The Digital Transformation of Retail During the Covid-19 Pandemic: A Comparative Study in Canada, China, And France

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The Digital Transformation of Retail During
the Covid-19 Pandemic: A Comparative Study
         in Canada, China, And France

                                   Messaline Nicolaï and Camille Grange

Abstract
This study invites scholars and practitioners to reflect on the digital transformation of retail
throughout the year 2020. The COVID-19 pandemic has activated two countervailing forces
particularly relevant to the dynamics of the retail sector. On the one hand, months-long
lockdown and stay-at-home measures have boosted e-commerce transactions at the expense of
brick-and-mortar sales. On the other hand, the pandemic has contributed to economic hardship,
and drops in customer confidence and discretionary purchasing. Thus, 2020 has been a year
where retailers have had to juggle between handling extraordinary challenges and embracing
opportunities via digital innovations. Against this backdrop, we set out to better understand the
nature and scale of retail actors’ digital responses to the disruptions generated by the pandemic.
Because these responses are likely to have been contingent on their socio-cultural and
economic setting, we opted for a comparative study of the most salient initiatives in China,
France, and Canada. This approach, which highlights the diversity of responses across
countries, intends to broaden the spectrum of possibilities for decision-makers across the globe
when it comes to leveraging digital technology in the retail sector.

Keywords: Retail, E-Commerce, Digital Transformation, Covid-19, Comparative Study

_______________________
M. Nicolaï
HEC Montreal, Canada
e-mail: messaline.nicolai@hec.ca

C. Grange
HEC Montreal, Canada
e-mail: camille.grange@hec.ca
© The Author(s) 2021
Nicolaï, M. & Grange, C. (2021). The Digital Transformation of Retail during the COVID-19 Pandemic: A Comparative Study
in Canada, China, and France. In E. Mazaheri (Ed.), The Impact of COVID19 On E-Commerce (pp.1-18). Proud Pen.
https://doi.org/10.51432/978-1-8381524-8-2_1
2   The Impact of COVID-19 on E-Commerce

1. Introduction
This paper presents a comparative study of the digital initiatives implemented in China, France,
and Canada to adapt to the COVID-19 pandemic. The geographical framework chosen for the
study is especially relevant to those interested in e-commerce and the digital transformation of
retail (Deloitte 2017, Grewal et al. 2017). The three selected countries are ranked among the
top ten global markets in terms of online sales, which amounted to USD 1.8 trillion for China,
USD 66 billion for France, and USD 43 billion for Canada in 2019 (Cramer-Flood, 2020b).
Furthermore, Canada, China, and France have some similarities that make them comparable.
For example, they are relatively mature from a technological infrastructure standpoint, and
they have faced common challenges during the pandemic (e.g., the collapse in demand and the
breakdown of supply chains). However, their socio-cultural and economic contexts differ
significantly. As a result, the initiatives led by the key economic players in the three countries
have varied, enabling a broad analysis of the digital transformation of retail engendered by the
COVID-19 pandemic.
Comparative research analyzes the contrast among different macro-level units (such as
countries) at a particular point in time (Esser and Vliegenthart 2017), which encourages a
stronger awareness of the practices and challenges that are idiosyncratic to contexts differing
from those one is most exposed and accustomed to. In this study, we leverage a comparative
approach to develop a wide-ranging understanding of how the retail industry has engaged with
digital technologies to implement changes in value creation (e.g., proposing new sales or
interaction channels, revisiting offerings and value propositions) during the COVID-19 crisis.
Our analysis, which relies on secondary data (e.g., industry reports, market analyses, white
papers, magazine and newspaper articles, governments and retailers’ announcements), offers a
concrete basis for retail actors to assess, contrast, and accelerate their digital transformation
efforts (Vial 2019).
In the rest of the paper, we first describe the geographical framework for the comparative study.
Then, we analyze the friction points that have impeded customer-retailer interactions because
of the pandemic. We subsequently discuss the most salient digital innovation initiatives that
retail actors have set up to address these friction points. We conclude by highlighting some key
insights.

