The Impact of Online Shopping on Thunder Bay's Local Economy: A Look at Google Trends Data
Updated: Jan 18
Online shopping has become increasingly popular in recent years, and this trend is having a significant impact in the city of Thunder Bay. Studies have shown that e-commerce has seen a significant growth across Canada in the past decade, not just in larger cities such as Toronto. To measure online buying, one tool that is commonly used is Google Trends.
Google Trends provides access to a largely unfiltered sample of actual search requests made to Google. The data is anonymized, meaning that no one is personally identified, and it is also categorized and aggregated. This allows it to display interest in a particular topic from around the globe or down to city-level geography. In this case, we can see searches related to the City of Thunder Bay.
Google Trends search data is known as Big Data, which refers to extremely large data sets that can be analyzed computationally to reveal patterns, trends, and associations, especially relating to human behavior and interactions. As Ford searches highly correlate with Ford sales, this indicates that Google searches are a barometer for consumer purchasing decisions. However, it's important to note that not all online shopping can be captured by Google, as people might use other options such as the Amazon app when shopping online.
Using Google Trends, which is normalized on a per capita basis in Canada, for the past 5 years and the last 12 months, we can see that Thunder Bay has a high interest in online shopping. At one point, Thunder Bay searched for Wayfair the second most in Canada (see Figure 1).
As of the time of writing, Thunder Bay is third in Canada for the last 5 years and the last 12 months. This data clearly shows that online shopping is having an effect on smaller towns like Thunder Bay.
However, it's important to note that the popularity of online shopping can also have negative impacts on the local economy. As more and more people choose to shop online, brick and mortar stores may struggle to compete with the convenience and low prices offered by internet retailers. This can lead to the closure of local businesses and the loss of jobs, as well as a decline in revenue for the city. Additionally, when people shop online, they may choose to buy from overseas retailers, which can result in lost taxes that could be spent locally.
Thunder Bay has shown a high interest in online shopping through searches on Google Trends. In the past 5 years, it ranked as the 26th highest city in Canada for searches of Amazon, which suggests that residents frequently use online platforms like Amazon, RockAuto, Ebay, and Shein for purchasing goods. Google Trends provides a way to quantify the popularity of online buying in the city. However, this trend is concerning as it may have a negative impact on the local economy. The rise in online shopping may be contributing to the economic decline of the city through the loss of revenue for brick and mortar stores and the diversion of dollars away from local businesses. The #ChooseTbayFirst initiative, which promotes shopping locally, is a response to this trend.
Combatting the Impact of Online Shopping on Local Economies: Strategies for Local Businesses and Communities
There are several ways that the city of Thunder Bay and local businesses can combat the negative effects of online shopping on the local economy:
Promote Local Shopping: Encourage residents to shop locally through campaigns such as "Buy Local" or "Shop Small" initiatives. By highlighting the unique products and services offered by local businesses, residents may be more likely to choose them over online options.
Provide Incentives: Offer incentives for residents to shop locally, such as discounts or loyalty programs. This can help to make local businesses more competitive with online retailers.
Support Local Businesses: Encourage residents to support local businesses by providing resources and information on how to shop locally. This can include information on local business directories, events, and promotions.
Embrace Technology: Encourage local businesses to adopt e-commerce and online marketing strategies to better compete with online retailers. This can include creating an online presence, offering online ordering and delivery options, and utilizing social media.
Offer education and training: Provide resources for local businesses to learn about online marketing, e-commerce, and other digital tools to help them to compete with online retailers.
Create strong partnerships: Encourage local businesses to form partnerships with each other to increase their competitiveness and offer a unique shopping experience. This can include cross-promotions, joint events, and shared marketing campaigns.
Invest in infrastructure: Invest in the city's infrastructure such as transportation, internet and logistics to make it easier for residents to shop locally.
Develop Community Programs: Develop community programs that focus on the needs of local businesses, such as small business loans, grants and mentoring programs, to help them grow and survive.
Be aware of environmental impact: Encourage local businesses to consider their environmental impact and make conscious choices when it comes to packaging, shipping and sourcing.
It's important to note that there is no single solution to combat the impact of online shopping on the local economy, and that a combination of these strategies may be needed to have the most impact.
To Wrap Things Up
Overall, some may argue that the rise of online shopping has benefited many businesses, but this isn’t necessarily accurate. Brick-and-mortar stores are closing at an alarming rate because owners can’t compete with prices or convenience that come with internet purchasing. As online shopping continues to increase in popularity, many people have chosen to buy clothes, entertainment, and other necessities online instead of at local stores. This leaves Thunder Bay with less economic growth than it should be receiving, and the city will continue facing severe consequences because of this.