A Vancouver-based footwear retailer has turned the concept of ‘doing good’ into a smart business practice as the company has three times its sales since embarking on the community goodwill initiative.
Vessi, a direct to consumer sneaker company, recently turned to its online community to ask how it could give back and then launched a series of initiatives for COVID-19 (coronavirus) relief.
Tony Yu, co-founder of the company who focuses on the marketing and business development and strategy side of the business, said giving back to the community is the right thing to do.
“The community is like what brought us up. If we can give back to our community, we’re effectively making our home even a better place,” said Yu. “It’s one of the core things from our founders’ perspective but we also feel kind of obligated to help be that voice of our customers. How can we give back?”
“We shifted a lot of our existing marketing budget over to community relief efforts.”
The online retailer has given away 2,000 free sneakers to health-care workers, launched a ‘pay what you can’ model to donate 400,000 face masks, and created a Community Fund Program to give away $100,000 for initiatives launched in the community. It also started Vessi TV giving the community ways to stay healthy and cope with the coronavirus crisis.
Yu said the fund supports small community projects - everything from volunteers delivering groceries and medicine, to people making face masks and personal protective equipment.
“However we can use this fund to enable small pockets of happiness now that’s really the mandate,” he said.
Vessi was founded in 2017 but it launched publicly in September 2018.
COVID-19 definitely put a damper on the retailer’s expansion plans.
“We’ve had a really good experience with retail stores when we set up our pop up stores. So that was a pretty big disappointment. We were in the process of actually designing a proper retail front. We have our locations really set up like an experience centre. You can walk into the store, slip on a pair of shoes from our shoe bar and then walk through water inside the stores. We’ve built out this whole feature set,” said Yu.
But when that was put on hold the company began thinking creatively on how it could help the community and give back to the community.
The latest data from Statistics Canada show an uptick in retail sales trends pretty much across the board. But these numbers are for February 2020, more or less the last month of the pre-COVID-19 era. It was in March that social distancing, self-isolation, store shutdowns, and shopping mall closures began in earnest. The recent numbers are the calm before the storm, and probably just a rebound from weak performance in 2019.
There’s no point in commenting on the latest retail sales numbers because the trends are about to go south in a hurry. The U.S. Census Bureau has released advance March retail data that show huge sales declines in most areas of retail.
The one sector that stands to gain from the current situation however is e-commerce. Many consumers are avoiding stores and switching to online shopping, so much so that it’s putting a strain on delivery services. Some of this is likely to be a permanent gain for e-commerce – we just don’t know how much.
Food & Drug
For the 3 months ending February 2020, retail sales in the Food & Drug sector were up 3.6% year over-year. This is the highest this measure has been since Q3 2018. The short term 3 month trend (orange line in the chart) has been steadily improving of late, to the point that the underlying 12 month trend (green line) is now recovering as well.
Retail sales at supermarkets & other grocery stores were up a relatively strong 4.9% year-over-year for the 3 months ending February 2020. Health and personal care stores’ sales gained 2.8% during the period, which was above average compared to recent months.
Food & Drug is very likely to be the strongest sector in the next few months. Grocery and drug stores sell essential products, and have also taken a number of measures to protect shoppers and staff from COVID-19. Consumer hoarding however implies that there might be a backlash at some point. If there’s plenty of toilet paper in the stores and you still have 500 rolls in your basement, you probably won’t be buying it for a while.
Store Merchandise
Store Merchandise sector retail sales were up an “okay” 3.2% year-over-year for the 3 months ending February 2020. While not exactly setting the world on fire, this was still the second highest such result in a year and a half, and had the effect of modestly pulling up the underlying 12 month trend.
Nevertheless, all bets are off in Store Merchandise. Many retailers in the sector are simply not operating or are proceeding with very diminished sales based on their e-commerce efforts. In many cases however, e-commerce capabilities were not well established to begin with, leaving the door wide open for other operators to come in and take over.
Other areas in Store Merchandise may have additional issues. With greater economic uncertainty, consumers tend to avoid major purchases like furniture and appliances. The decline of house sales also implies less demand for home improvement and related products.
On the other hand, computers and business supplies may be enjoying somewhat of a surge in demand, as people working at home upgrade their equipment. This however is likely to be a temporary event.
Note that Statistics Canada is now suppressing the breakdown of general merchandise stores for confidentiality reasons. The figures in the “By The Numbers” table below are estimates based on previous trends.
Automotive & Related
Recent data for the Automotive & Related retail sector may be the most deceiving of all. While the chart indicates a recent surge in retail sales, this is about to drastically change.
Due to the COVID-19 crises, vehicle sales started to decline rapidly in March. As unemployment rapidly rises, people become concerned about their jobs and are reluctant to take on big purchases like a new car.
After a decline in 2019, gas station sales were up 7.6% over the first two months of 2020 on the strength of higher pump prices. Since then however, oil prices have collapsed and gasoline has become cheap again. People are driving less too, due to working at home and the closure of many public facilities from parks to shopping malls.
