Camosun’s Lansdowne campus neighbourhood will never look the same. On January 14, 2018, Sears, one of the Hillside Centre’s anchor tenants, closed its doors for the last time. It marked the end of an era in Canadian retail. Sears closed about 190 stores nationwide and took with it 15,000 jobs.
Demographic changes continue to fuel a shift toward online shopping, leaving Canadian retailers and consumers in a struggle to adjust to changing technologies in order to keep up. We are entering a period of uncertainty the likes of which we have never seen before. And for Camosun students—who work these jobs while attending school or who are looking to either enter retail or start their own businesses after school—the impact is huge.
A CHANGING LANDSCAPE
Camosun Economics, Statistics, and University Transfer Business chair Bijan Ahmadi has been watching the retail market closely for years. He says that the market has changed dramatically, and that it’s a sign of what shoppers are looking for. He says that the shift is clearly visible.
“I had to go to the mall last week,” he says, “so I stopped in, and the traffic group really hasn’t changed in the last 30 years—they’ve just gotten 30 years older. The people going to physical stores were the same people going 30 years ago, and the younger people don’t.”
The internet has changed just about every aspect of our lives, and retail is not immune. Access to information has changed things dramatically, according to Ahmadi.
“You used to be able to go into the store and the attendant at the store knew more about the product than you did,” he says. “Consumers had a lack of information and the staff was trained. Training has gone down, because who’s going to train somebody and then pay them $10 an hour? Meanwhile, consumer information has gone way up. I just need a picture of the UPC code and I know everything about that product; I can get the reviews and everything. If it is something stock standard, I don’t see why anybody wouldn’t buy it off Amazon.”
Ahmadi says he thinks small artisanal shops will always remain. Ahmadi points to the Uptown development, which houses larger and smaller stores, saying they’re developing a community that “isn’t designed to look like retail space but it sells itself as retail space. That’s the future.”
“I think there is room for small business,” says Ahmadi, “but they have to charge a premium, they have to have a niche market, they have to have something different.”
Recently, Ahmadi found himself looking for a filleting knife; he knew what the knives were worth, because he had already been on Amazon. He wanted to see the knives, so he went into a speciality store.
“The guy told me everything about them,” says Ahmadi. “He had five or six different filleting knives. He told me why I would pick one over another. He had the expertise. The one he recommended was carrying about a 20-percent premium. I immediately bought it from him. I was there, he gave me value for service, and that was what I was looking for in a store. If I’m not going to get that, I will shop online.”
Ahmadi says that the retail model we are seeing from online retailers isn’t a new concept: he says Sears had the model long ago. Sears was a catalogue and a distribution center, but Ahmadi says they just didn’t adapt to the online market.
“I would still go to Sears if they had an outlet store,” he says. “You could order in a catalogue and then pick it up at the store. If you didn’t like it, you could just take it back to the store. That kind of model with a physical location satisfies all of the concerns about online shopping, but you can still do it online.”
Another example that comes to mind for Ahmadi is Consumers Distributing. The company operated from 1957 to 1996; in the ’80s, they were a retail giant. At one point, they had 243 stores across Canada.
“It was a magazine that had all kinds of stuff you could order,” says Ahmadi, “and then you would pick it up at the store. The store is really just a warehouse. Why are we paying people to pull stuff off the shelves, display it, show it, talk about it?”
Ahmadi says that another Canadian retail institution, Hudson’s Bay, could fix itself.
“The biggest thing that they have done,” says Ahmadi, “and I’m going back a couple of years, was put itself online. When online shopping came out, one of the challenges was, ‘How do you index a huge store like that, and does anybody want to?’ They didn’t for a long time, but they were one of the first big Canadian retailers that did, and I think that’s what staved them over. Stores like Zellers, that didn’t go online, were the first to go. The old model couldn’t keep up. Traditional retailers had that opportunity, but they failed on it. I don’t see any reason why it’s not Amazon taking over.”
Still, some of the conveniences offered by brick-and-mortar stores simply cannot be equalled by online retailers. Ahmadi cites London Drugs as an example.
“If I buy something at London Drugs,” he says, “I can pick it up off the shelf knowing that if 30 days later I don’t like it, I walk back in and they will take it back. I remember returning Christmas lights a year later when they didn’t work. That kind of policy holds you in, makes you buy stuff comfortably.”
