY SHOWS 4% DROP IN CANADIANS SHOPPING FOR SCHOOL SUPPLIES
The Back-to-School Shopping Survey, conducted by Leger between August 7 to 9, found that the average anticipated spend on back-to-school items this year is $727 versus $919 in 2019. Apparel and sporting goods show the largest decrease in spending across all regions except for Quebec, where consumers are purchasing more school supplies and sporting goods than other regions of the country, it said.
The survey found 41 percent of Canadians shopped for back-to-school in 2019 versus 37 percent anticipating to shop this year.
“The results of this year’s back-to-school spending survey are not surprising,” said Diane J. Brisebois, President and CEO, Retail Council of Canada. “With many regions of the country still struggling with in-person back-to-school guidelines, many parents and students are still unsure of what back-to-school will look like in the fall.
“We anticipate ‘back-to-school’ spending this year will continue to be more spread out throughout the year and follow Canadians’ confidence levels in a return to the ‘new-normal’ that COVID-19 is forcing us all to accommodate.
“The numbers in August are a snapshot in time and they are in fact indicative of the unusual times we live in and the uncertainty around in-class, or in-person, back-to-school and the fact that many students of all ages have been purchasing supplies so that they can continue their classes at home.”
With remote learning introduced in most parts of the country throughout the pandemic (as early as April 2020), many of the purchases that would have been made during the traditional back-to-school shopping period were made earlier in the year. This pattern is especially evident in categories such as furniture, electronics, school supplies, books, and related items, said the report.
“It’s important to note that this survey was done in August and it was about people who had purchased in August and people who were intending to purchase or not. That’s important to note,” said Brisebois.
“What this is saying is that there’s still uncertainty around in-class back-to-school in a lot of regions of the country. In some regions they’ve been specific about the dates, in other regions it’s been a bit of a moving target. That has created uncertainty from a consumer perspective. So some consumers have been holding back until they feel there is in fact certainty.
“The second point that’s important is we have seen consumers purchasing back-to-school related products as of April of this year which is a lot earlier than any other year obviously because the back to school is always July and August. And those who were doing it early it’s usually July with the bulk in August. But because in most provinces the schools were closed as of April 1 and it was at home learning many of the parents and many of the students purchased goods to be able to accommodate that new lifestyle as of April. That also explained the increase in electronic sales, in furniture sales, especially, desks and accessories. In fact, it’s difficult to say if in total less was purchased. We think in fact that by the end of the year those numbers will be greater than they were in 2019 in aggregate. But they have been tracking over a longer period of time.”
Brisebois said consumers are purchasing more when it comes to health-related products. The survey found that consumers will be spending on average $49 in this category this year compared with $28 last year. Of course, that will include things like hand sanitizers and face coverings.
“That continues to be front and centre for all consumers,” she said.
HEALTH & SAFETY MEASURES HEAVILY INFLUENCE CANADIANS’ WHEN CHOOSING BACK-TO-SCHOOL RETAILER
The survey found that the majority of Canadians say health and safety protocols are having more of an influence on their decisions on where to purchase back-to-school items this year and back-to-school shoppers are buying more items online this year versus last year.
The percentage of shoppers who had or were planning to spend on apparel/footwear for back-to-school dropped from 78 percent in 2019 to 69 percent in 2020. About half of Canadians say that they have been influenced by free shipping and the ability to buy online and/or pick-up in-store which explains the continued growth of e-commerce, added the report.
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After the traditional back-to-school period is over — and that may last longer than normal this year because of COVID uncertainty in how education will be delivered — the next big event for retailers will be Halloween. And many experts have predicted that COVID will have a profound impact on this annual spending extravaganza as many children will not be trick or treating this year.
RENDERING OF NEW QUEBEC SAMSUNG STORE. RENDERING: SAMSUNG
Over the past eight years, South Korea’s Samsung has been expanding its retail presence by opening standalone stores in major Canadian markets. This month the company opened its first storefront in Quebec — its sixth in Canada — and more locations are expected in the coming years.