By The Numbers
Special Note: Statistics Canada revised historical data with the February 2019 release. Unadjusted monthly data were revised back to January 2018, while seasonally adjusted data were revised back to January 2015. Those keeping score should update their files. The analysis in this report is always based on unadjusted data.
Canadian E-Commerce Sales
StatsCan started providing ecommerce retail sales data in January 2016. While the amount of data is limited, some trends appear to be emerging. Here are some results.
Overall, e-commerce represented about 3.6% of Canadian retail sales for the 12 months ending February 2020, including both pure play sellers as well as the online operations of brick & mortar stores. This number is expected to increase sharply in the months ahead as people switch to online shopping to cope with the COVID-1 pandemic. Canadian consumers however also buy online from foreign websites which is not captured in these numbers.
Canadian e-commerce sales were up 25.6% year-over-year for the 3 months ending February 2020. This was much higher than for location based retail which gained 3.9%. Year-over-year growth of e-commerce sales is expected to increase significantly in the next few months.
Note that location based retail is the same as that in the preceding “By The Numbers” table. It’s what’s normally reported as Canadian retail sales. Except that it isn’t. Location based retail excludes another section called Non-Store Retailers (NAICS code 454), which includes electronic shopping and mail-order houses, which in turn is where (mostly) pure play e-commerce businesses are. For the 12 months ending February 2020, electronic shopping and mail-order houses had an estimated $14.8 billion in e-commerce sales.
But that’s not the only source of e-commerce, as (mostly) bricks & mortar location-based retailers also sell online. For the 12 months ending February 2020, this group had an estimated $7.9 billion in e-commerce sales. With electronic shopping and mail-order houses, there’s a grand total of $22.7 billion in e-commerce sales by Canadian operators, up 22.8% over the previous year. Note that this does not include foreign e-commerce purchases made by Canadian consumers, but it does include e-commerce purchases made by foreigners at Canadian operations.
For electronic shopping and mail-order houses, an estimated 85.8% of their sales are allocated to e-commerce. For (mostly) bricks & mortar retailers, it can be estimated that just 1.3% of their total sales are attributable to e-commerce.
In the final section of the above table, (mostly) pure play operators (namely, under electronic shopping and mail-order houses) generated an estimated 65.0% of all e-commerce sales in Canada, while (mostly) bricks & mortar location-based retailers’ share of e-commerce was 35.0%.
An off-schedule podcast panel discussion with Carl Boutet, the Chief Strategist and Board Advisor for Studio RX for retail strategies. Mr. Boutet discusses how the COVID-19 (coronavirus) shutdowns are having a profound effect on the Canadian retail industry, including the demise of struggling chains as well as an acceleration of innovations that were already in the works.
The Weekly podcast by Retail Insider Canada is available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players.
“More help is on the way for our small businesses across the country. They are the backbone of our families, our communities, and our economy. That is why we will continue working closely with provinces and territories to make sure that Canadian businesses have the support they need during these difficult times,” said Trudeau.
The federal government gave the following details about CECRA:
The program will provide forgivable loans to qualifying commercial property owners to cover 50 per cent of three monthly rent payments that are payable by eligible small business tenants who are experiencing financial hardship during April, May, and June;
The loans will be forgiven if the mortgaged property owner agrees to reduce the eligible small business tenants’ rent by at least 75 per cent for the three corresponding months under a rent forgiveness agreement, which will include a term not to evict the tenant while the agreement is in place. The small business tenant would cover the remainder, up to 25 per cent of the rent; and
Impacted small business tenants are businesses paying less than $50,000 per month in rent and who have temporarily ceased operations or have experienced at least a 70 per cent drop in pre-COVID-19 revenues. This support will also be available to non-profit and charitable organizations.
The Canada Mortgage and Housing Corporation will administer and deliver the CECRA, a collaboration between the federal government and provincial and territorial governments, which are responsible for property owner-tenant relationships.
PEDESTRIANS WALKING PAST RETAIL OUTLETS ALONG STEPHEN AVE IN AUTUMN, CALGARY, ALBERTA. STEPHEN AVE IS A FAMOUS PEDESTRIAN MALL IN DOWNTOWN CALGARY. PHOTO: VIEWFINDER – STOCK.ADOBE.COM
Provinces and territories have agreed to cost share total costs and facilitate implementation of the program. They will cost share up to 25 per cent of costs, subject to terms of agreements with the federal government. It is expected that CECRA will be operational by mid-May, with commercial property owners lowering the rents of their small business tenant’s payable for the months of April and May, retroactively, and for June.
“Small businesses are an integral part of our economy and are vital for families and communities across the country. Many businesses are facing economic hardship and uncertainty during the COVID-19 pandemic. We thank and commend the many property owners who have already taken action to help their tenants during this crisis. Today’s program will provide forgivable loans to commercial property owners who in turn will lower the rent of tenants to keep them prepared to bounce back when this crisis subsides,” said Bill Morneau, Minister of Finance.
