From groceries and clothes to digital books and electronics, the shift from small independent stores to large online-based companies provides consumers with easy access to almost any product they need. Online ordering has grown significantly since the mid-1990s, with the rise of new online corporations such as Amazon.com. This new form of shopping forces many small retailers to switch to online stores, and while a surge in online ordering has diminished some local businesses, it has also allowed stores to reach larger audiences.
An early example of online shopping emerged in 1984 at the Boston Computer Exchange, which bought and sold used computers. However, companies such as Amazon have played a larger part in pioneering online ordering. Starting in 1994, Amazon began as an online bookstore but quickly grew to sell a range of products. Now, there are about 28 million e-commerce sites worldwide.
The growth of online ordering has significantly reduced local foot traffic for small businesses. Stores have had to adapt by creating websites or finding unique locations, among other things. One example of this is Emma’s Shop, located in the Fox + Stone Collective hair salon in Fairfax. Emma’s Shop is a local small business that sells jewellery, women’s clothes, and other vintage items. Emma’s shop gets lots of foot traffic from locals who are just coming in for a haircut, which is important to maintaining her business.
“I share the space with Fox + Stone hair salon, and that has foot traffic built into it. So in order to compete with online ordering, having physical foot traffic is a great pro. It allows me to have customers and people coming through the space even when they’re not intending to shop, which is great,” said shopowner Emma Shelton.
Emma’s shop is a relatively new establishment and has only been around during the time of online ordering. Shelton considered this when making her business model and choosing her location.
Despite this, her online store has helped her to garner more business and is another way local businesses are adapting to compete. Emma’s Shop’s online store helps connect customers who are looking for specific products and has also helped with her outreach to other parts of the country.
“For my business, my online ordering either comes from people who are looking for specific items that I happen to have in stock. So it could be somebody that’s in New York, who is looking for a specific item, and nobody by them has it, and they’re doing a Google search, and I pop up. The other way I get online business is that people will see it online or on our email blasts, and they don’t live locally, and so they’re able to purchase it from a distance,” Shelton said.
While this may work for some, it can be complicated for small businesses to shift to an online-oriented business model. Derek Mitchell is the owner of the Marin Outdoor Trading Company, a small family-owned business in downtown San Anselmo. During COVID, he was forced to move his business online, but he finds it challenging to maintain and benefit from an online store.
“I’m not doing the online shop because to compete in that space, you need to go down a whole different pathway. You’re going to need to hire somebody, or more than one person, to box something up, to take it to the post office, and keep your website up to date. So yeah, you may get some extra sales, but you’re going to be maintaining a whole different business channel,” Mitchell said.
With the holiday season underway, customers are on the lookout for thoughtful gifts for their friends and family. With this comes an increase in online promotions, such as Black Friday sales, from large retail companies. This can take a toll on small businesses, as they are unable to make a profit on their products while also keeping up with the discounts large companies offer online.
Mitchell experiences these effects daily. The harm to local businesses is magnified, especially around the holidays, as large outdoor equipment brands dramatically mark down their products to encourage their holiday shoppers.
“One of the brands I work with has 35 percent off site-wide, which is about as much as I have to pay to buy the product. You need to make a 40/50 margin for your business to stay alive, and I can’t do that when big brands do those things. It is pretty easy for large companies to pop up with 15 percent off today, but if I were to tell my customer as they walk in, ‘hey, just today’s 25 percent off,’ I wouldn’t make enough money to survive. So those are the biggest challenges I face as a small business owner,” Mitchell said.
Small businesses are finding it difficult to compete with the larger online businesses and the convenience they provide consumers. Its conveniences and wider product availability make it a major advantage for consumers. Because of this, Archie Williams junior Hazel Hovey prefers online ordering.
“I prefer ordering online because I think it’s easier, and compared to going in person, you don’t have to interact with people. It’s easier because there’s more size availability, while in person, sometimes they don’t have the exact size. I think online is easy, because you can just do it anywhere, versus going in person, where you have to block out a time period in the day, while online is just one click, and you’re wherever you want to be,” Hazel said.
Online ordering has also created a great advantage for the elderly who can’t go out to purchase items for themselves, including Hazel’s grandparents.
“I think also having groceries available online is a really helpful way for people to get food. For instance, my grandparents aren’t able to drive, and having Amazon Prime be able to deliver Whole Foods is so helpful, and it’s a great resource for a lot of people, and can make life a lot easier. People working nine to five don’t have time to go into the grocery store, so it’s very helpful to have delivery programs set up,” Hazel said.
The rise of online ordering and companies, such as Amazon, has dramatically impacted the way consumers shop. While online companies have provided convenience for buyers, which is crucial, these companies have also reduced foot traffic for our local businesses. As online commerce continues to grow, in-person and online shoppers will play an important role in supporting small businesses.