NEW SAMSUNG SHOWROOMS ARE DESIGNED FOR CONSUMER ENGAGEMENT WITH BRAND IN DEDICATED ‘ECOSYSTEM’
Patricia Heath, Vice-President of Retail Excellence at Samsung Canada, said that the retail showrooms are intended to be places where consumers can engage with the brand in a dedicated ‘ecosystem’. That includes learning about products as well as an opportunity for one-on-one customer support. The retail spaces also act to foster “relationships over transactions” she said, also driving sales to Samsung’s wholesale partners and e-commerce website.
The store expansion began with a location in suburban Vancouver in 2012 and more locations are expected to open in Canada in the coming years. The newest Samsung retail space recently opened at the Montreal Eaton Centre in downtown Montreal, spanning about 2,900 square feet on the main level of the mall between a recently opened Pandora store and a Uniqlo flagship store that will open in October.
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NEW SAMSUNG LOCATION FIRST IN CANADA TO FEATURE MODULAR FIXTURES
Ms. Heath explained that the store is the first in Canada to feature modular fixtures as well as an updated design that allows for a cross-merchandising opportunity with Samsung’s Galaxy products showcased. Successful elements from the Montreal store will be rolled-out into other locations.
The Montreal store carries Samsung’s range of products including the all-new Galaxy Note20 Series 5G which the company says are “productivity powerhouses that works like a PC and lets you game like a pro”. Other products carried in the store include an expansive assortment of smartphones, wearables, and tablets.
“The focus is on making sure that our retail spaces are actualizing omni-experiences,” said Ms. Heath. Consumers can order products online and pick them up in the store. Another benefit to the stores are product servicing opportunities including one-on-one support for eduction as well as setting up a device such as a new phone.
SAMSUNG TABLET AND PHONE DISPLAY IN NEW STORE. PHOTO: MAXIME FRECHETTE
SAMSUNG TABLET AND PHONE DISPLAY IN NEW STORE. PHOTO: MAXIME FRECHETTE
On-site service and trained ‘Galaxy Consultants’ are available to answer questions and provide technical support and repairs for mobile products. Appointment-based shopping is available in order to accommodate shoppers concerned about health and safety amid the COVID-19 pandemic.
The showroom model is used by other retailers such as Apple, with stores acting as education and service centres while at the same time driving sales online as well as at partner retailers. Dyson, Canada Goose, and other brands are also using physical showrooms to engage with consumers — the physical space helps to create a sense of legitimacy for the brand.
MORE SAMSUNG SHOWROOMS ARE EXPECTED FOR CANADIAN MARKET
More Canadian Samsung stores are expected according to Ms. Heath, though the expansion will be methodical and based on opportunity. The company’s first Canadian retail store, spanning 1,500 square feet, opened in the spring of 2012 at Metropolis at Metrotown in Burnaby. A second store followed in February of 2014, when Samsung opened a 1,900-square-foot unit at CF Richmond Centre, also in suburban Vancouver (which subsequently closed). A 2,200-square-foot West Edmonton Mall store followed in November of 2014, and a 2,535-square-foot CF Sherway Gardens store in Toronto followed in November of 2015. In the fall of 2016, Samsung opened a 3,345-square-foot space at Toronto’s Yorkdale Shopping Centre. In January of 2018, Samsung’s largest retail store in Canada, by far, opened at CF Toronto Eaton Centre in Toronto spanning more than 21,000 square feet over two levels.
EXTERIOR OF CF SHERWAY GARDENS STAPLES LOCATION. PHOTO: STAPLES
Staples Canada has launched two new unique initiatives as it prepares for a busy — and what could be a longer — back-to-school shopping season this year.
STAPLES LAUNCHES CONTACTLESS CURBSIDE PICKUP SERVICE IN RETROFITTED STORAGE CONTAINER
The company has launched a new retail pilot pop-up shop at its CF Sherway Gardens location in Toronto as part of its popular Contactless Curbside Pickup Service. It includes a giant retrofitted storage container to keep in-store shopping and curbside pickup completely separate, adding an additional degree of safety to shopping for families.