2. Pre-Pandemic Digitalization of Retail in China, France, and Canada
In this section, we review the central characteristics and enablers of the diffusion of e-commerce
practices in the three compared markets.

2.1. China: E-Commerce on Steroids
China is by far the world leader in e-commerce. It has generated USD 1.8 trillion in revenues
in 20191, accounting for 34% of the country’s total retail sales (Cramer-Flood, 2020a). The
economic, technological, and regulatory reforms undertaken in the 1980s,1990s, and early
2000s by the Chinese government have been instrumental to a fast development of national
e-commerce. The Great Firewall of China was set up in the late 1990s to regulate the Internet,
blocking access to selected foreign websites and slowing down cross-border Internet traffic. In
the early 2000s, China also started the Golden Shield Project, a massive surveillance and
censoring system (Arsène, 2019). The set of strict government regulations have made it
difficult for foreign companies to gain a foothold in China – a market of 904 million Internet
users in March 2020 (Thomala, 2020a). Google even pulled out of the search engine market in

1
 This includes the sale of products or services ordered using the Internet via any device, regardless of the method of payment
or fulfillment; it excludes travel, event tickets, food services, gambling; it also excludes Hong-Kong.
The Digital Transformation of Retail During the Covid-19 Pandemic: A Comparative Study                    3

2010 and Amazon shut down its marketplace in 2019. Unsurprisingly, China’s e-commerce is
thus controlled by national companies, the most important of which in 2019 were Vip.com
(USD 20.38 billion in revenues), Suning (USD 33.35 billion), Pinduoduo (USD 145.69 billion),
JD.com (USD 294.67 billion), and the ultra-dominant Alibaba (USD 1,004.69 billion), owner
of both Taobao and Tmall (Cramer-Flood, 2020a).
The growth of online marketplaces in China was fueled by a profound transformation of
consumption at the end of the 2000s. During that time, e-commerce quickly became the norm
due to underdeveloped physical retail, a cheap and high-performance national logistics system,
as well as the increased purchasing power of the urban middle class resulting from the
economic reforms initiated in the 1990s (Biggs and al, 2017; Liu, 2019). In 2018, the average
household income in cities was RMB 39,251 (USD 5,873) compared to RMB 1,510 (USD 225)
in 1990 (Textor, 2020). This growth in buying power was further accelerated by increased
access to broadband Internet.
Furthermore, Chinese consumers have quickly adopted the mobile Internet to carry out their
online activities (e.g., messaging, social networking, shopping). This is explained by the more
affordable cost of smartphones compared to computers, and by public investments in the
mobile network infrastructure (Evans, 2017). In December 2019, 99% of Chinese Internet users
used their smartphones to access the Web, compared to 43% and 35% for desktop and laptops
use, respectively (Thomala, 2020b). It is no surprise that mobile applications have flourished,
especially those dedicated to payment. Alibaba and Tencent possess 90% of the market with
their respective Alipay and WeChat Pay / Tenpay applications (Thomala, 2020c). WeChat was
created in 2011 as an instant messaging tool, but it has quickly evolved to offer a number of
other features including payments (Schaeffer, 2017). The success of WeChat was made
possible due to the integration of “mini-programs” allowing e-merchants to take advantage of
the application's social network to increase conversion rates (Cramer-Flood, 2020a). In 2019,
these mini programs generated an income of RMB 800 billion (USD 115 billion) (Kats, 2020).
The quick and easy payment solutions based on the scan of a QR code have undoubtedly
boosted the adoption of mobile payment. In 2019, a staggering 80.3% of all online sales were
conducted via mobile devices (Cramer-Flood, 2020a).
Finally, it is important to note that entertainment is key to the Chinese shopping experience. It
manifests through entertainment activities in shopping centers, but also online through social
commerce or live streaming. This particularity has contributed to the desire to define a Chinese
"New retail", a term coined in 2016 by Jack Ma, co-founder of Alibaba. “New retail” places
the consumer at the center of growth and encourages retailers to fully integrate digital and
physical channels to create an ecosystem offering a unified customer experience (PWC,
2019).