“RCC had been advocating for this relief program for quite some time and was part and parcel of the discussions with senior officials in Ottawa to ensure it saw the light of day,” she said. “We continue to also advocate for Part II of this program to ensure that mid and large retailers who have been severely affected by this crisis and who are not considered essential retail services receive rent support as well. Our small, mid and large retailers are integral to the health and wellbeing of the retail ecosystem in this country and we will continue to work hard to represent them.”
David Lefebvre, Restaurants Canada Vice President, Federal and Quebec, said the organization commends the federal and provincial governments for stepping up and providing a solution to help restaurants with their rent obligations during these extraordinarily difficult times.
“A lot of what is being offered seems to respond to our recommendations. We are glad this has now been brought to the table so that we can move forward from here and build on any areas where there might still be gaps,” said Lefebvre.
VANCOUVER’S FAMOUS GRANVILLE ISLAND PUBLIC MARKET WITH NUMEROUS SMALL BUSINESSES AND MERCHANTS
Laura Jones, Executive Vice-President of the Canadian Federation of Independent Business, said the organization is pleased to see the federal government move forward with the provinces to implement its Canada Emergency Commercial Rent Assistance. Several provisions that CFIB was looking for were included in today’s announcement: the program is retroactive to April and will provide rent forgiveness rather than just loans, she added.
LAURA JONES. PHOTO: LINKEDIN
“However, CFIB also has some concerns including that the program may be too complicated and too reliant on landlords to administer. In particular, as landlords do not have to participate and will be expected to accept some losses under the program, they may choose to ignore it, even if their tenants badly need it. Another concern is that the all-or-nothing threshold of a 70 per cent revenue reduction will leave many hard-hit businesses without the relief they need,” said Jones.
“We appreciate the enormous challenge in designing support programs and getting them out quickly. As they have done with other big programs, our hope is that governments will be open to suggestions for improvement as it becomes apparent in real time what works and what doesn’t. We have a survey going out tonight to small businesses across the country to get more reaction.
Halifax, Canada – June 18, 2019: Shops near the Halifax, Nova Scotia waterfront along the Historic Properties Market Mall
“CFIB urges landlords to accept the program and work with their tenants in good standing to ensure they can access the help they need. Hopefully this program will help many of the businesses that have been hardest hit, particularly those ordered to shut down entirely. This is welcome news but many business owners with dramatic revenue losses will not qualify for the program. More help from provincial governments to cover those falling through the eligibility cracks of federal programs is needed to get through this. The limitations of these programs underscore the need to get businesses back in business as soon as it’s safe to do so.”
According to a recent CFIB survey:
More than 40 per cent of small businesses have seen a revenue drop of 70 per cent or more and should be eligible for the new program;
More than 50 per cent of small businesses are not able to pay rent without support, and this number is as high as 75 per cent for the hospitality sector;
54 per cent trust their landlord to be reasonable, 33 per cent do not; and
75 per cent believe the cost of commercial rent that cannot be paid due to COVID-19 revenue losses should be shared between governments, landlords and tenants, with 19 per cent disagreeing.
MICHAEL KEHOE. PHOTO: LINKEDIN
Michael Kehoe, Lead Ambassador in Canada for the New-York based International Council of Shopping Centres, said the Canada Emergency Commercial Rent Assistance for small businesses is an important component within the consumer real estate transactional chain that stakeholders have been waiting for.
“This will go a long way to ensure that there are retail and restaurant environments to return to when shopping and dining venues reopen. The program along with other measures will serve as a bridge that is needed to make the landlord and tenant relationship work effectively in these troubling times. I commend both levels of government for their proactive approach to the problem that affects ordinary Canadians in every jurisdiction,” said Kehoe, a veteran of more than 40 years in the industry and broker/owner of Fairfield Commercial Real Estate in Calgary.
Grace Yan, a commercial real estate agent with Coldwell Banker Mountain Central in Calgary, said the federal government move is a step in the right direction, but time is running out and the process is way too slow.
“The relief offered has too many strings attached and businesses must go through a qualification process which is complicated and convoluted. Over 50 per cent of businesses will not be able to reopen – it has taken far too long for the government to implement relief,” she said.
“The process needs to be fast tracked with no strings attached, The funding needs to be quick and in the hands of businesses immediately. So far implementation and obtaining details has been weeks and businesses do not have that much time. As fast as businesses were mandated to shut then relief should have been available just as fast. We need Prime Minister Trudeau to disclose a proper organized plan for businesses to reopen safely and a proper relief structure that will enable businesses to survive. Support for businesses must be from all levels of government as without the businesses there will be no jobs for people to go back to.”
“Canada’s economic recovery and future prosperity depends in large part on all levels of government recognizing the fundamental need to support the commercial real estate industry and the tenants we house,” he said. “We are therefore encouraged that the federal government is recognizing the fundamental need to support our sector, though many details in today’s announcement have yet to be released.
“BOMA Canada is therefore very anxious to learn more about this program including how it interacts with other government support programs. It seems encouraging to know that some measure of relief is coming, but without more detail, we cannot say much more.”
Swob is an award-winning social recruiting platform developed to help employers in high turnover industries such as Grocery, Food Service, Hospitality and Retail, find local talent using our recruiting platform. Swob currently has over 20,000+ students and young job seekers using the platform, who are actively searching for part-time, temporary, and even full-time employment.