Varying policies about returns online, and the cost and trouble associated with returning a package, is definitely one of the biggest obstacles in getting more people interested in shopping online. These risks and concerns could be alleviated or eliminated by having a physical presence, says Ahmadi.
“If you could go and pick up your purchase, or look at your shoes to make sure they’re the right size before you take them home, that would be revolutionary,” he says. “It would change ecommerce back to commerce.”
“I FELT LIKE I WAS DUPED.”
First-year Camosun Arts and Science student Mary Rubin, who currently works as a fashion model, has a background in working in clothing retail. Because of her behind-the-scenes experience, Rubin has a wealth of knowledge from different angles of the industry; with that comes educated skepticism when it comes to online shopping.
“It’s quite funny to me, because the majority of the time, I’m wearing clothes in fashion shoots that don’t fit,” she says. “They are being clipped on to fit in a specific way. Sometimes you will see a dress in a webstore from four different angles, and every time I shift to a new angle, they have to adjust the clips at the back to make it look like it fits in a certain way when it doesn’t. How can a customer know it will fit differently?”
Rubin has worked for a lot of local brands and has done runway modelling for some larger, more global, brands.
“When you’re on the runway,” says Rubin, “you can’t hide how it fits. They want it to fit the way it’s made to fit, but with photo shoots it’s all smoke and mirrors.”
Rubin doesn’t shop online for a number of reasons, mainly because she fears buying something that’s not going to work out; she says relying on other people’s reviews can be hit or miss.
“What worries me is going through the trouble of finding something and paying for it online, which of course carries a risk of your credit card information being stolen, then waiting however long normal post takes, only to get the item and have it not be what you thought you were buying,” she says. “Maybe it doesn’t fit or look the way you thought it would, or maybe you just made a bad purchase choice. Then you have to go through the trouble of sending it back and then dealing with returns.”
Rubin says she bought something online once and it wasn’t what she wanted.
“The photo showed something completely different,” she says. “I felt like I was duped and I lost all confidence in that brand. They made it very difficult to exchange and get what I wanted and in the end I just opted to get my money back; it took two months. I know that most places aren’t like that anymore; maybe all places aren’t like that. It was such a sour experience that I wouldn’t want to bother with it again.”
Rubin says that she typically browses online before going into the store, and adds that she relies heavily on the relationship built with the workers in a store.
“There is only so much you can do with web development,” says Rubin. “There are things that you just don’t get without face-to-face interactions. If a salesperson tells me this [item] looks bad on me, but this [other item] looks good, I’m way more likely to buy it from them than I am to buy it from a webstore with a review that says, ‘I love this dress.’”
GENERATION GAP
First-year Camosun University Transfer student Linden Jackson, who is studying creative writing, worked in retail for several years prior to enrolling at Camosun. Jackson spent four years working at The Source, which he doesn’t consider a traditional retail store.
“The store is not really there to sell merchandise at this point,” he says, “as merchandise sales are handled almost entirely online.”
Jackson says the stores act as a distribution centre, “a place you can get free shipping to.”
“Their primary goal is to add on warranty services and additional products when people pick something up,” he says, “and bring non-Bell customers to a Bell-owned retail space.”
According to Jackson, the in-store staff would also handle returns, answer questions, and “help old people with their phones,” he says with a chuckle.
“Bottom line—we want [The Source] to be a place that people like going to,” says Jackson, “so they think of it first when they want to buy a phone.”
Jackson says that while most of the sales were done online, customers still came into The Source off of the street. He says he noticed a clear difference in terms of demographics.
“The people we saw the least of were the gen X generation,” says Jackson. “By my estimation, they probably spent more on average, likely because they have more money than millenials. They were open about preferring online shopping. Millennials didn’t spend much but came in a lot, usually to look at stuff more than anything. The baby boomers come in and shop in retail spaces a lot.”
Jackson says that over the time he was at The Source, he saw a dramatic change in consumer confidence in online shopping.
“When I started,” says Jackson, “if someone wanted to buy something that wasn’t in-store, they would almost always buy a gift card and use it for the online purchase. In the last few months I was working there, only a handful of people didn’t have a credit card they were willing to use for an online order.”
ENTREPRENURIAL ADAPTATION
What about Camosun students who are looking to start their own business after college? Trish Tacoma is a good person to give advice on how to deal with the changing landscape of retail; as the owner of the Victoria clothing and accessory store Smoking Lily, Tacoma has learned to adapt to the ever-changing market and continues to prove that all it takes is an idea. Her storefront on Johnson Street downtown was famously small and stands as a unique local retail success story; she has sinced moved to Government Street and also has a Vancouver location, as well as a thriving webstore.