2.2. France: Starting Slow but Catching Up Quick
Online sales in France reached USD 66 billion in 2019, representing 9.2% of total retail
revenues1 and making the country the 6th in the world in terms of e-commerce sales (Cramer-
Flood, 2020b; Von Abrams, 2020). As these figures indicate, e-commerce is now a very solid
practice. However, its diffusion was much slower than in neighboring countries such as the UK
or Germany. In the 1990s, electronic transactions, mostly B2B, were conducted through the
key technology of the time, the Minitel (Isaac, 2017; Brousseau 2003). Contrary to China,
Frances’s main public operator France Telecom did not quite appreciate the economic potential
of the Internet at the time, judging that "its cooperative mode of operation was not designed to
offer commercial services” (Eudes, 2019). The Internet for the general public emerged in 1994
1
 This includes the sale of products or services ordered using the Internet via any device, regardless of the method of payment
or fulfillment; it excludes travel, event tickets, food services, gambling.
4   The Impact of COVID-19 on E-Commerce

when small independent ISPs started offering cheap subscriptions (Eudes, 2019), and the 1990s
thus constituted a period of transition from the Minitel to the Web (BNF, 2016). It was only at
the beginning of the 2000s that Internet adoption accelerated thanks to the availability of
broadband technology and of better computing equipment in French households (Barba, 2011).
In 2002, the home Internet penetration rate reached 23% compared to 4% in 1998. In 2005,
about half of the French population could access the Internet. (Statista, 2020f).
Online consumption also picked up in the 2000s as new merchants entered the market (Barba,
2011). In 2018, the number of online stores in France was 182, 000 compared to 22,600 in
2006 (Statista, 2020d). Google, and its search engine advertising platform, largely benefited
from the intensified competition. In 2019, it held a 90.5% share in the search engine market in
the country (Statista, 2019). Amazon entered the French market in 2000 and quickly became
the leading online seller outside of the food category. Despite Amazon’s lead, French
e-commerce enterprises have built a robust presence. In 2020, 70% of the top 10 merchants
(according to the number of customers) were French. Amazon led with a 53.7% of market
shares, followed by Fnac (27%), Cdiscount (18.2%), Veepee (13.6%) and eLeclerc (11.1%)
(Besnard, 2020).
Another key feature of French e-commerce is the significant stronghold of large-scale retailers
in the online grocery sector, and related, its significant click-and-collect / click-and-drive
infrastructure. In that regard, Carrefour and Intermarché opened 232 and 85 collection points
in 2018, respectively (Batty, 2019), and in 2019, there were more than 5,100 drive sites in the
country, including 3,720 click-and-drive (Nielsen, 2019). The economic weight of French
companies in the online grocery sector has been detrimental to Amazon’s growth rate, which
dropped from 44% to 14% in 2019 in this sector because of harsh competition and the
multiplication of collection points for pedestrians in urban areas (Batty, 2019). Finally,
although the fast-moving consumer goods sector occupies an important place in the French
e-commerce landscape, the fashion segment generated the most online sales in 2019 with a
share of 46.9% (Statista, 2020a). Another ascending consumption trend in the country is mobile
ecommerce: 35.1% of online purchases were made via m-commerce in 2019, a 22.1% growth
compared to the previous year (Von Abrams, 2020).

