Is online shopping really taking over? – Ian Hanomansing From this warehouse in the Vancouver suburb of Richmond one of BC’s biggest retailers sends products not just to its stores across the West but to online customers across the country. Despite its name, London Drugs is kind of a department store and so these boxes contain everything from vacuum cleaners to electronics to well… Here’s a classic case in this one.
You’ve got pasta and dog feed. Cosmetics would be an area where you’re vulnerable to online sales competitors. Yeah, no Ian, in you’re right. The president of London Drugs says its online sales have been growing by a big percentage for years. In the double digits. But Clint Mahlman points out that’s a big percentage of a relatively small number. Like most Canadian retailers the vast majority of purchases even small easy to ship products like cosmetics are done in person.
We continue to see customers enjoy the in-store experience for a whole host of different reasons and one of the most important reasons is to find context for their purchases. They want that to feel that cream they want to see that TVs color they want to hear that stereo sound and they really do appreciate the authentic advice from staff. Despite all the enthusiasm about online shopping statistics Canada says it makes up just under six percent of retail sales in the country so while it has increased by about fifty percent in just the last two years we still make the overwhelming majority of our purchases in-store.
Does that surprise you? Actually, it doesn’t. I mean I think to a lot of people that might be surprising but we have to recognize that people still love coming to the store. They love retail they love visiting their favorite brand and shopping in an environment like this. [Ian] Why are you here? Why are you at stores as opposed to just sitting at home with the mouse and the computer? I live down the street so that’s why I’m here. But I also like coming here because there’s more selection. There’s more variety.
Clothes I always do it like in-store because I need to try something on so it really depends on what I’m buying. Some furniture I prefer to do it online. [Ian] Furniture online? Yeah, some, furniture like I recently bought a coffee table and like a TV stand, I bought that online. But even if the online market remains a small percentage of retailers tell us online contact is essential. Arc’teryx, a high-end clothing maker based in BC is opening more stores across Canada but it’s also expanding its digital reach.
I think it’s not as black and white as that you know and people really want to have it all. And be able to research and be online and be inspired through social and Instagram storytelling and the narrative that’s there. But then also to be able to come in and touch and feel and connect in person with the brand and that’s why we have an investment in all those areas.
At London Drugs they’re seeing a surge in demand for online orders of same-day delivery. Raising questions says the company president about how sustainable it is to send more packages to more homes more quickly. I think the future of retailing will be really driven by the cost of shipping and the amount of waste that currently exists within the shipping each’s around in a very expensive way as an e-commerce player that’s a huge cost to both the customer and to the retailer and I think that will have some limiting growth on how far e-commerce can grow in the future.