It has also partnered with drug store chain Rexall to provide over 200 stationery products in 300 Rexall locations across Canada. The new concept creates a dedicated area within Rexall stores for in-demand Staples products, such as back to school and home office essentials.
“As a company we rolled out in late March across Canada to every store curbside pickup. So we always had buy online pick up in store but as the pandemic became an issue we’ve made that a core part of our operations and customers love it,” said David Boone, CEO of Staples. “Our store in Sherway Gardens is taking it a step further. We actually built a customized shipping container that’s going to handle all back to school curbside pickups.
“And the reason why we’re trying it here is this is one of our busiest back to school stores in the country. We’re just giving parents and students another easier way to get their supplies from Staples Canada.”
Boone said the company foresees other select locations throughout Canada rolling out different versions of curbside.
“We are working hard to serve families in any way they want to shop where they can feel safe. So we have protocols in all of our stores and we’ve created a safe environment for those that don’t want to come into the store. We have curbside and of course we have a next-day delivery program across Canada as well. We’re positioning to serve Canadians how they want to shop and how they’re comfortable shopping,” he said.
Boone said the shipping container idea will last until the end of the back to school shopping season and the company will likely bring out the idea during other busy seasons like the holidays.
Rexall and Staples Partner to Bring Added Convenience to Canadians (CNW Group/Rexall)
He said the company is experiencing the trend where more and more parents and students are choosing to shop digitally. The retailer’s complete assortment is online. It’s built a back to school headquarters online and next-day shipping is available for back to school shopping across Canada.
“I think what you’re going to see is a back to school season for almost all retailers that is spread out. School boards are staggering their starts. There is some hybrid learning that is starting at different dates. We’re seeing and we expect back to school to be further spread out this year as students start later,” said Boone.
“We definitely believe it’s going to be a longer back to school season.”
STAPLES AND REXALL PARTNERSHIP PLANS TO BRING STORE-WITHIN-STORE EXPERIENCE TO CUSTOMERS
John DeFranco, Chief Commercial Officer for Staples Canada, said Rexall approached Staples just under a year ago wanting to talk about opportunities where Staples could bring a store within a store concept to Rexall.
“The more we spoke with them, the more excited we got about the opportunity,” he said. “They carry some office supplies and back to school supplies in their stores now but they felt Staples could bring additional expertise into the category and introduce them to some brands that they didn’t have before.
“So we started working with them to build out about a 12-foot section in most stores of both back to school and office supplies with both national brand products as well as some of our new own brand products and we put it together and called it Staples Express.”
Nicolas Caprio, President of Rexall, said the company is always looking for new opportunities to expand its service offering and provide patients and customers with convenient, accessible products.
“Not only are we enhancing our best-in-class offerings, we are providing customers with quality office supply products that meet their day to day needs,” he said.
Downtown Toronto city Skyline at twilight in Ontario, Canada
Recently, the Canadian Federation of Independent Business reported that one in seven small businesses in Canada are at risk of going under as a result of the COVID-19 pandemic in addition to the ones that have already closed.
REPORTS FROM CFIB SHOW 1 IN 7 SMALL BUSINESSES AT RISK DUE TO COVID-19
The national organization’s mid-range estimate for small business closures is 158,000.
The restaurant and bar industry, of course, which has already been hit hard, will continue to face steep challenges during this economic crisis that appears to have no end date.
And the ripple effect will have grave consequences for the overall economy.
Larry Isaacs, President of The Firkin Group of Pubs based in Markham, Ontario, with 30 locations including eating establishments, said there could be up to 50 percent of restaurant closures in Canada because of the pandemic.
“You have to remember there is a splinter or fracture that goes out into the marketplace with those restaurants closing down,” said Isaacs. “Aside from the obvious. You’ve got the governments that aren’t going to receive taxes. You’ve got the banks that aren’t going to get their loans paid. Now you’ve got distributors that are waiting for their money. They’re not going to get paid. Therefore, there’s no money coming through the manufacturing sector — impacting the farmers.