2.3. Canada: Where are Canadian Online Retailers?
In Canada, online sales reached USD 32 billion in 20191, that is, 6.8% of total retail sales,
making it 9th in the world in terms of e-commerce sales (Briggs, 2020; Cramer-Flood, 2020b).
The expansion of e-commerce in Canada has paralleled the development of the technological
infrastructure. During the 1990s, the Ministry of Industry created the Information Highway
Advisory Council (IHAC) and developed a series of measures to develop the information
highway and give faster access to information to Canadians (OECD, 2002). According to
Statistcs Canada, while only 15% of the Canadian population had access to the Internet at home
in 1996, this grew to 53% in 2002 (mostly in urban areas) and 87% in 2019. In parallel, online
sales increased from CAD 417 million in 1998 to CAD 1.1 billion in 2000 (De Mont &
Caragata, 2013; Statistique Canada 2001), and in 2019, 67% of Canadians were shopping
online (Coppola, 2020).
Although consumer adoption of e-commerce has risen steadily in the last two decades, sales
have mostly benefited American companies. In 1998, an astounding 63% of online sales in
Canada were the results of transactions on US websites (De Mont & Caragata, 2013). The
dominance of American players in the Canadian online landscape remains prominent today:
among the five leading retailers in 2019 in terms of customer acquisition, only one was
1
 This includes the sale of products or services ordered using the Internet via any device, regardless of the method of payment
or fulfillment; it excludes travel, event tickets, food services, gambling.
The Digital Transformation of Retail During the Covid-19 Pandemic: A Comparative Study                       5

Canadian (Canadian Tire 1 ) (Briggs, 2019). The Canadian Internet Registration Authority
(CIRA) reported in 2019 that 64% of Canadians would have liked to buy more from local
online stores. However, the online presence of Canadian retailers online remains weak (only
54% of local businesses had a website in 2017 according to Statistics Canada). As such, a large
portion of online purchases is still being captured by foreign retail sites (Shaw 2017).
The adoption of e-commerce is heterogeneous in Canada. In Quebec, for example, 64% of
Internet users were online buyers in 2018, while the Canadian average was 67% (Benessaieh,
2019). Nonetheless, Internet adoption in the province has progressed over the years to reach a
penetration rate of over 90% in 2019 (Clément, 2020). The difference between the rate of
Internet users and that of online shoppers is justified by a small offer of e-merchants: according
to a CEFRIO 2 study, only 14% of Quebec companies had a transactional site in 2019
(Benessaieh, 2019). Unsurprisingly, the main player in Quebec is Amazon, which captures 17
% of all online purchases in the province (Benessaieh, 2019). Amazon’s logistic infrastructure
is efficient; it enables order delivery in a few hours or even in a day, making it difficult for
local e-merchants to compete.

2.4. Synthesis
In summary, the dynamics of retail digitalization in China, France and Canada are
heterogeneous both in terms of supply (retail offerings) and demand (consumer behavior). E-
commerce has become the norm in Chinese retail. As reported in Table 1, which presents key
statistics of Internet and e-commerce adoption in the three countries, e-commerce in China
represents an impressive 34.1% of total retail sales. This is explained in part by the fact that
physical retail had not reached maturity when the Internet emerged, and by the early and
extremely fast diffusion of mobile devices and mobile shopping stores. In contrast, the share
of e-commerce in total retail sales in France and Canada represents 9.2% and 6.8%
respectively. In those markets, e-commerce emerged as an alternative (and competitor) to
physical retail, which was already mature in both countries. It is particularly striking that
Canadian companies are still lagging behind in the adoption of e-commerce, leaving a large
part of the market to foreign retailers, Amazon in particular. Although the latter also dominates
online sales in France, French retailers keep a solid foothold, especially in the online grocery
business.

Table 1.
Key markers of e-commerce in China, France and Canada before the COVID-19 pandemic (compiled
from eMarketer and Statista data in 2019)
                                                              China             France         Canada
    Internet penetration rate (% of population)                61%               86%             87%
    E-commerce penetration rate                               74.8%             68.5%            67 %
    E-commerce revenues (billions)                           USD 1800           USD 66          USD 32
    % of total retail sales                                   34.1%              9.2%            6.8%
    Mobile internet users (% of population)                   99.1%              65%             79 %
    Mobile buyers’ rate (% of online buyers)                  99.7%             36.6%           46.2 %
    Mobile commerce revenues (billions)                      USD 1447           USD 23         USD 10.5
    Number of social media users (in millions)                 882                36              25
    Number of social commerce buyers (in millions)             713                8.8             6.2

