By Antonio Clarke | Scribe
Let’s go back three years, the world was how a lot of us would want it to be, going about our lives as normal, right? Jump forward a year to 2020, the lifestyle we knew is being slowly taken from us due to restrictions, closures, and even simple things like walking into certain establishments without a mask, which seems worlds away. Truthfully, the mask served as one of the major turning points for me, because I never thought it would be something that I’d worry about as part of my everyday attire, unless I chose a career in the medical field.
I used to work at the Toronto Premium Outlets, just a mere 10-minute drive from my house as I live in Halton Hills, Ont. If you know that location, then you know that everything is spread out, and if you don’t have some method of transportation, you might be in for some problems getting to and from certain areas in this place dominated by farmland. However, where the outlet mall is located, it connects Brampton, Mississauga, and Milton. Hence, it gets quite busy during summer or when it’s an annual consumer holiday. I vividly remember the struggle of trying to find an empty parking spot or having to deal with the traffic on the way there.
With the popularity of the mall, as well as the stores within it, there wasn’t much of a drop-off from pre-pandemic times.
Unfortunately, not all the malls affected by the pandemic were so lucky. Shoppers World, one of the most well-known malls in Brampton that’s stood for over three decades and counting, lost its shine when I took a walk through it. The once populated food courts were now replaced with tables, spaced out with a lack of lineups at the various eateries, and the huge hallways that were once populated were now empty.
Additionally, a majority of the stores in the mall are family-based businesses or small businesses that are fighting against big retailers. Some of those small businesses have taken a hit, even having signs with “closing sale! everything must go!” hanging on the front of the store and in the windows.
The mall looked like it was going into its final days.
With the physical experience being taken away, people were longing to have it back as that was something many looked forward to. As doors began to close, other doors began to open. The doors flung open for the online marketplace.
David Soberman, a professor in strategic marketing at Rotman, said barely anyone was prepared for something like this, especially businesses.
“How do you prepare for something that happens once a century?” he said. Due to most businesses being unprepared, several of them ended up going under, he added.
According to statistics from Backlinko, there’s a total of 4.48 billion total users on social media, more than double the total users from 2015, which was around 2.07 billion. Keeping that in mind, when it comes to the online shopping numbers, statistics from ReviewLution, a Canadian tech and products review site, showed that up to 80 per cent of Canadians did online shopping in 2020, and due to the boost from the lockdowns, online spending could reach up to almost 110 billion at the pace it’s progressing at.
Towards the tail end of 2021, however, we were hit with yet another obstacle that we needed to overcome which was rising inflation. How this contributed to business is because organizations rely on shipping for certain goods – like silk for clothes. Inflation would lead to shipments being held up, which would slow down businesses.
“When we look at inflation, certain items are a lot more volatile in terms of their prices than the rest,” says Laurence Booth, a professor in business at Rotman. Some small business owners could be looking at losing more than their profit with that in mind.
Could online shopping become the new norm?
People will of course do whatever they can when it comes to wanting to experience a sense of normalcy as it puts them in the position where they feel as if they can forget about the pandemic, just for a moment. All the more reason backing the longevity of the physical experience of shopping.
It’s understandable that since society went indoors and more people started using social media, the online marketplace got a boost, but people still want to be on their feet, moving through busy hallways and ducking into stores with the newest items.
Another question that lingers out there is how much did businesses, big or small, benefit from the online marketplace? Well, using Amazon as an example, according to statistics from digital commerce 360, even though the market share for Amazon slowed slightly in 2020, it took a major jump in 2021 as it made close to $400 billion, allowing it to account for 43.5 per cent of the U.S. e-commerce. We already knew how much of a superpower Amazon was, but those numbers are ridiculous.
Although to be fair, Amazon was already dominating the online marketplace, seeing as they have yet to implement a physical store that you could just walk right into.
Another dominant brand that’s been fighting for that top spot is Adidas. In 2020, the sportswear giant grew 35 per cent, increasing to 55 per cent in March, then moving up to triple digits towards the beginning of April.
The catch here, however, is that Adidas was able to keep their customers satisfied and entertained, despite them not being able to attend physical stores. The article from FN shows that the majority of the increase in Adidas profits came from their “Runtastic” app, that allows users to be engaged while they’re at home. It takes on the form of a fitness app that you can use to track your workout progress with certain footwear from the brand. Their #HomeTeam campaign launch also helped push sales. The company is expected to pass their projected revenue of $4.3 billion at the rate things were going.
“There is one important factor that exists today, and that is technology,” says Baron. Even his colleague Soberman adds that pandemic aside, online has already become the main driving force of business today as the brick and mortar are already being phased out.
Hearing these numbers reminded me of one major thing that sets online shopping apart from in person is the fact that online doesn’t close, it’s open 24/7. A major reason Adidas was able to post the numbers they did was because of the online marketplace staying open, unlike the stores that had to close because of restrictions.
Although online sales got a boost, the negatives of the pandemic when it comes to how in-person business was affected, go much further than just lineups, masks, and capacity limits.
Numbers from a Statistic Canada survey called “The Canadian Survey on Business Conditions,” conducted in September and October of 2020 found that almost two-thirds of businesses had laid off half or more of their workforce since the beginning of the pandemic. Along with that, around one-third didn’t know how much longer they could operate before more staff cuts would ensue.
The pandemic came with a lot of good for online selling and shopping, but at what cost is it to the physical locations? Cuts and closures are already making waves, but that remains to be seen.