“Those are the basic ones. Forget about the plumber, the electrician, the audio visual, the handyman, the music guy. And I could go on and name you a thousand splinters of who are going to get impacted. All of these people and their families. And them paying taxes to the government. So it’s not just a matter of the restaurant shutting down. The economic impact is way more widespread. And you’ve seen it in the retail industry. All these people that are working, they contribute to society by paying taxes. If you take all these taxes off the table where’s the government going to get money to maintain the medical system in Canada. Where are they going to get money to fix the roads and the transport? Where’s the money coming from?”
Isaacs said his establishments closed down the day before St. Patrick’s Day, the biggest revenue generating day of the year for them, and the impact of COVID on the business overall has been “devastating”.
“A restaurant generally works on 30 day payables meaning that September’s revenue will pay August’s bills. We were shut down on the 16th of March and we had to close completely. The Firkin Group is not designed for takeout or delivery. That’s not our operation. Our operation is specifically sit down, watch the sports, have some beers. We were 100 percent closed down except one of our locations tried to do takeout for a little while,” said Isaacs.
“So we had zero income leaving all of our suppliers with no payment. In reopening the business — it’s almost like starting a new business — we’ve got suppliers we have to take care of, we’ve got all this new PPE with masks and hand sanitizers, you have to rebuild your store. And there’s a massive cost to do that. On top of that all we’ve had from (mid) June is patios only (open) and you have to take into account 50 percent distancing. You have to take into account the rain, the wind, the cold nights, the extreme heat. So you have to minus that. And only now in the last couple of weeks have we been able to open the inside at 50 percent.
“At the same time, 50 percent occupancy on the inside of your store. It isn’t really 50 percent because some of the stores are designed that in essence when you lay the tables six feet apart you don’t actually get half of your people. Some of the stores will get only 20 percent, 30 percent, actual occupancy seats where people can sit down. So our biggest concern is we’ve got stuck with no revenue coming in. We had a lot of bills.”
According to Restaurants Canada, restaurants and other foodservice businesses are the fourth-largest source of private sector jobs and number one source of first jobs for Canadians, typically employing 1.2 million people.
RESTAURANTS PLAY A CRITICAL ROLE IN CANADIAN AGRI-FOOD SECTOR
Restaurants support a wide variety of supply chain businesses, indirectly supporting more than 290,000 jobs. Restaurants typically spend more than $30 billion per year on food and beverage purchases, playing a critical role for Canadian farmers and the agri-food sector.
Isaacs said there are three levels of closures facing the restaurant industry. The first has already occurred now since March until today.
“The second piece is going to occur once all the patios close and we move into the fall and into the wintertime. That will be the second closures when people are seeing no patios and you’ve only got half of your restaurant available. They’re not going to be in that revenue,” he said.
“And your third piece is going to come in March and April when you’ve gone through the worst three months of the year — December, January, and February – with no Christmas parties and very little people going out of their homes, you’re going to get the next hit again in March and April.
“So there’s a very good potential that there could be as high as 50 percent (closures) certainly from the independent side. It’s going to be significant unless the government steps in heavily with the rent, payroll relief, tax relief. There has to be a number of helping hands to carry the industry through until May or until the end of the distancing or until there’s a vaccine.”
BARBURRITO LOCATION AT BRAMALEA CITY CENTRE IN BRAMPTON, ONTARIO. PHOTO: BARBURRITO
Food service establishment barBurrito is in expansion mode with the chain exploring markets across Canada and it is open to buying out bankruptcy sales or liquidator opportunities.
The company, which first opened in 2005 in Toronto, currently has 113 locations including a recent opening in the United States in Canton, Michigan. The Canadian locations are spread out from coast to coast from the Maritimes to Nanaimo, B.C.
12 BARBURRITO STORES ARE UNDER CONSTRUCTION POST COVID-19 PANDEMIC
Shawn Saraga, Vice President of Business Development for barBurrito, said the company currently has 12 more stores under construction across the country. There are also 30 more franchisees looking for spaces in Canada.
He said the company believes it can grow to 400 locations over the next seven to 10 years. And barBurrito sees the US as probably a 3,000 store market.