1 The others were Amazon, Ebay, Walmart, and Apple.
2 CEFRIO, the non-profit « Centre facilitant la recherche et l’innovation dans les organisations (CEFRIO) » ceased its activities
in June 2019. Similar to the Pew research centre in the US, it produced data and reports on the state of different economic
sectors and associated consumer behavior dynamics.
6      The Impact of COVID-19 on E-Commerce

3. Retailers’ Digital Initiatives during the COVID-19 Pandemic
In this section, we document customer-retailer friction points as a result of the health crisis,
and we illustrate how they have been addressed by retailers’ digital innovations. This analysis
relies on the customer journey framework, which enables a complete consideration of the
consumption lifecycle.

3.1. COVID-19 Induced Friction Points During Customer-Retailer Interactions
A customer journey is composed of three generic stages: pre-purchase, purchase, and post-
purchase (Lemon and Verhoef, 2016). As we explain next and illustrate in Table 2, all stages
have been disrupted during the pandemic (KPMG 2020).

Table 2.
Synthesis of Key Friction Points Throughout the Customer Journey During the Pandemic
                   Pre-purchase                                Purchase                                Post-purchase
    (need recognition, consideration, search)         (choice, ordering, payment)           (consumption, engagement, service)
    •   Decreased offerings visibility            •   Errors in product availability    •   Delivery issues (notable delays, errors)
    •   Inability to discuss products in person   •   Few payment options               •   Difficulties in returning products
    •   Inability to go shopping at will          •   Unsecured payment process         •   Risk of infection during delivery
    •   Long line-up to get into stores           •   Long line-up to pay               •   Less resources to attend to customers’
    •   Risks of infection while shopping         •   Risks of infection while paying       requests
    •   Product inventory issues

The pre-purchase stage includes customers’ activities prior to the acquisition of a good or
service (Lemon and Verhoef, 2016). This involves becoming aware of one’s needs, seeking
information, and considering and evaluating goods. This can be done through a variety digital
or physical channels, some owned by brands and others controlled by consumers. In short,
customers strive to collect information to decrease the level of uncertainty about a purchase.
Because of the pandemic, it has been more difficult for consumers to research and evaluate
products. Most importantly, the closure of physical stores has considerably decreased offerings
visibility, social distancing has reduced opportunities to discuss and discover products, and the
breakdown of supply chain has generated inventory issues.
The purchase phase is focused on the acquisition of the product or service and encompasses all
interactions between consumers, brands and their environment during the purchase (Lemon,
Verhoef, 2016). At this point, consumers have made a choice, and they need to validate their
order and pay for it. Their objective is to optimize utility while reducing the cost of purchase
(Gao et al, 2019). During the pandemic, payment has been a struggle for many. The main
challenges have involved safety (e.g., contamination risks when buying in-store) and efficiency
(e.g., reduced payment options)
The post-purchase stage pertains to getting possession of the product and to maintaining a
relationship with the seller after the purchase (Lemon, Verhoef, 2016). At this stage, the
products or services constitute the crucial points of contact between consumers and brands.
The delivery experience as well as the consumption experience determine repeated purchases,
and therefore, consumer loyalty (Gao et al, 2019). The pandemic has created serious challenges
in this stage of the customer journey due to supply chain disruptions that have resulted in
shortages as well as delivery delays. These were also caused by an upsurge in demand via e-
commerce channels and a reduced number of delivery staff whom, in certain countries such as
France, could exercise their right of withdrawal1. Under these conditions, maintaining a level
of satisfaction corresponding to customer expectations has constituted a real challenge for
1   https://www.service-public.fr/particuliers/actualites/A13902
The Digital Transformation of Retail During the Covid-19 Pandemic: A Comparative Study   7

retailers, and implementing solutions that ensure a positive experience has been essential to
foster consumer loyalty.
In the next sections, we highlight a number of key digital innovations addressing some of the
friction points that emerged as a result of the pandemic.

