VANCOUVER — When COVID-19 started to spread and physical stores shuttered, customers turned to online retailers in droves, accelerating e-commerce demand and sparking a shift in shopping habits. Companies scrambled to meet customers online, beefing up their e-commerce capabilities.
But the rush that peaked in the thick of the pandemic has since slowed. Still, online retail sales remain above pre-pandemic levels, and e-commerce is expected to continue growing and be a mainstay of retailers’ strategies.
Here’s a look at some of the key players shaping e-commerce and the future of retail in Canada.
The marketplace maven
Emily Hosie, Rebelstork
During the pandemic, direct-to-consumer retail sales took off—with companies like Vancouver-based superfood-blends maker Blume and Toronto-based leakproof apparel firm Knix striking deals amid surging consumer demand.
One quickly growing standout in the space is Rebelstork, which CEO Hosie founded in 2019. The company is at the centre of the Venn diagram of skyrocketing interest in the second-hand market and investor appetite for artificial intelligence.
Hosie, a former staffer at Holt Renfrew, Saks Fifth Avenue and TJX, created a marketplace for parents to buy and sell used baby gear after a frustrating experience trying to resell her family’s baby swing.
Her idea came just as thrifting was growing in popularity, and customers were looking for more secure ways to buy secondhand goods than through social media sites. Businesses also noticed the trend and have started creating in-house programs for customers to resell their brand’s products. Last year, Hosie launched a re-commerce initiative at Rebelstork, partnering with baby brands to facilitate the reselling of their branded gear on her platform. It now has more than 270 brand partners.
Since January 2022, Rebelstork has also been using AI technology called REV that determines the prices that sellers can ask for their items. The tool compares products against a database of more than 10,000 models and tracks demand.
Hosie raised a $5-million seed round, led by Haywood Securities, in June 2021 to help with Rebelstork’s expansion plans. The company had already raised $2 million prior to that, and closed an investment for an undisclosed amount from Golden Ventures last year, according to PitchBook. Since the seed round, Rebelstork has decided not to announce fundraising publicly, Hosie said in an email, adding that the company is not currently seeking more funding and that its current cash reserves are mostly being used to hire more staff and expand operations.
Rebelstork expanded to its first international market, the U.S., in April 2022 and more than 120,000 buyers and sellers use its marketplace. The company does not have any further international expansion plans on the horizon, saying it is focused on North America for now, and will be launching new technology to enhance its marketplace in the future.
The future workforce builders
Geordie Rose and Suzanne Gildert, Sanctuary AI
With declining birth rates and a shortage of workers with only a high-school education, some believe there’s a looming possibility that there won’t be enough people to fill jobs. CEO Rose co-founded Sanctuary AI with Gildert, chief technology officer, and others in 2018 to build a robot and solve possibly “the world’s biggest problem”: that birth rates are heading toward a level below population replacement. He expects Phoenix, a humanoid robot the company unveiled in May, to be a solution. The robot, which stands five feet and seven inches tall, has already worked in a Mark’s clothing store in Langley, B.C., for one week.
As the company seeks to enhance Phoenix’s physical and intellectual abilities, it expects the robot to be able to carry out tasks currently done by human workers in more than a dozen industries, such as health care and defence. It has raised more than $100 million, including a $30-million injection from the federal government’s Strategic Innovation Fund, to further its work.
But Rose acknowledged that if robots become capable enough, they could take some jobs away from people. “The bigger question,” he said, “is whether in the long arc of history that is a good or bad thing.” Humans shouldn’t be doing some “unpleasant” and “soul-destroying” work they do now—and this technology could solve that, Rose said.
The investor
Qasim Mohammad, Wittington Ventures
Mohammad’s investments through Wittington Ventures, a Loblaw-affiliated venture capital firm where he serves as director, help shape how many Canadians shop for groceries, medicine and other household goods at Canada’s largest grocery and pharmacy chain.
“It’s been great to see how Wittington has become the best platform, by way of our strategic connections [with Loblaw, holding company George Weston and the Weston family empire] to invest in really iconic brands and underlying platform companies that help power the next generation of commerce,” Mohammad told The Logic. Its portfolio includes Silicon Valley-based autonomous truck startup Gatik, which powers a delivery fleet for Loblaw, and Truvian, a San Diego-based firm working on a device to run multiple blood tests from a small sample.
Mohammed said Wittington “stands in its own little corner for this industry” as few other venture firms focus on e-commerce nor are they immersed in today’s retail challenges. With its Loblaw connection, Wittington has deeper knowledge of the problems merchants face in a constantly evolving online environment.
Mohammad, who creates a biennial study of Canadian digital commerce, is interested in what he calls unfair distribution advantages, such as brands with “really high asymmetrical upside potential” because of a celebrity connection allowing them to break through marketing noise in a budget-friendly manner. He said there’s room for improvement on in-store experiences, pointing to his firm’s investment in Foxtrot, a U.S. operator of upscale convenience stores and a delivery service.
While Mohammad sees hype surrounding artificial intelligence, he also believes retailers can explore how to reduce costs with it. “I do think a lot of it is going to be commoditized, the underlying technology,” he said. “So, I don’t necessarily think there’s a lot of great venture investments to be made there—unless there are startups that can really lean into unfair data advantages or data moats.”
The big-box store strategizer
Manas Vijh, Walmart Canada
As senior director of e-commerce strategic initiatives, Vijh leads e-commerce strategy for Walmart Canada, as the global retail giant positions itself to compete against Amazon.