“We’re a Mexican themed restaurant. We are actually licensed to sell beer as well and do sell beer in the majority of our locations. The majority of our locations are on grocery store anchors or Walmart shopping centres, power centre plazas. We’re typically between 1,000 and 1,300 square feet with a small patio,” said Saraga.
“We like high visibility, high street traffic locations. The total investment across Canada ranges from $300,000 to $340,000 for a franchisee of which they need around $100,000 to $125,000 in cash. Our sales on the low end are $400,000 to the high end of $1.6 million.
“We make the best burritos in town. And I’ll tell you the design of the way we make the burritos makes all the difference because our burritos don’t fall apart. You can actually have one of our burritos in your car while you’re driving without making a mess of yourself. And the same with our quesadillas. They’re actually built to hold their own. We have a special rolling technique that rolls it so tight that nothing is going to fall apart when you eat one of our burritos.”
Saraga said the company has aggressive expansion plans in place and it is looking to grow quickly.
“I think we really proved ourselves to the industry and to our franchisees during COVID in the way that we stepped up. When COVID hit, it hit our company the same it hit the rest of the world. Fast and furious,” he said. “Overnight we saw a 70 percent decrease in sales and our President and Founder Alex Shtein did five things that I think made a huge difference in our ability to succeed.
BARBURRITO WAIVED 100% OF FRANCHISEE ROYALTIES IN WAKE OF COVID-19
“The first thing we did is we waived 100 percent of our royalties to all franchisees and I think we’re the only franchisor in North America that actually waived 100 percent of royalties. Everybody else either deferred or reduced. Alex also set aside a quarter million dollars of his own cash as a relief fund to help support our most vulnerable stores. And that went a long way, especially with food court locations. The third that was done was getting on the phone with landlords across the country to renegotiate rents to help our franchisees to be successful. And I believe again we’re the only franchisor in Canada that did that on behalf of our franchisees. Most other franchisors told the franchisees to contact landlords themselves and negotiate their own deals. We took the bull by the horn to make sure that we spearheaded those deals.
“The fourth thing we did is our marketing team came up with a strategy of having corporations sponsor burritos being sent out to frontline health care workers and hospital staff and we matched donations up to $25,000 and sent out almost $70,000 of burritos during the height of COVID-19 to feed frontline health care workers and hospital staff. Lastly, we renegotiated our rates with Uber Eats, Skip The Dishes, and Door Dash and boosted our marketing spend and as a result our sales from last year throughout COVID remained flat. And now we’ve actually seen increases – double digit increases year-over-year from all those efforts.”
As a result of COVID, many restaurants are closing their doors permanently creating plenty of real estate opportunities. Saraga said barBurrito would like to take advantage of that and take over those spaces. The company is approaching bankruptcy trustees, landlords, and realtors on a regular basis. Trustees are an interesting way to get in before the space even hits the market. The company is also talking to other brands that might want to give up space.
The company focuses on power centre and grocery-anchored locations but also likes to be on university and hospital campuses.
Canada’s Competition Bureau is investigating whether Amazon’s conduct on Amazon.ca is impacting competition.
Recently, the Bureau announced it is inviting market participants to provide input to inform its civil investigation into conduct by Amazon. The Bureau’s investigation is ongoing and there is no conclusion of wrongdoing at this time, it said.
CANADA’S COMPETITION BUREAU EXAMINING AMAZON’S IMPACT ON COMPETITION WITHIN MARKET
“The Bureau is examining whether Amazon is engaging in conduct on its Canadian marketplace, Amazon.ca, that is impacting competition to the detriment of consumers and companies that do business in Canada,” explained the Bureau on its website.
“The Bureau is conducting its investigation under the restrictive trade practices provisions of the Competition Act, with a focus on potential abuse of dominance.”
It said areas of interest include:
any past or existing Amazon policies which may impact third-party sellers’ willingness to offer their products for sale at a lower price on other retail channels, such as their own websites or other online marketplaces;
the ability of third-party sellers to succeed on Amazon’s marketplace without using its “Fulfilment By Amazon” service or advertising on Amazon.ca; and
any efforts or strategies by Amazon that may influence consumers to purchase products it offers for sale over those offered by competing sellers.