3.2. Digital Innovations in Support of the Pre-Purchase Stage
3.2.1. The Boom of Live Streaming E-Commerce in China
In China, the first country to experience coronavirus outbreaks, the authorities implemented
rigorous public health measures. The measures were particularly strict in Wuhan, the epicenter
of the pandemic, where the population was in lockdown, unable to go out shopping, from early
January to the beginning of April. Live streaming has proven to be particularly effective in
promoting offerings. Live streaming does not only consist of broadcasting a video about a
product, it is a live shopping event during which prospects / viewers interact not only with a
seller but also with each other. They discuss reasons for acquiring a certain product, how to use
it, etc. (Kestenbaum, 2020). A real community forms around the products, generally on mobile
platforms such as Taobao, Douyin, Kuaishou or WeChat on which purchases can be made
directly. Customers can also see the number of orders made in real time and prices may
fluctuate depending on the number of buyers (Bourdinière, 2020). Promotional communication
on the platforms is carried out through celebrities or opinion leaders when the brands have the
financial means. Even the mayor of Wuhan, Li Qiang, carried out a Live Streaming during the
lockdown in order to promote the brands of the province of Hubei and reach the millions of
Chinese people confined. About 300,000 items were sold in just a few hours on Douyin, and
the entire campaign generated revenues of RMB 17.9 million (USD 2.5 million) (Ni & Wang,
2020). Live streaming also enabled the first digitization of Shangai’s Fashion Week, during
which Internet users were able to buy designer pieces via Taobao Live. (Qi, 2020). The opening
show generated 4 million views, and the revenues generated from the entire event totaled over
RMB 500 million (USD 70 million) (Qi, 2020).
Taobao, a subsidiary of Alibaba, is the most popular platform in the Live Streaming industry
with 61% of the market share in terms of users as of May 2020 (Ma, 2020a). Following the
confinement, the company launched an aid plan for 200,000 brick and mortars, whose activities
had ceased, in order to allow them to benefit from Alibaba's audience, i.e., 800 million users
per month visit the group's transactional sites (Chou, 2020). Taobao's first initiative in this
direction was to remove all service fees for merchants wishing to join the Live Streaming
platform in February 2020 (Chou, 2020). These merchants were thus able to leverage live
sessions to promote their products, and the number of e-merchants using Taobao Live increased
by 719% compared to January 2020 (Taobao, 2020). The digital giant has also supported
farmers, who were mostly selling to offline intermediaries, by allowing them to promote and
sell their goods directly to end consumers via Live Streaming. Rural live streaming existed
before the health crisis, but it was not very popular. The COVID-19 crisis served as a powerful
catalyst, and Taobao now has 50,000 rural streamers, up from only 1,000 back in 2019 (Hao,
2020). In sum, Live Streaming has not only helped coping with the crisis, but it has established
a new business model likely to continue in the sale of agriculture products (Hao, 2020). Like
Taobao, WeChat and JD.com have also launched aid plans for traders as well as producers.
The Live Streaming industry, which generated RMB 451 billion (USD 66 billion) in 2019,
could very well double in size 2020 (Toh & Wang, 2020).
8   The Impact of COVID-19 on E-Commerce

