However, it’s important to note that Canada Post (2016) estimates retail e-commerce sales will represent less than 10% of total retail sales by 2020. Therefore it is understandable why SMEs may not be in a rush to adopt e-commerce capabilities. Yet, the threat of displacement will linger for SMEs as consumer preferences evolves.

Problem II

The biggest threat to Canadian SMEs may be Amazon. The e-commerce giant entered Canada in 2002 with the launch of amazon.ca. Over the past seventeen years it has grown from a bookstore to become the largest e-commerce retailer in Canada. The Bank of Montreal (2016) estimates that amazon.ca and amazon.com earned over $3.5 Billion CAD in e- commerce sales in 2016. That sales figure is approximately twice as larger as the second largest retailer Apple which only grossed $1.6 billion CAD (BMO, 2016). Statistica (2017) estimates that Amazon’s two largest properties amazon.com and amazon.ca represent approximately 11% of all retail e-commerce spending in Canada. In the U.S., Amazon is a not just a dominant e-commerce retailer it is arguably the new face of retail. A 2017 eMarketer report explained that “nearly half (46.7%) of US internet users started product searches on Amazon compared with 34.6% who went to Google first” (More Product Searches, 2017, p 1). Amazon has become the go-to destination for people looking for products and product information rivalling Google.

What may be more impressive is how it found success in the US and Canada. Lisa Wright (2018) explains that Amazon’s “secret sauce” to success is simply its obsession with the customer experience (Wright, 2018, 1). Customer Obsession is one of fourteen leadership principles listed on Amazon’s website. This principle requires leaders to “start with the customer and work backwards” to “earn and keep customer trust” (Amazon, n.d.). Wright (2018) explains that Amazon uses this perspective to create great experiences for their customers (p 4). Making use of insights is key to this approach and so is optimizing their operations for added convenience (Wright, 2018). These customer centric lessons are essential for SMEs seeking to modernize their operations. If not, these SMEs are at risk of being displaced by a larger e-commerce merchant in-tune with consumer needs.

This displacement of SMEs by Amazon is a real threat that should not be tak