Given the current COVID-19 environment, we recognize that we are living in uncertain times. This has had a material effect on both people seeking employment and for employers who are actively seeking candidates. In order to make sure our users feel prepared, we have started hosting a weekly webinar, which we live stream on our Facebook page, providing insights and tips our users can use when searching for employment. The purpose of the webinars is to ensure that anyone actively looking for a job is well prepared and understands what employers are looking for in a candidate.
SWOB CO-FOUNDERS STEPHANIE AND ALEXANDER FLORIO SPEAK AT THE ELEVATE CONFERENCE IN 2019.
Students and young job seekers are always providing us insight regarding how difficult it is to connect with employers, which is why Swob was developed to help this underserved audience. While many individuals across Canada are no longer working out of fear of catching COVID-19, many students are still actively pursuing job opportunities. In speaking with our users, many recognize they are least at risk to catch COVID- 19, and want to work.
When Swob was developed, we wanted to ensure that we built the most effective and convenient platform for employers, which is why we spent time meeting with the human resource departments at companies like McDonald’s Canada and Recipe Unlimited to understand what they would like to see in a recruiting platform. We were surprised to learn that many companies struggle to recruit young talent, and that many employers are looking for new innovative solutions. All of the features available on Swob came from employer feedback, as it was evident that the job boards already available were not sufficient in helping employers with their recruitment efforts.
It is becoming especially difficult for some employers to find staff during the COVID-19 pandemic, and we are ensuring we are offering whatever support to employers we can. In the current environment, while many companies are temporarily closed, others like grocery retailers are struggling to find people and Swob has successfully helped to bring them suitable candidates. A member from the Store Operations team at M&M Food Market recently had this to say about their experience using Swob:
“We use Swob to recruit for general temporary help for our 300+ locations across Canada during the pandemic. The initial set up of our ads went very quickly and the admins’ responses to any questions we did have was timely and helpful. The platform is easy to use and we particularly liked the feature that allows us to copy a previous ad. This is very useful when we are recruiting for the same position across the network.”
In addition, the Canadian government is offering wage subsidies to companies who want to retain or hire new staff. Employers who hire summer students are now able to apply for a subsidy of up to 100 per cent of the provincial or territorial hourly minimum wage, which will help put more Canadians back at work.
We understand that this is a difficult time for everyone, and at Swob, the goal is to make recruitment as easy as possible for employers. Under normal conditions, employers who sign up to use Swob receive a 30-day free trial, however, for the month of April, we are offering a 90-day free trial to use Swob and hire great candidates. This takes away the worry of cost, and help make recruitment painless.
To date, Swob has helped many young job seekers and students find meaningful employment across Canada. Find out why companies such as Leon’s Furniture, Lone Star Texas Grill, Cactus Club, Pizzaville and others have made the switch and are now using Swob to hire great local candidates.
Let Swob focus on bringing the right candidates to you.
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Swob partnered with Retail Insider for this message. To work with Retail Insider, email: darryl@retail-insider.com
Over half of small businesses in Canada will not be able to pay May rent without additional support and there is an urgent need for provinces to work with the federal government to deliver rent relief as soon as possible.
In his daily briefing on April 16, Prime Minister Justin Trudeau promised that rent relief was coming soon for Canadian small business owners. But since then — a week later — there has been no update and nothing small businesses can take to the bank and give them some peace of mind.
“Businesses and commercial property owners are also facing specific challenges because of COVID-19. So we plan on introducing the Canada Emergency Commercial Rent Assistance. This program will provide support to help small businesses with their rent for the months of April, May, and June. To implement this program, we have to work with the provinces and territories as they govern rental relationships and we hope to have more details to share very soon,” he said.
Karl Littler, Senior Vice-President, Public Affairs with the Retail Council of Canada, said “people are eagerly awaiting the flesh on the bones from the Prime Minister’s announcement.”
“But recognize ultimately that it’s a fairly complex topic to address in part because there may be some relevant provincial actions required here,” said Littler. “The federal government is going to want to make sure there’s an apportionment here of the negative impacts of COVID-19 such as they aren’t all borne by the tenants. Some recognition by the landlords that if there’s going to be support in this space landlords too are going to have to take a haircut by way of an abatement not just by way of deferral.
“There’s going to be a need to ensure that landlords don’t then scoop it back in some sort of rent increase. In order to focus everybody’s minds on finding common solutions there may well be a requirement at the provincial level to ensure that there are no commercial evictions for a period.”
Littler said he believes the federal government will step up big time financially to ensure that rent essentially gets paid on time which helps to protect the ecosystem with some conditions attached – freezing rental rates for a period, barring commercial evictions for a period, some abatement by landlords, and tenants will have to take on some debt under federal terms.
“April 1 was scary, and it’s important to get the right government relief in place fast to prevent May 1 from being a nightmare on Main Street,” said Laura Jones, executive vice-president of CFIB.
