Every local business owner shares one ultimate goal—to succeed.
Yet thousands of businesses exit the marketplace every year in Canada.
According to the latest Canadian Government’s Key Small Business Statistics, 68.1% of goods-producing businesses survive their first five years. That survival rate drops to only 48.3% at the ten-year mark.
2020 has made the economic environment even more challenging for retailers and producers with the escalating repercussions of the coronavirus (COVID-19) pandemic.
If there’s one thing that 2020 has taught us, it’s the importance of taking your business online.
But going digital solves more than just surviving unexpected emergencies, it helps local businesses succeed.
Location: The Biggest Challenge For Local Businesses
You might luck out in finding an affordable high-traffic area to run your business in your community.
You might even be smart enough to offer a product line that is needed but locally scarce.
And you most certainly developed a local business marketing strategy that—on paper—will win you a local following of customers.
But local businesses still struggle and still fail, even with perfectly executed business plans.
Because the further away your customers are from your location, the less likely they are to make the trip into your store.
The impact of retail proximity on consumer purchases
Access Development conducted one of the most extensive studies on consumer purchases in North America.
They found that almost 90% of consumers only travel within a 15-minute radius to make their everyday purchases.
That radius drops with the frequency of purchase as well as they type of product they are purchasing. Usually, it is a combination of product availability at closer locations and brand preference.
For example, the average distances consumers are willing to travel vary by product time. Here is an example of common goods that are purchased locally and how far a consumer is willing to travel to purchase them.
|Average Travel Distance
|Home & Garden
|Clothing & Shoes
Why does this happen?
Researchers in this study found that this has to do with the Pareto Principle or the “80/20 Rule.”
Applied to a wide range of consumer behaviour, the 80/20 rule (also informally referred to as “the law of the vital few”) shows that roughly 80% of disposable income is spent within 20 miles of home.
In other words, consumers are less willing to travel far to make everyday purchases.
As the 2020 pandemic has demonstrated, this consumer shopping radius narrows even further during a crisis—where local businesses lose sales to e-commerce vendors and BOPIS (buy online, pick up in-store) retailers.
In June of 2020, e-commerce sales grew by 76%, according to Adobe Analytics, and BOPIS rose 23.3% over June.
Forward-thinking local businesses who still want to be operating in 2025 need to develop digital strategies to succeed—or face dwindling consumer interest and shuttered doors.
Case Study - The Water Store: A Digital Success Story
Founded by “Gary the Water Guy” Gary Beutler, The Water eStore helps families treat water concerns such as taste, smell, and discolouration and staining caused by many municipal and rural water systems.
Located in Midland, part of Ontario’s cottage country, The Water Store is found in a commercial area of town, close to a Comfort Inn, a Ford dealership, and a small residential area.
The population of Midland is around 17,000 residents and is about a 40-minute drive from the nearest city, Barrie Ontario, with a population of 137,000.
In Midland, The Water Store has one major competitor. Both stores share a similar target demographic and offer both competitive and complementary product lines.
Being a local business helped The Water Store develop strong relationships with customers, but placed a natural cap on their ability to grow nationally.
In 2018, they launched TheWatereStore.ca, growing their local target market from 17,000 consumers to over 37 million.
They can now sell and ship their products from coast to coast, while offering free shipping and outstanding customer service.
The Water eStore has also developed strong local business digital marketing campaigns, launched branded hashtags like #GaryTheWaterGuy and #WaterEstore, and have a successful YouTube channel with an impressive number of subscribers.
Going digital has helped The Water Store grow substantially from its local roots, boosting sales and gaining new customers daily, making it a true Canadian digital success story.
The Water Store recently turned to Marketplace Solutions to help them further expand their digital market.
The Benefits of Going Digital For Local Businesses
1. Get more customers.
The top reason why local businesses choose to go digital is to expand their market and gain more customers.
As we discovered in the Water Store case study, businesses can grow their markets in a big way by developing an e-commerce strategy.
Digital solutions quickly allow businesses to counteract the retail proximity problem, tremendously growing their businesses.
Consider your store’s location. How many customers are within a 20-minute radius of you?
Now consider how many more customers you can reach with e-commerce.
The 2020 Canadian E-Commerce Report estimates that retail e-commerce sales will grow to over $108 billion by 2023, with eight out of ten Canadians shopping online already in 2020.
Local business digital marketing is your way to gain your market share of that e-commerce revenue, assuring new customers and revenue growth in the years to come.
2. Compete with large businesses—and win.
The beautiful thing about going digital is that it doesn’t demand you have a huge budget to get noticed.
“The great thing about digital marketing is that ingenuity and creativity can always win over big marketing budgets,” notes Ann Smarty, one of the biggest names in digital marketing, shared in an interview with Digital Marketer.
Gone are the days when you need a million dollar budget to get your business online. With powerful e-commerce platforms such as Shopify, businesses can launch their own website (if they are savvy enough to manage the Shopify interface) or higher a Shopify design & development agency to do it for them.
Once your website is live, it is entirely possible to bootstrap your digital marketing programs to drive significant growth with minimal investment.
There is no more fabulous example of this than e-commerce pioneer and success story, Dollar Shave Club.
They shot this low-budget viral video in 7 hours for under $5,000 during the launch phase of their startup:
This video received nearly 27 million views and helped them launch one of the most successful digital businesses to date, permanently converting customers away from big brand competitors like Gillette.
3. Open to the public 24/7.
Even your local customers are busy. You may not want to attract customers from across the country or around the world, but opening a digital version of your storefront can even increase your purchases from local customers.
More than ever, Canadians have fewer hours of leisure time to spend driving, shopping, and standing in line.
What are Canadians doing in their free time?
An Ipsos-Reid poll found that Canadians spend an average of nearly 90% of their free time on their screens.
With a digital marketing strategy, your business can capture consumer interest anytime, anywhere.
A comprehensive study of e-commerce consumer shopping trends found that Sundays are one of the busiest days for digital shoppers, with online shopping prime-time starting at 8:00 pm.
By going digital, your business can offer your products, convert customers, and make sales all while you are at home with your family enjoying your own free time.
Can My Small Business Go Digital?
If you have a shippable product, then you can go digital. If you offer in-store or curb-side pickup, then you can go digital. If you offer a downloadable product, then you can go digital.
Services like Amazon FBA (Fulfillment by Amazon) allow small businesses to access Amazon Prime Membership and offer one- and two-day shipping, along with product storage at one of their fulfillment centres across Canada.
Payment options such as Apple Pay, Google Pay, PayPal, Visa Debit, and Debit Mastercard allow for flexible and secure payment options outside of traditional credit cards.
There are more support and training targeted at small business owners to help them make a move to digital than ever before.
Local business digital marketing for success
Now is one of the best times in history to take your local business online—make 2020 your goal to take the plunge and go digital.
By breaking the barriers of local-only services, your company can grow to get you in front of more customers, more often and anywhere in Canada and beyond.