Tacoma used to do store window displays and worked in retail management, and she was the buyer for a clothing store in Toronto; from that experience, she gained a hands-on education and prepared herself for the road ahead.
“It started as a hobby, but it quickly turned into a business,” says Tacoma. “I just took a course on screenprinting. By the third thing that I actually made, I knew that I had a sellable product. Because of my background, I was able to see that. I had to trust my instincts.”
Tacoma says she started small; the Johnson Street location, where the store was for almost 20 years, was 44 square feet. (“We finally outgrew it,” she says.)
“That has been one of my successes,” says Tacoma, “and that is where I see some businesses fail. They have something small that works very well, and everyone is telling them that it’s time to go big, so they move into something huge without the customers to support that.”
Online promotion and sales have always been a big part of Smoking Lily; Tacoma says that the store’s online presence is growing every month.
“To keep that up,” Tacoma says, “we have to do the social media and the newsletters in order to bring the traffic.”
The store has been online for around 15 years, and Tacoma says it has been a learning process along the way. She says it wasn’t easy in the beginning.
“Every time we had a new product, we would take pictures, send the film in to be developed, and wait to get our pictures back before we could go through them and decide which photos to send to our web developer in Calgary,” says Tacoma. “Then she would put it up on our website.”
At the time it cost $10,000 to create an online store; Smoking Lily couldn’t afford that, so customers had to email them with an order and then phone them with their credit card information. It wasn’t until a year and a half ago that Smoking Lily got a Shopify site, an e-commerce platform which allowed them to complete sales directly on the website.
“It took us a long time,” says Tacoma, “but it also took the consumer that long to actually trust online shopping. Now I’m seeing a swing where people are actually more comfortable going online than coming into the shop.”
Today, Smoking Lily’s online store and physical stores live a symbiotic existence. Tacoma says that more people are aware of the store as a result of the online traffic, but she adds that a lot of people still want to touch things before they buy them.
“We’ve got people in Toronto or Montreal following us on Instagram, for example, who look forward to visiting our stores when they visit the west coast,” says Tacoma. “Every year it gets bigger; it gets stronger. People are treating the online store like a physical store now. They want the same customer service, but from the comfort of their couch.”
WHERE RETAIL IS GOING
Retail Advisors Network co-founder Bruce Winder is a retail expert; he refers to what’s happening in retail right now as a “quantum leap change.” The Toronto-based Winder says that there are currently a lot of forces acting on the market and that there is more change going on right now than in the last 20 or 30 years combined.
“Retail is not dead,” says Winder, “nor will it ever be. People will always need to buy things. How we are buying is incredibly different, and it’s changing quickly. Retail used to be done almost entirely in brick-and-mortar stores. It still is for the most part, but online shopping has created seismic waves through the industry. Online shopping has been around for around 20 years in some form, but it is only now hitting the tipping point where it has become important enough to change the way people are doing business.”
Winder says that Sears had a number of issues combine to seal their fate; he says 40 years ago they were a powerhouse, but they “really didn’t reinvest in their business over the last 20 years.”
“The irony is that Sears was one of the first retailers to do what’s called ‘omnichannel,’” says Winder. “You could buy and have it delivered to your home, you could buy from a catalogue, you could buy from the store. They were the first omnichannel retailer, but they lost it because they didn’t reinvest. They also gave up the Craftsman business, which was important for Sears. They gave that up and Canadian Tire and Home Depot launched into that area. They were bought by a hedge fund, which was more interested in taking the company and siphoning dividends, rather than reinventing the business.”
Winder says a lot of Canadian retailers have had their heads in the sand and now have no choice but to adapt.
“Canadian Tire hasn’t had the facilities to be able to ship goods to your home,” says Winder, “so if you buy online from Canadian Tire, you have to pick it up at a store. They are doing an Ottawa test right now where they are doing home delivery, but they are probably about three years late. So you’re starting to see Canadian Tire take this more seriously in terms of home delivery and having more of a digital, ecommerce-focused company. They are behind by several years and they have to catch up.”
Winder says that strong retailers in Canada—for example, Costco and Canadian Tire—have a different business model.
“They’re more of a general merchandise model,” he says, “not a department-store model. That’s where retail has moved. The department-store channel has lost its luster, and Sears went with it.”