“People white-knuckled their way through April. People have savings. People are dipping into their credit cards. For some people those emergency business accounts were available, those emergency business loans, but the longer this goes on it gets exponentially more difficult for people to cope with because you’ve deprived many businesses of sales. And sales is oxygen to business. That’s what it feels like literally and that’s how they describe it too. They describe feeling like they’re drowning. Drowning in debt. Drowning in despair.”
In the past few years there has been increasing talk about the retail apocalypse. But that talk could be a living reality for many small retailers across the country very soon as the COVID-19 (coronavirus) pandemic has closed their businesses and gutted their revenues while they still have fixed costs to take care of such as rent to landlords.
She said rent relief is urgently needed as only one in five businesses is fully open and revenue declines are dramatic for nearly all small firms. And the critical time for relief is now.
“Last week the federal government announced a new rent program, I know many business owners are anxiously waiting for the details as the stress of having bills mount with no revenue is getting more intense,” said Jones.
“Anxiety is high. Small businesses are very nervous about May rent. They’re cautiously optimistic because the government has announced the program but like with many of these programs the announcement comes before the details. I think there are a lot of small businesses that are holding their breath right now.”
A recent CFIB survey of small business owners found:
92 percent think provincial governments should provide protection to commercial tenants to prevent evictions during the COVID-19 emergency;
91 percent agree that for rent assistance to be meaningful, it needs to be grants or rent forgiveness, not just loans/deferrals;
75 percent believe the cost of commercial rent that cannot be paid due to COVID-19 revenue losses should be shared between governments, landlords and tenants, with 19 per cent disagreeing;
Over half (58 percent) will not be able to pay May rent in full without further assistance (up from 25 per cent for April), compared to 37 percent who say they can pay, while the rest don’t know; and
54 percent trust their landlord to be reasonable, 33 percent do not.
As the first day of May looms large in just a few days, retailers, food service tenants, landlords, and everyone along the consumer real estate transactional chain are working together to ensure that there are retail and restaurant environments to return to when shopping and dining venues reopen, said Michael Kehoe, Lead Ambassador in Canada for the New-York based International Council of Shopping Centres.
“All parties await details on a federal program related to commercial space rent payments that was briefly mentioned by the Prime Minister, but with no information on the timing etc. The uncertainty with this, and so many other matters currently, is unsettling for the entire industry that can’t afford to wait,” said Kehoe, a veteran of more than 40 years in the industry and broker/owner of Fairfield Commercial Real Estate in Calgary.
“According to several medium to large scale consumer real estate landlords, on-time contracted April rent payments were in the 60-70 percent range but May 1 could be a different story. A cooperative and non-confrontational landlord and tenant relationship is more important than ever with communication channels wide open and all creative solutions on the table.
“I am sure that there are many heart-to-heart conversations under way at this time working on solutions to ensure that, as the weeks that could turn into months, that the entire consumer real estate industry avoids being jeopardized so that there is limited long-term damage, rampant unemployment and irreparable harm to our favourite shopping and dining venues. We need a consumer real estate sector left to serve shoppers in communities across Canada post crisis that is vital to our way of life.”
A new survey released Thursday by Restaurants Canada revealed that nearly all foodservice businesses are concerned about their current debt levels, and many won’t survive the impacts of COVID-19 without longer-term solutions.
The survey found that 75 percent of respondents said they are either very or extremely concerned about their current level of debt; one out of every two independent restaurants does not expect to survive if conditions don’t improve over the next three months; most multi-unit foodservice businesses will have to permanently shut down at least one of their locations if conditions don’t improve over the next three months; and at least three quarters of respondents identified rent as a main source of debt for their operations, reinforcing the urgent need for relief in this area.
“Even the most experienced restaurateurs are struggling to meet their rent obligations, through no fault of their own, due to the unprecedented circumstances we’re all now facing,” said Shanna Munro, Restaurants Canada President and CEO. “COVID-19 has taken a devastating toll on small businesses, with restaurants being among the hardest hit. Even once restrictions are eased, they’re still going to need help to avoid closing down due to crushing levels of debt.”
Restaurants Canada recommends:
An immediate moratorium on evictions and lock-outs for commercial tenants. This would relieve pressure while stakeholders continue to develop solutions for the long term. Many restaurants haven’t been able to pay rent this month and are now at risk;
Rent assistance at a percentage in line with decreased revenue. Deferrals and loans can help in the short term, but in the long term will contribute to more permanent closures due to insurmountable debt if not combined with mechanisms for relief; and
Measures that continue while the economy is still in recovery. Foodservice businesses will need a sustained period of support to ramp back up while consumer spending rebounds. Restaurants Canada recommends continuing rent relief measures until businesses have returned to a fixed percentage of pre-COVID-19 revenues.
“Restaurants Canada commends the federal government for leading a coordinated effort with the provinces and territories toward the creation of a Canada Emergency Commercial Rent Assistance program,” said David Lefebvre, Restaurants Canada Vice President, Federal and Quebec. “We look forward to ensuring the needs of foodservice businesses are addressed as part of this program so that they will be able to remain viable as the economy recovers from COVID-19.”
