Your favourite shop doesn’t have a website? Toronto really wants to help

TheGlobeAndMail.com
Shane Dingman
March 11, 2016

It wasn’t so many years ago that Laura-Jean Bernhardson, who opened the first Fresh Collective fashion store in 2003, was using books filled with photocopies of receipts to manage inventory. Her marketing consisted of printing cut-and-paste brochures, using prints from a film camera, at Kinko’s. Just this year, she finally got rid of the last paper elements of her business.

“I’m actually getting rid of a pile of the empty binders right now that ended up in my basement,” says Ms. Bernhardson, who now has three Fresh Collective locations in Toronto. “Pretty much everything we did in the business that is now in Google Docs, our POS [point-of-sale system], Quickbooks and more was all done on paper. Just hilariously primitive.”

The new technology Ms. Bernhardson applied to her business lets her track everything from the social-media effectiveness of ad campaigns to in-store customers. She has also integrated the digital point-of-sale system with the database inventory. “It just became clear that either we were going to be dinosaurs or move forward. In the past, lots of times money was being thrown at things and we were hoping. Now, we can see what’s performing.”

Ms. Bernhardson is an example of what 21st-century retail can look like for small business. Now, the City of Toronto’s economic development agency is working on a new sort of digital boot camp to get more shops and restaurants to follow her lead.

The program is called Digital Main Street, and is being developed with about $250,000 in private funding from Google and YP.ca (the Yellow Pages), among others. It aims to pair up some of the latest retail and business technologies with members of the city’s 81 business improvement areas. Those BIAs represent more than 35,000 of the city’s 90,000 small and medium businesses. (That latter number does include quite a few industrial or manufacturing businesses.)

Entrepreneurs can register now, for free, on the early version of the site at digitalmainstreet.ca. Currently, Google is offering access to its business-listing services as part of the sign-up, but the full list of vendors has not yet been assembled. The big push for sign-ups, for both businesses and vendors, is to begin in April and run through the summer. Digital Main Street is also intended to be an open platform, so not only is membership in a Toronto BIA not a requirement, but neither is having a business in Toronto.

“It’s not just Toronto’s main streets that have the same challenges,” says Chris Rickett, who is a manager of entrepreneurship services with the city’s economic development and culture division. “All of our partners are national, or international, in scope – YellowPages, Google, MasterCard and Shopify. They have an interest that’s much bigger than Toronto.”

Somewhat amazingly for 2016, most of the city’s entrepreneurs don’t even have their own Web presence, according to Mr. Rickett. “Only 41 per cent of small businesses have websites. We’d like to see how we can get that number to 80 per cent in Toronto’s BIAs.”

But beyond that basic digital threshold lies a whole array of new technologies that retailers can use to track customer behaviour online and in-store, and make it easier to set up an online store. These sophisticated retail strategies are typically limited to large retailers, but the team behind Digital Main Street hopes that it can help even small single-store businesses compete on a level playing field.

“With all the challenges around retail,” Mr. Rickett says, “we really started thinking: If our main streets aren’t adopting technology and looking at new ways to engage customers, what’s going to happen to those main streets and the neighbourhoods around them?”

John Kiru, executive director of the Toronto Association of Business Improvement Areas (TABIA), says the genesis of the program came from conversations between himself and Mr. Rickett about the changing character of Toronto’s main streets. For years, his members have complained that service businesses such as dental offices have been moving into once-valuable street-level storefronts as rents have gone up and retail has shifted online. “You see somebody’s hands are in someone’s mouth in the window. That in itself doesn’t make for a welcoming traditional stroll down Main Street.”

These troubles are more than anecdotal, though: A 2014 report from analysts at Forrester Research predicted that online shopping in Canada will grow 12 per cent a year to reach $39-billion in revenue in 2019, compared with sluggish 2.6-per-cent a year growth in overall retail. Forrester’s wrote that a report from Hudson’s Bay showed that customers who shop online and in-store spend “three to four times as much as a single-channel shopper.”

Mr. Rickett also hopes that the city will become a laboratory for retail technology that can both expand local brick-and-mortar businesses and fuel innovative startups. One example he points to is the West Queen West BIA (an association that covers a two-kilometre stretch of Queen Street between Gladstone Avenue and Bathurst Street), which hosts a relatively early adopting group of businesses and is also a hot neighbourhood for startups.

“I’m a big believer that small business has to start acting like a big business to survive,” says Rob Sysak, executive director of the WQW BIA. He has been with the association for six years, and is fond of walking his “beat” to stay in touch with the neighbourhood. One of the initiatives he pushed for was a free trial with the WiFi and customer-tracking technology of Turnstyle Solutions. In fact, the company’s first 10 WiFi locations in 2013 were in West Queen West.

“There was little understanding about proximity marketing. The BIA was really helpful early on,” says Devon Wright, CEO of Turnstyle. “Now, we’re in 25,000 locations across 30 counties.” That includes 600 Subway sandwich shops across Canada, which Mr. Wright says was one of the first major corporate clients the startup signed, thanks in part to the business case data the WQW trials provided.

Turnstyle doesn’t offer just WiFi hot spots for businesses – it uses the tracking capabilities of the technology to get a measure of foot traffic in and out of stores, and also pushes marketing messages for loyalty programs or deal offers to anyone who connects to the network.

Those aren’t the only applications of the technology: Mr. Sysak, who is a mathematician by training, has also used new data to assess the impact of activities such as street festivals or storefront improvements.

“Take the Queen West Art Crawl: It happens in Trinity Bellwoods Park – does that attract people from the other end of the BIA? We were able to show that it did.”

Ms. Bernhardson was one of the West Queen West entrepreneurs that jumped on the early Turnstyle trial. It came along as she was slowly joining the digital revolution in retail, even though she was initially against any customer tracking.

Because her stores specialize in selling small batches of items from Toronto fashion designers, there can be significant risk involved in allocating scarce rack space. With the new technologies, she can now calculate the payoff for taking a risk on a new designer, down to the dollar. “It’s so boring and meticulous and painstaking and annoying … but if you don’t measure it, you can’t improve it. ”

While Fresh Collective has yet to become an online powerhouse – “it’s a small percentage of sales that we actually do online, but it’s been growing” – Ms. Bernhardson couldn’t imagine doing business today without the help of a digital toolbox.

“I’m shocked that some businesses exist without a website. I look at things like a website and Facebook as basic tools,” she says.

“It would be like operating a store in 1982 and refusing to have a phone so that your customer can call you.”