3.2.2. Marketplaces at the Rescue of Small Sellers in France
France experienced a first episode of confinement from March 2000 to May 2020. Restrictions
were less strict than those in China as businesses selling essential goods were allowed to be
open. However, the closure of retail stores deemed non-essential, together with the risks of
contamination from visiting a physical store, encouraged French people to make their
purchases online, leading to a 60% increase in e-commerce sales during containment
(eMarketer, 2020c). Similar to Chinese retailers, French retailers had to find new ways to make
their offerings more visible and to promote their products to confined consumers. It is, in part,
through marketplaces, firmly established in the e-commerce sector that merchants have been
able to achieve this. Amazon, Cdiscount and Carrefour in particular have supported local
retailers whose visibility had been reduced, providing them with a powerful online showcase
to reach consumers.
Amazon, the leading online distributor in the country, has had a conflicting relationship with
France. It has been repeatedly confronted with justice as well as with government officials’
critics about different business matters such as their dumping practices in the publishing market
or the allegedly unsafe working conditions during the pandemic (Biseau, 2020). During the
COVID-19 crisis, the American giant has provided support to French retailers, in particular
SMEs and VSEs. The first initiative in that regard was about facilitating the setting up of online
stores for the latter so that they can promote their products and gain visibility amongst French
and European consumers (Amazon, 2020b). The company has made available their online mall
called “producers' shops” created in 2018, the objective of which is to encourage the visibility
and commercial activity of producers and cooperatives by enabling them to sell directly to
consumers (Amazon, 2020a). For example, the Lyon-based company Chabiothé, which sells
organic tea on the American marketplace, has seen its sales increase by 30% since the start of
the crisis, like the Breton cooperative SICA which sold in average 100 baskets of vegetables
per day during the first containment, a volume 10 times larger than before (Amazon, 2020a).
Since November 2020, Amazon has been offering 3 months free subscription to new retailers
as well as free advertising to increase their visibility (Bianchi, 2020).
In the same vein, the French marketplace Cdiscount, a key competitor of Amazon, has been
offering preferential conditions and prices to SMEs via increased visibility of customizable
micro sites (to benefit from the 22 million visitors per month on the marketplace), free
registration, or fee reduction (Cdiscount, 2020). During the March to May confinement, the
company, which had 12,000 partners including 5,000 French VSEs / SMEs, saw its sales
increase by more than 60% (Ugolini, 2020). The opportunity to acquire new partner vendors
was also exploited by the Carrefour marketplace, created in June 2020. Access to the
marketplace has been offered for free to sellers during confinement and is now composed of
52% of SME / VSE (Lourdessamy, 2020). The marketplace has specialized in the distribution
of fine, organic, and local groceries, which represent a popular consumption trend in times of
health crisis (Bartnik, 2020).

3.2.3. Traffic Monitoring Technology to Smoothen Store Visits in Canada
Faced with the spread of the pandemic, Canadians also experienced a period of confinement
which extended from March 2020 to May 2020. Businesses whose activities were considered
non-essential were forced to close, triggering a surge in online sales, which more than doubled
during confinement (eMarketer, 2020b). Businesses supplying essential goods, such as grocery
stores or supermarkets, remained open. Yet, emergency public health measures required them
to ensure social distancing by managing traffic and capacity. A portion of Canadians (20.4%)
surveyed in a post-lockdown consumer behavior study conducted in August 2020, reported that
online shopping was a good alternative to avoid the annoyance of having to wait in line when
The Digital Transformation of Retail During the Covid-19 Pandemic: A Comparative Study   9

going to a brick-and-mortar store during the pandemic (Statista, 2020g). However, a large
majority continued to shop in-store. In April 2020, 5% of consumers tried online grocery
shopping while 64% continued to go to the supermarket, preferably buying larger quantities in
order to limit trips (Briggs, 2020).
The impediments of in-store visits have inspired digital innovations in the lineup management
sphere. Canadian start-up company Andie.work leverages data gathered at more than 75,000
stores such as grocery stores, supermarkets, liquor stores, or pharmacies, to provide real-time
updates of waiting times in front of stores (Yuen, 2020). Based on AI technology, the start-up
is able to predict the best time slots to go grocery shopping – which happened to be Tuesday
afternoons between 1:30 p.m. and 3:45 p.m. as well as Wednesday between 12:30 p.m. and
3:30 p.m. (Andie.work, 2020). Other similar lineup management initiatives have emerged in
2020, from open, crowd-sourced platforms (e.g., howsby) to large organizations (e.g., Ivanohe
Cambridge’s proprietary app for use by its mall tenants). Some stores have also integrated their
own technological devices to avoid excessive customer groupings and mitigate wait times as
well as infection risks. For example, as part of its plan to invest CAD 3.5 billion over the next
five years in new technologies to create smarter stores (The Canadian Press, 2020), Walmart
developed a "traffic monitoring" system into its mobile application to help stores manage
customer traffic flows. On the app, users select the desired store and time slot, and in return
they receive a confirmation email to be shown at the store entrance (Walmart, 2020). In some
locations, Walmart customers could also scan QR Codes via their mobile devices to learn about
the company’s security measures in place during the pandemic (Lewis, 2020).