EXPERT SAYS AMAZON HAS HAD LONG-TERM DISRUPTIVE IMPACT ON CANADIAN RETAIL MAKETS
Gary Newbury, a retail supply chain strategist and serial transformation executive, said Amazon has had a long-term disruptive impact on retail markets due to its ability to both offer a substantial assortment and provide an efficient service to residential addresses unmatched by most small or mid-sized retailers.
“This has forced many retailers to re-evaluate their go-to-market strategies and bring about change. Some retailers have been successful, many have not made changes to compete effectively, despite them having a clear advantage with branding, last mile potential and continuing to build on personal service/customer experience. After all Amazon does have a ‘transaction’ rather than relationship building nature to it,” he said.
“As we approached 2020, having had a lacklustre 2019 trading, January had a rash of store closures and now the deep impact of COVID-19 has driven retailers to raise their concerns on Amazon’s practice of reviewing sellers of fast moving products on their marketplace, find a supplier who could produce an ‘Amazon own label’ and then position it visibly on the virtual shelf with a price point to attract consumers looking for a good deal. The advantage Amazon has is immense data analytics capabilities and a keenness to be the most customer centric retailer in the world.”
He said the practice of retailers checking out competitors’ products, price pointing, and volumes is decades old. Their very existence — and certainly their loyalty building programs — necessitates the development of similar, but slightly differentiated products. Even data on national brands sold through their banners will provide information on where future new product opportunities are.
“Furthermore, it is, perhaps, a less talked about practice of manufacturers developing private label products with a retailer, and then talking to their competitors, making some minor formula changes, repackaging, providing some ‘marketing support’, and hey presto, your competitor has quickly launched a directly competing product,” said Newbury.
“If you go to your local store and look at the positioning of private labels and national brands, price points and overall visual merchandising, you’ll likely see this in action every day. All Amazon has been able to do is to bring more analysis and data science to this situation (i.e. they are more efficient) with a view to drive their sales of own label products. If the national brands have built sufficient loyalty, they might see a slight dip, however, just as the national brand will place itself in various retailers looking to build volume, there is always a risk the same banner (or a competitor) will develop an own label to compete directly with it.”
Despite the cries of “it’s unfair”, logically the Competition Bureau should conclude “nothing to see here”, although to placate the concerns of legacy retailers they may make noises about there being a “borderline” case of merit, he explained. At the end of the day, it is in every retailer’s interest to attract consumers to their stores and persuade them to buy to meet their needs and wants. Amazon is no different in this regard, added Newbury.
“Legacy retailers must up their game, especially during this time, to differentiate the value they can provide to consumers through a combination of their store formats and online proposition. After all, Amazon.ca is a relatively new arrival. Many retailers have been here for decades and need to reinvent their propositions to win, rather than exercise the time of the competition bureau. Amazon is here to stay! Their consumers will see to that with their wallets,” he said.
EXPERT SAYS AMAZON IS AN EASY TARGET AND MAY BE BEING USED AS A SCAPEGOAT
Bruce Winder, author of RETAIL Before, During & After COVID-19 and President of Bruce Winder Retail, said the Bureau investigation signals that e-commerce and specifically Amazon-powered e-commerce has hit the tipping point in Canada.
“With COVID-19, the importance of online shopping has grown significantly and thus has received more attention from small merchants trying to generate cash via e-commerce to stay afloat,” he said.
“Amazon has now arrived at the point where they are an easy target — similar to the role Walmart played in the 1990’s — and an easy scapegoat for the consolidation that’s been hurting the retail industry over the last few years. In Canada, we operate in a retail oligopoly with few players controlling a large portion of the market. With this much concentrated power comes the temptation and potentially realization of market abuse.
“In my opinion, what Amazon is doing is really not that different than other large retailers — having worked at big retail for over two decades.”
He said large retailers are notorious for using their market size and dominance to persuade suppliers and other partners to comply with their demands. Big retail will engage in channel management activities that help semi-control the marketplace to their advantage while straddling the line between being onside and offside from a legal perspective. They also use supplier “partnership” programs to sell advertising packages that give participating vendors better positioning in flyers, online and in-store.
