My perspective - Shopping for rural opportunities
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- Published on Friday, March 8, 2019
By Kate Jackman-Atkinson
Neepawa Banner & Press
After dramatically transforming one industry after another, the online revolution has come for the retail sector. The number of Canadians shopping online has been rising, which has led to great handwringing about what this means for the retail sector. You can鈥檛 blame them, we鈥檝e all seen the impact the internet had on buying things like air travel and movie rentals.
Retail e-commerce has been rising and in 2018, it accounted for $18 billion of sales, or 2.9 per cent of total retail sales in Canada. Interestingly, about one quarter of those sales took place in the holiday shopping season. Less than 10 years ago, in 2010, Stats Can figures showed that Canadians placed about 114 million online orders, totalling $15.3 billion. These trends aren鈥檛 expected to turn around; by 2021, Canadian retail e-commerce is expected to rise to $29 billion. In the U.S., online shopping accounts for almost 10 per cent of all retail sales and is forecast to reach 20 per cent by 2025.
While these trends may be concerning to those in chain retail and commercial real estate, could it be a good thing for rural economies? I think it might.
Business owners in most rural communities recognize that they can鈥檛 be all things to all people. At some point, everyone will have to go to Brandon, or Dauphin, or Winnipeg to get some widget that they can鈥檛 buy locally. Once they鈥檙e there, they鈥檒l spend money on things they could have bought at home, since they鈥檙e there anyway. But what if it didn鈥檛 have to be that way?
With online shopping, rural residents can buy almost all the stuff they can鈥檛 get locally and have it delivered to them. They save time and money and haven鈥檛 bought groceries, gas and meals out of town, 鈥淪ince they were there anyway鈥�. For me, online shopping has significantly cut down on the number of out of town trips I have to make. A certain amount of money will flow outside a rural community, that鈥檚 inescapable, but any opportunity to minimize it is a win.
Rural communities also have a lot to gain from the shift to online shopping, because it allows their businesses to reach shoppers far beyond their physical trading area. Especially true for unique or niche businesses, being able to sell to those beyond your community can make a business not only viable, but successful. When you鈥檙e selling online, being in a small rural community isn鈥檛 a disadvantage鈥� as long as your customers can reach you virtually, it doesn鈥檛 matter where you鈥檙e located. For an ambitious small business owner in a rural community, the rise of online shopping is a huge opportunity and has created a whole segment of businesses that wouldn鈥檛 otherwise be able to exist. E-commerce has meant that entrepreneurs don鈥檛 have to choose between rural life and their business dreams.
As an added spin off, the move to online shopping has the potential to help ease real estate crunches in Canada鈥檚 hottest markets. In-person shopping requires stores to be near people, but online shopping distribution warehouses are typically located in areas not considered to be prime real estate. Many shopping mall owners recognize this and RioCan Real Estate Investment Trust, which was previously the country鈥檚 largest real estate income trust (REIT), is in the process of tearing up some of its malls to redevelop the land into apartments.
If these trends hurt Canada鈥檚 commercial real estate barons, I鈥檓 not overly concerned. For rural communities, I think the upside potential is greater than the downside. I am excited to see what the growth of online shopping will mean for rural residents and entrepreneurs.