He started his career in India in bricks-and-mortar retail, but quickly moved into e-commerce. “Over the last seven years, I’ve worked in every aspect of the digital space,” he said, including five years for Amazon. He helped develop the Seattle-based e-commerce giant’s private-label brands and later worked to grow its last-mile delivery network.
He joined Walmart Canada at the start of last year and directly reports to the retailer’s chief e-commerce officer Laurent Duray. “I ensure e-commerce has a seat at the table and that the digital customer’s voice is integrated into all aspects of planning,” Vijh said.
Walmart Canada has been making big investments in its e-commerce strategy, starting with a $3.5-billion, five-year plan announced about three years ago. It includes creating smarter stores filled with electronic shelf labels, robotics and other technologies.
Last month, the retailer opened a large high-tech fulfilment centre near Calgary, equipped with robotics for storing, picking and sorting items. With the new warehouse, Walmart claims it can now deliver goods within two days to 97 per cent of Canadian households. It also launched a $89 annual subscription called Delivery Pass, which offers unlimited next-day orders and discounts on faster timeframes, starting in Ottawa and expected to roll out countrywide this summer. Delivery is a fast-growing segment for Walmart, and it’s able to leverage its stores—such as through a dedicated picking centre within a store—to improve its offerings, Vijh said.
“You’re going to see continued testing and learning from our team, and scaling initiatives as they see success,” he said.
The logistics providers
Peter Lu and Kevin Wang, UniUni
As customers turned to online shopping in droves during the pandemic, the direct-to-consumer retailers’ growth in sales also boosted the parcel delivery firms they worked with. The duo that co-founded UniUni realized traditional carriers didn’t meet online upstarts’ needs and built their business model—one that relies on crowdsourcing and mapping technology—to better serve e-commerce firms.
They co-founded UniUni as a food and package delivery platform in B.C.’s Lower Mainland in 2019, but quickly shifted to parcel delivery instead when Chinese fast-fashion retailer Shein approached the firm looking for a delivery partner. Within a year, it was delivering 1,000 packages daily.
Since then, UniUni has also started to provide last-mile delivery services for Temu, another Chinese ultra-low-cost retailer, and dozens of other companies. It is now available in nine provinces and more than 250 cities in the U.S., where it launched earlier this year
The company built its technology in-house, using artificial intelligence algorithms to optimize driver routes, and operates on a low-cost model with on-call drivers using their own vehicles. It is working on expanding its U.S. presence and targeting a global expansion with Australia and England as its next potential markets.
Investors have provided $40 million to date in equity to fund UniUni’s growth, and the company expects to raise a total $300 million before turning to the public markets in late 2025 or early 2026. The fundraising is “very promising” so far, despite a market downturn, and Wang said that comes down to UniUni proving out its model already in Canada. Now, it’s a “copy-and-paste” exercise elsewhere.
The academic
Shreyas Sekar, Rotman School of Management and the University of Toronto Scarborough
As assistant professor of operations at the Rotman School of Management and the University of Toronto Scarborough, Sekar’s research helps shape how e-commerce platforms, buyers and sellers interact with one another.
Sekar landed in Toronto by way of Harvard Business School, where he was a postdoctoral fellow. At Harvard, he worked on a project with Wayfair, trying to help the online homeware retailer sort its products in search results. That experience gave the academic, who studied algorithms and pricing models during his PhD in computer science, a “deeper window into e-commerce,” and sparked his interest in two-sided marketplaces and the tensions between buyers, sellers and the platform.
His research is now focused on three problems: how to use machine learning and AI to match buyers and sellers; how to determine the best pricing lever, such as a subscription, for any given platform; and how people manipulate the platforms they join. For example, a pet sitter and client who met on Rover might leave the platform once they’re matched up to avoid additional fees. “This is something that keeps platforms up at night,” said Sekar, who recently co-wrote a paper on the trend of “disintermediation,” where buyers and sellers meet offline.
The real-world application of his research, Sekar said, can be a win-win for the companies he studies and consumers. Platforms may realize they need to charge lower fees to keep more people using their services, he said, and provide more of a value proposition than just matching buyers with sellers. Airbnb, for example, provides insurance for hosts, offering protection against property damage. “I think some of what drives my research is what is new and exciting and enabled by e-commerce.”
The enforcer
Anthony Durocher, Competition Bureau
With food prices soaring and Canada’s big three grocers in the hot seat defending themselves against allegations of profiting off of inflation, the Competition Bureau launched a study on the grocery sector’s practices last year. The bureau published its findings in July in what could have far-reaching consequences for the country’s major players, new startups and hopeful entrants.
Durocher heads the Competition Promotion Branch, which conducted the grocery study—making him a key player in shaping the future of how grocery retailers compete online. One of the bureau’s recommendations is that governments work together to create a grocery innovation strategy that would “encourage the emergence of new types of grocery businesses that are willing to take risks to shake things up.” That could be through financial support, such as funding for entrepreneurs to launch online businesses, said Durocher in an email.
In the report, the bureau also made several commitments for itself to boost competition in the sector, including approaching its work in the grocery industry “with heightened vigilance and scrutiny,” providing a pro-competitive lens to Canada’s upcoming grocery code of conduct and revisiting the study in three years.
Durocher said the bureau “will continue to make our enforcement work in this industry a priority,” referencing its reviews of mergers. It has also engaged with stakeholders on the code and will provide input as requested.
“We hope to see Canada’s grocery industry become more competitive in the coming years,” said Durocher, but the bureau will examine its findings again in three years to see if more action is required.