Marketplace eBay Canada has launched its Up & Running initiative, an accelerator program specifically designed to support retailers, without an e-commerce presence, transition to selling online.
The initiative will also help existing online businesses create a channel to reach millions of customers worldwide. In addition to onboarding resources and tools, eBay Canada is waiving selling fees and offering a free basic store for a three-month period to assist businesses with cash flow as they navigate COVID-19.
“Up & Running is designed to help all those small to medium businesses, all those retailers, that have been forced to shut their doors, find another means of selling online,” said Rob Bigler, General Manager of eBay Canada. “This is really something for all those small retailers that are out there looking for a way to get online quickly. We have a passion for small and medium businesses. It’s part of our purpose. It’s part of what we do.
“This is a program to help those businesses out, designed to quickly get them through the flow. If you go to the website, there’s steps to help them register as a business, which is different than a C to C, but then there’s also a whole bunch of financial give backs where we’re saying look let’s just help them get up running online. Not charge them store fees for three months. Not charge them final value fees up until June 20. Give them free shipping supplies, a coupon for free shipping supplies. Whatever we can do to help small Canadian businesses out in these challenging times.
IMAGE: EBAY
“The majority of eBay Canada sellers are small businesses from across the country. They embody what it means to stay local and sell global. Up & Running reflects our sense of responsibility and a commitment to retailers whose physical stores are temporarily closed and who lack an international e-commerce channel. We are putting every resource into making it simple and cost-effective for them to quickly set up on eBay and resume selling.”
62 percent of businesses would not be able to quickly shift more than 10 per cent of sales to online or telephone options;
42 percent are worried about having to close their business permanently;
32 percent of those who have had to close are unsure if they will be able to reopen;
25 percent say they can survive less than a month under current conditions;
22 percent have no sales or revenues, and a third have seen declines of 51 per cent to 99 per cent of their gross revenues; and
The average cost of COVID-19 on small businesses so far is $206,000.
According to eBay, while 61 percent of Canadians bought online last year, as recently as 2017, almost half of all Canadian small and medium-sized businesses did not have a website, or had minimal e-commerce capabilities.
On an annual basis, eBay does about $1 billion in transactions in Canada.
Bigler said it’s make or break for many of the small retailers right now to have an online presence.
“They’ve got so much to deal with between family situations and keeping their stores running, keeping their employees employed when they can. But buyers are still buying things. Buyers are online looking for stuff 100 percent. They can’t go into the stores. They’re looking for things online. The shipping companies are still delivering,” said Bigler.
IMAGE: EBAY
“People can still get goods online and if we can help small businesses get online we can help them stay afloat. They’re not going to be making a million bucks but they can at least help weather the storm so that they can get their store open again and hopefully once they do get their stores open again they come out stronger because now they have gotten online.”
For many of those small businesses, the importance of cash flow right now is critical for them to pay some of their fixed costs in operating their ventures.
The ecommerce platform has also undertaken some initiatives to help existing businesses on eBay.
“We’re deferring fees for a month. We’re also giving them free insertions where they can get 50,000 extra insertions a month until the end of July,” said Bigler.
“The other thing the Up & Running program is great for is if you’re a retailer with a store and you have your own website this Up & Running program is great for you to reach an international audience . . . eBay gives you a global platform where you can stay in Calgary (for example) but you can sell to 190 countries and 183 million active buyers.”
With the distressing COVID-19 events of the past few months, both the short and long term financial prospects of smaller neighbourhood shopping centre owners are looking increasingly less positive.
The fact is tenants are — or soon will be — leaving in droves.
It’s time therefore for a creative re-think.
In Canadian cities, smaller shopping centres are generally located on the fringes of established neighbourhoods and are mostly designed to service only those neighbourhoods.
The problem is the lands on which they sit will not ordinarily be redeveloped if the three main operating criteria of the typical neighbourhood shopping centre owner are maintained. These criteria are:
Do not sell
Do not take partners
All onsite development must be revenue producing
But even given these criteria the standard shopping centre leasing model could still be used to incorporate multi-family rental housing into the project.
Abstract defocused motion blurred young people walking in the shopping center.
Here’s how the model would work for an existing, typically underutilized neighbourhood shopping centre:
The existing single structure is replaced with a new building comprising ground floor retail and several floors of rental apartments and possibly underground parking for the rental apartments.
Where long-term leases are in place, the re-development would be phased and the existing retail tenants could continue to operate. Alternatively, they could be bought out and the landowner (the shopping centre owner) would take vacant possession.
The landowner retains full ownership of the land and the improvements, including both the new residential units and the ground level retail.
The main difference between the conventional shopping centre model and the model proposed here is that instead of a retail store operator as lessee, a qualified rental residential operator head-leases the residential component and pays a negotiated lease rate. The head-lessee in turn sublets the individual apartment units to individual tenants and handles all of the associated management.
The shopping centre owner deals only with the head-lessee and never with the individual rental apartment tenants.
In the case of most older shopping centres, an owner will find that its per square foot revenue from new rental housing is at least equal to its revenues from existing single or two-storey combination retail and professional office space. Likely, considerably more.
