that over 25% of their sales took place online. Purolator (2016) warned that “firms that avoid online selling risk falling behind” in favour of other sellers that embrace e-commerce and changing consumer behaviour (1).

The third implication of these findings is related to the risk of falling behind. Canada

Post (2016) estimates that e-commerce sales in Canada will continue to grow by double digits annually. In 2019 retail e-commerce sales in Canada are expected to increase to $49.67 million CAD up 13% from 2018 (Canada Post, 2016). Similarly, in 2020 retail e-commerce sales in Canada are expected to increase by 12.3% to $55.78 million CAD (Canada Post, 2016). This increases in retail e-commerce sales will be primarily driven by a channel shift which describes a shift in purchase preferences among consumers (Canada Post, 2016).

This channel shift will see consumers begin to purchase products online they once purchased offline leading to a shift in sales between offline to online channels. Given this shift in consumer purchase preferences the future looks bright for e-commerce merchants in Canada. However the same cannot be said for SMEs in the retail and wholesale sectors that fail to adopt e-commerce capabilities. These SMEs may be at risk of being displaced as consumer preferences shift to digital channels. 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 eMa