July/August 2020 – Facing the Music

With a mission to inform, empower, celebrate and advocate for British Columbia's current and aspiring business leaders, BCBusiness go behind the headlines and bring readers face to face with the key issues and people driving business in B.C.

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APRIL 2020 JULY/AUGUST 2020 BCBUSINESS 43 ing to storefronts. Vancouver's West Fourth Avenue has recently seen the arrival of pre- viously online-only bedmaker Casper and eyeglass provider Warby Parker, notes Jane McFadden, executive director of the local business improvement association. On South Granville, exercise-bike company Peloton now occupies a store that was once a high-fashion outlet. This is the moment for retailers to jump at experiments in reaching and serving customers, if they haven't yet. "You've got a massive amount of permission to try new things," says Read, noting that people are trying out brands and methods of shopping that had been off their radar before. "It's OK to screw up; just be transparent about what you're trying to do." Oh, and this, too. Buyers have also got- ten hyper-sensitive to which companies are doing the right thing, by their employees and the community. They don't like the jerks. They have a lot of love to give to the good ones. A KICK IN THE ASS Vancouver companies big and small scram- bled to remake themselves during the pan- demic. Aritzia was a leader in adapting to the new retail reality. The 97-store chain went full-on e-commerce. Sales staff "switched to engaging in a highly personalized way with their clients digitally, communicating via text, phone and email to provide styling ser- vices for clients shopping," CEO Brian Hill said in a May e-mail exchange. Even more important for its image, the company kept on all 3,000 employees, started two com- munity support programs and adopted an International Labor Organization COVID- 19 policy to ensure that suppliers got paid for finished work. Hill is now saying that although he expects revenue to shrink 45 percent year-over-year in the first quarter, the company's plan to add new stores is still on track. At Walrus on Cambie Street, Caroline Boquist, who runs the shop with a business partner and a few part-time staff, added all her products to the website and set up a system for delivery and curbside pickup. But, she admits, she's tired of being told to pivot all the time, given the roller coaster she's been on. Her landlord let her defer rent until July, but then it was due in full. Boquist isn't eligible for the federal com- mercial rent relief program because her sales were only down 65 to 68 percent. The cutoff is 70. Until the threshold changed, she didn't qualify for a $40,000 commer- cial loan from Ottawa because her payroll wasn't big enough. For now, Boquist is forging ahead. "I don't know what else to do," she says. That comes after years of struggling with the particular difficulties of doing business in Vancouver, where development has mostly been pushed onto commercial streets, resulting in huge jumps in land values and therefore property taxes. The goods that Boquist sells only account for about half of her costs. The rest is rent, taxes, utilities, advertising, salaries or dividends. Van- couver's soaring property taxes—like most commercial tenants, she's responsible for paying them—have wreaked more and more havoc with the other half of the budget. That kind of pressure may kill not just weak businesses but good ones, says Gray at Dig360. He and others are increasingly vocal about their fear that if different levels of government don't address some of the systemic problems—the existing hurdles of rent, taxes and bureaucracy, combined with a new patchwork system of pandemic government aid that has eliminated some from applying, along with a bunch of new rules about how to operate—they won't be part of any great restart. "They're being asked to be the front of a recovery, but they feel like no one has their back," Gray says. Then again, business operators in Van- couver and throughout the province are an agile bunch. "If there's a class of retailer nimble enough to deal with this change, it tends to be the independent retailer," Gray says. "They're not burdened the way big chains are." And B.C., with its slightly more entrepreneurial mindset that is a result of not having large corporations and head offices sucking up the talent pool, has more independents proportionally than Ontario or Quebec. Independents like Blaine McNamee, who have been willing to gamble on suc- cess in spite of a lot of challenges—and are still in there fighting. When the pandemic hit and his stores had to close, except by appointment, he knew he had to do some- thing different. "It gave us a kick in the ass to get everything going," McNamee says in May. His music store already had a side gig of selling instruments through a third- party website, but now he had to crank that SOURCES: STATISTICS CANADA, CANADA POST 95% FACEBOOK 65% INSTAGRAM 14% TWITTER 11% PINTEREST 3% SNAPCHAT 2% OTHER of online shoppers have visited a retailer website or app after receiving a social media ad 46% 55% 86% 37% of Canadians who bought goods and services online in 2018 ordered from businesses specifically because they were Canadian of those buying physical goods online went with Canadian merchants of Canadian e-merchants use so-called social selling—direct in- teraction with po- tential shoppers by sharing content and products on social media. Their channels of choice:

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