AMAZON PRIME PACKAGE BEING DELIVERED
“Big retailers have been using private label programs for decades which are designed to offer better value than competing national brand products while improving retailer gross margin. Sometimes these retailers “knock off” national brands with their own products and place these products “in the strike zone” on shelf or online to persuade the consumer to buy the private label over the national brand,” said Winder.
“Governments around the world have felt pressure from citizenry and small business to tame dominant players through antitrust investigations. Will these investigations yield legislation? Time will tell. Big firms spend billions of dollars on lobbyists to counter this offensive. Does Canada need regulation to protect consumers and small businesses? I say yes. Is Amazon any different than other large retailers? I say no.”
Michael Kehoe, a retail real estate specialist with Fairfield Commercial Real Estate in Calgary, said the Bureau investigation of Amazon will attempt to determine if Canadian retailers have been disadvantaged by not being allowed to list on Amazon.
“The importance of having a level playing field in an extremely competitive industry is of the utmost importance. The results of the scrutiny of this government agency could influence the future of our free-market retail landscape,” he said.
PERSON USING CREDIT CARD AND LAPTOP TO SHOP ONLINE
A new survey suggests Canadians are much more concerned about the safety of online shopping compared with consumers in the United States.
The survey, which was commissioned by ClearSale and conducted by Sapio Research, found that 26 percent of Canadians say online shopping is somewhat or a lot less safe than brick-and-mortar retail compared to 13 percent of Americans who felt that way.
Rafael Lourenco, EVP and Partner at ClearSale, which specializes in e-commerce fraud protection services, said when it comes to credit card fraud the retailers will have to pursue the money lost in the transaction and swallow the losses.
“Even though there is not a direct financial loss (for consumers) obviously the inconvenience is there meaning if someone (compromises) your credit card you may have to get another one and as a consumer they may be afraid of personal data being utilized in other types of fraud,” said Lourenco.
“Consumers don’t want to have their personal data info getting involved with fraud attempts and with fraud-like behaviour. On the other hand, consumers don’t want to have a bad customer experience by any of those extra layers of protection on the website blocking them from making their purchase.
“The concern on the merchant’s side should address both concerns on the consumer’s side.”
Some key findings of the survey include:
77 percent of survey respondents say they would be more likely to shop online from vendors that offer fraud protection;
38 percent of respondents said that they would never order from that merchant again if a merchant declined their payment (compared to 33 percent of Americans);
25 percent said that would likely post a negative comment on social media after having a transaction denied by a merchant;
46 percent said they would not even try one more time if a merchant declined their payment (instead, they would move on to another merchant); and
40 percent of Canadians said they have abandoned a purchase online because of a checkout process that was too long or too complicated.
Lourenco said there is an important shift these days to online channels and ecommerce is becoming an important sales channel for many retailers. It is therefore important for them to make the purchase experience for consumers as seamless as possible and to alleviate any concerns about fraud by putting protective measures in place.
Stephen O’Keefe, a Toronto-based veteran of the retail industry and loss prevention industry, said retailers need to protect themselves against fraud and even thefts like ‘porch pirates’.
“The loss prevention focus is really in its infancy and because of the geographic climate it’s very expensive to conduct physical surveillance and so just as the customer is shopping using technology the retailer also needs to invest in technology that will protect themselves,” he said.
O’Keefe is President of Bottom Line Matters, a web-based loss prevention and risk management solutions company for small to mid-sized retailers.
He has had many years of experience with some of the giant retailers in Canada and globally. O’Keefe was Walmart Canada’s VP Loss Prevention & Risk Management. He currently advises on loss prevention affecting shrinkage and profitability for retailers and has more than 30 years experience in retail theft prevention with some of Canada’s largest retailers.
He is considered a leading authority on loss prevention, security, risk management, health and safety, and process improvement.
The retailers’ focus is so much on the growth in the online market and a race to the finish. But O’Keefe said there are preventative measures that should be incorporated with the operation of an online business.