The shopping centre owner will also find that it can use the increased foot traffic (from the apartment renters) to drive up both demand for retail space and the lease rate it is able to charge retail tenants.
In many cases the building permit process for the proposed model will be far simpler than for a residential condominium project. Condominium development involves a transfer in ownership of the land. This in turn can require subdivision approval, which is a (political) decision of Council. Political decisions are typically fraught with uncertainty.
For most projects, certainly those in the Greater Toronto Area, a relatively straightforward development permit application (with site plan and minor variances) will suffice. These are administrative matters not requiring a (political) decision of Council.
Colin Hefferon
Colin Hefferon is a planning and development consultant. He is a former Ontario Municipal Board (now LPAT) Member. He can be reached at chefferon88@gmail.com.
The Canadian retail sector, like many others, has been tremendously affected by the COVID-19 pandemic. With many physical stores forced to close or adopt new ways of operating, retailers must remain adaptable. Here are six tips to boost resiliency during these challenging circumstances:
1. Give People New Ways to Get Their Goods
Many brands operating in Canada, including Preston Hardware and Home Depot, fall into the non-essential services category, meaning they cannot serve in-store guests.
However, they’ve adapted to drive retail sales in COVID-19 times. Curbside pickup and delivery are two perks some retailers offer. Some that formerly charged for delivery provide it for free to make their goods more accessible to those who want to buy them.
When assessing which services to offer, retailers should put safety at the forefront. For example, they should train delivery drivers on how to do their jobs while maintaining social distancing guidelines. They could also implement a system where a customer allows a store worker to sign for the receipt of goods on their behalf to prevent exchanging paperwork or electronic gadgets.
close up hand of young customer male paying with credit transaction by cradit card terminal in modern shop
2. Consider Offering Different Payment Options — But Don’t Stop Accepting Cash
Research indicates the COVID-19 virus can survive on some surfaces for days, causing health officials to recommend limiting physical touch. Many retailers have started urging people to pay with contactless options, such as through mobile apps.
It’s okay for retailers to explore how to reduce physical contact during the exchange of money. However, they should remain mindful that choosing to stop accepting cash causes hardships for people who don’t have other options.
The Bank of Canada recently released a statement on the matter. It featured a quote from Dr. Isaac Bogoch, an infectious disease doctor and scientist. He clarified, “We can find ways to ensure that all Canadians have access to essential goods and services, even if they are using cash. Risk can be mitigated in retail settings using a variety of methods, including ensuring access to hand hygiene for all employees.”
If cashiers wear gloves at their stations — plus have alcohol-based hand cleaner — those things can keep workers safer between the moments they wash their hands during breaks. Moreover, frequent cleaning of high-touch surfaces such as credit card readers and self-checkout screens protects customers when they choose to pay with methods other than cash.
3. Keep Customers Well-Informed About Any Operational Changes
Due to the substantial changes and restrictions affecting everyday life, some customers may assume the Canadian retail branches they usually visit have shut down. It’s imperative for businesses that are still operating to be transparent with the public and inform them about the scope of services offered.
For example, the Canadian Tire department store did that by creating a dedicated hub on its website for all COVID-19 information. It has a FAQ section, as well as regular updates from the brand’s CEO. The information covered ranges from new operating hours to the company’s recently launched pickup service. It also clarifies what happens at each location to safeguard employee health — plus the procedures they enact after a worker tests positive for the coronavirus.
Retail sales in the COVID-19 landscape are different by necessity, and customers appreciate knowing what’s new. They want assurances that retailers have taken all the appropriate precautions and are operating thoughtfully during these unprecedented times.
4. Offer an Instant Messaging Service to Streamline Communications
Clear and up-to-date communications are now more important than ever. Dedicated products exist to facilitate communication with team members via instant messaging as the coronavirus crisis unfolds. Additionally, customer-facing instant message platforms give brands a quick way to reach out to shoppers.
The pandemic means many people are re-evaluating their shopping behaviours. A survey published in mid-March by Angus Reid/Dalhousie University found 71% of Canadians were generally concerned about the coronavirus outbreak. The research also showed that, for 65% of people, the concern extended to grocery store risks. However, the poll indicated only 3% had shopped online, while 5% asked someone else to buy goods for them.
However, those numbers have likely risen in the several weeks since the survey’s publication. That’s especially likely because guidance from Canada’s leaders tells residents to stay home as much as possible. Older people are at a heightened risk for coronavirus complications, and many may need extra help while shopping online. An instant message service lets retailers reach out to any individual that has questions or worries about buying goods digitally.
When people get the assistance they need right away, the likelihood that they might get frustrated and not go through with their purchases goes down. An instant message service also enables shoppers to ask questions that could influence their purchasing decisions, such as inquiries about shipping speeds, available shipping, and stock levels.
5. Hire Professionals to Advise How to Keep Stores Safe
Since COVID-19 is a new coronavirus, it has pushed retailers into wholly new territory as they determine how to maintain safe environments for workers and shoppers. Many stores now have markings on the floors to show people where to stand as they wait in lines. Others have installed thick, clear shields between cashiers and customers.
There’s arguably a better chance of retail sales in COVID-19-affected areas remaining high if brands get trustworthy guidance about what changes to make. Walmart Canada took that approach by tasking Michael Gill to redesign more than 400 Walmart stores in Canada. Gill focuses on front-end tweaks that prevent the virus from spreading to customers and staff.
Self-checkout attendants touch screens with a stylus instead of their fingers, while guests follow bright arrows on the floor made with tape from the hardware department. Moreover, the chain temporarily ceased selling bulk food items and put tarps over the large bins that usually hold such goods.
Now is not the time for Canadian retail brands to make haphazard guesses about safety. Once customers see companies taking the coronavirus pandemic seriously, they’ll be eager to continue giving those organizations their business.
These are tough times for everyone, and many retailers are figuring out how to stay afloat despite the uncertainty. It’s crucial to show customers they’re supporting the community in whichever ways possible.
For example, Ardene is a Canadian fashion brand that donated 30,000 pairs of shoes to medical workers by the end of March and planned to give many more. Those employees need to change their shoes and socks several times a day to avoid contamination, a representative of the brand said. The company is also giving clothes to women’s shelters around the country and donating $1 from every online purchase to a youth well-being charity.
COVID-19 forced Ardene to close its physical stores temporarily. Even so, the company is making a difference and remaining relevant in these trying times. Such actions show consumers that a brand is well worth supporting.
Practical Tips for Canadian Retail and Beyond
Although all the examples here were from Canadian brands, retailers around the world can apply them to keep retail sales steady. Proactive responses make businesses better able to recover and prosper.
Kayla Matthews
Kayla Matthews is a researcher, writer and blogger covering topics related to technology, smart gadgets, the future of work and personal productivity. She is the owner and editor of ProductivityTheory.com and ProductivityBytes.com. Previously, Kayla was a senior writer at MakeUseOf and contributing freelancer to Digital Trends. Kayla’s work on smart homes and consumer tech has also been featured on Houzz, Dwell, Inman and Curbed. Additionally, her work has appeared on Quartz, PRNewswire, The Week, The Next Web, Lifehacker, Mashable, The Daily Dot, WIRED and others.
When the COVID-19 (coronavirus) pandemic eases down the road, many people are wondering what brands are most likely to survive this extremely challenging economic environment.
“I think it is a time for reflection and a time to look ahead and a time to act versus react,” said John Torella, an advisor with the J.C. Williams Group, a retail and marketing consulting firm based in Toronto. “One of the things to look at, particularly if you are a small to medium sized retailer, is how are you different, how are you unique, how are you special? Because if you’re not, you’re a commodity. You’re interchangeable and you won’t make it through this.”
“What I’m saying to clients is do a little self-reflection. Know thy self. Be very objective and subjective in terms of your real strengths. We put them through a little exercise. What is it? Is it your merchandise that’s unique? Is it the store look? Is it your service attitude? Is it the whole experience? Because once you get that starting point then you can start to build on it, differentiate it and bring it to life and give it some colour, narrative, and storytelling – all those kinds of things.”
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Torella said that based on his experience one third of the people he talks to are facing the realities, see the new realities, and are being very objective realizing it is a time for change and they’ve got to act. Another third is sitting on the fence and don’t know where to go, they’re confused without the resources or skills to respond. Another third will never change and they’re doomed. It’s unfortunate but it’s reality.
“It really depends on your mindset and that’s the hard part. The monkey brain is attacking us all the time with all the negatives and can’t do’s and what about this. And then your self has to take over and say ‘wait a minute, I’m bigger than this. I’m going to work my way through this, I’m going to build the relationships. I’m going to think short-term because I have to pay the rent next week but I’m also going to think longer term.’ Those are the ones I’m hoping will have the substance and the perseverance and the persistence,” said Torella.
He said there will be pent-up demand coming when the crisis settles down. There will be desires for experiences, getting out, socializing, and social shopping which is an important part of retail.
JOHN TORELLA
“That’s all going to come back and you’ve got to be ready for it. It may necessitate change. The change may be more in focusing maybe on the total experience of your store that it’s not just the product, it’s not just the service. It’s the whole experience. And is there an emotional connection in that experience,” said Torella.
“You know, we shop rationally but we buy emotionally. More and more retail has got to understand this need to satisfy both of those demands. We have needs but we also have wants and they’re important.”
Torella said the people benefitting from this and making the adjustments are companies like Walmart which is hiring 10,000 additional people across Canada.
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“Some people are definitely benefitting and taking advantage but they are also looking at many tactics that I think everybody should be thinking about. So whether that’s store hour adjustments or staff adjustments or free shipping or being very hyper local, very concentrated in your neighbourhood, click and collect, gift cards, all of those kinds of things should be in the toolkit,” added Torella.
Torella has been in the industry for many years and he’s never seen anything like this current situation that has hit the retail market.
“Way beyond anything I could imagine. I mean 9-11 was hard. The recession was hard. But this goes beyond that.”