“For example, the porch theft. If a customer calls and says ‘hey I didn’t receive my package’ the retailer is not going to challenge that and say that the customer did receive it. They’re going to assume that it was stolen and they’re going to replace the item and they’re going to offset the cost of the replacement through a customer service account.”
Retailers are faced with a decision of whether they increase operating costs with a risk mitigation plan or do they accept the risk and operate with lower quality of service.
“That’s a question that a lot of businesses are going to have in the near future if not already,” said O’Keefe.
The ClearSale report outlined five key trends:
The Increase in Frequency of Online Shopping
Almost half of online shoppers shop at least once every two weeks with many saying their online shopping has increased recently. People are shopping online because it’s quicker, cheaper and has a wider selection.
The Fear Around Online Fraud
Many believe online shopping is safer or at least as safe as high street shopping, however the biggest concerns for those who disagree are around the storing of their personal details and security measures used by the retailers they’re buying from. Shoppers would be more likely to use a website if reassured they were protected by the retailer instead.
Awareness and Protective Measures
Nine in 10 agree security is very important when shopping online. However only half always take security measures such as checking website legitimacy and using eWallets instead of card numbers. This indicates a mismatch between what they want and what they do on their part, though there is not much of a difference between those who have been victims of fraud and those who have not.
Differences Between the Older and Younger Generations
Older shoppers are more aware of fraud and more open to methods of protection. Although they are less put off from risks than younger shoppers, if they become victims they will be much less likely to return to the same website.
Shoppers are Happy to be Protected
Two thirds believe retailers should use tech for protection, and many would not be put off from online shopping by this. This suggests a willingness and openness to change. Change could be important, as a third believe it’s the website’s responsibility to protect them and would not return if they became a victim of fraud.
COVID-19 Pandemic has changed the way many businesses in the world operate. Every business has a story to tell on how they were affected. Many Canadian Retail businesses could not operate using cash and had to find other solutions. In the process, some store owners started taking payment alternatives, which involves cashless means, to keep business still going.
The truth is: contraction of the disease takes any form, and everyone is trying to be safe during this time. Therefore, most stores would rather you pay with debit or credit card, e-Wallet, Cryptocurrency, etc., than receive cash as payment. On the other hand, a few stores still accept cash payments. According to The Bank of Canada, the choice depends on the seller whether to receive or not.
Also, there are limitations to the use of these cashless payments in retail businesses. For instance, Michael Bryant, who is the CCLA (Canadian Civil Liberties Association) Executive Director and General Counsel, believes that cashless policy is quite discriminatory against a special set of people. Examples of people who may not find the alternative payment, i.e., debit/credit card, quite easy include Seniors, Handicaps, the Less-privileged, and so on. He says: “Stores are taking out opportunities from these people, and it threatens their survival.”
Before the Pandemic, Canada had the option of a card-based payment for about 70% purchases. However, two popular industries that used the cashless payment method were Online Gaming and eCommerce.
Industries that Used Cashless Payment Before the Pandemic
Internet based industries have been using online payments for years, E-commerce shops and online gaming are great examples of industries that have successfully implemented cashless payments.
The Online Gaming industry has several options available for paying online. When playing online for real money you must make sure to have a secure and safe way to deposit your money. Most online casinos accept payment via e-Wallet (Neteller, Skrill), Card (VISA, MasterCard), or Cryptocurrency (Bitcoin). Bank wire transfer is not exempted either.
While many online casinos in Canada have already started using PayPal, many European countries like Ireland still don’t have as many online casinos that accept PayPal as a payment method. That means cashless payments in casinos varies depending on the country.
The Ecommerce Industry has also been growing tremendously over the years and there is no doubt the use of online payment methods has added to this success. Several people rather stay at home and order for their personal needs online, such as fashion items, gadgets, and so on. In a bid, they are prompted to card payments, which is quicker and faster.
According to Statista, the use of a credit cards while shopping online has been growing drastically since 2014. In comparison to European countries like France, where the use of credit cards is growing but not as fast. The upside of this is that the ecommerce industry would not be affected by the Pandemic in terms of payment.
Also, there are more cashless payment organizations in Canada, compared to Europe. Thus, the survival of the industry depends on this factor.