3.3. Digital Innovations in Support of the Purchase Stage
3.3.1. The Progress of Contactless and Lightweight Payment in France and Canada
Crucial technological initiatives in support of customer purchase have consisted in innovations
enabling the need for contactless payments. In France, shopping transactions are carried out
mainly via payment cards or cash (Dubrulle, 2019). Cash transactions fell 60% in the first week
of confinement (Maldonato, 2020). In contrast, contactless payment, considered as a barrier
gesture by the authorities, has become an increasingly popular technology, and this has been
helped by purchase ceilings going up from € 30 to € 50 at most retailers (Blondel, 2020). In
parallel, an increase in mobile transactions was also observed: + 60% during the first week of
confinement. However, this method of payment still has a relatively low penetration rate
(2.2%), and 64% of French people remain uncertain about its use in 2020 (Maldonato, 2020;
Statista, 2020e).
In parallel, creative payment solutions were also implemented in support of new business
models. Lyra, a French fintech company, which states to be “the future of digital payment”,
has offered its services at preferential rates during the pandemic. The retailer Fromage et
Compagnie called on the services of the company to find a payment solution to be integrated
into its new B2C drive / click & collect system (Lyra, 2020). The solution, which involves
sending payment links via email, SMS, Facebook or WhatsApp, has helped the company
mitigate the loss of B2B revenues associated with restaurants being closed during confinement
episodes (Lyra, 2020).
Like France, the Canadian payment system relies heavily on bank solutions. The most highly
used methods of payment at points of sale in 2019 were credit cards (51%), debit cards (26%),
and cash (10%) (De Best, 2020). Unsurprisingly, the barrier gestures and distancing constraints
imposed by the pandemic have influenced the payment behavior of Canadian consumers. The
use of cash declined by 62% between April and July 2020, and in parallel contactless payments
via cards increased by 64%, with an 83% surge in the restaurant sector (Macleaod, 2020;
Interac, 2020). Digital payment solutions have constituted an additional alternative; a record
10   The Impact of COVID-19 on E-Commerce

number of 61.3 million Interac transfer transactions were carried out in April 2020 (Interac,
2020). Although this method was already used by Canadians before the pandemic, its adoption
rate has increased by 43% between March 2019 and March 2020 (Interac, 2020). The adoption
of this type of payment has also grown among SMEs, a third of which confirmed to have used
contactless cards and Interac transfers to record transactions this year (CFIB, 2020). In parallel,
businesses have reported a “digital shift” with cash transactions falling by 38% (CFIB, 2020).
In sum, similar to France, the digital initiatives of Canadian retailers in terms of purchase
support have been highly focused on implementing contactless payment solutions.

3.3.2. Big Tech’s Contactless Payment Solutions in China
Partial bank disintermediation is a unique feature of the payment system in China, which is
dominated by tech giants such as Alibaba (Alipay) and Tencent (WeChat Pay) (Klein, 2020).
Together with the strong adoption of smartphones in the country, this has fostered the
development of a payment system based on digital wallets and QR codes, leading to a usage
rate of 58% in 2019 (JP Morgan, 2020). In other words, digital and contactless payments were
already widely used practices in China long before the pandemic happened. Alipay has been
the most widely used platform in the country with a staggering 95% adoption rate among
mobile shoppers (Statista, 2020c). Since the start of the pandemic, the company has deployed
a series of technological measures aimed at supporting distressed retailers. For example, it
launched the "Small Businesses 2020" program, in which it commits to helping small
businesses use contactless payments and transfer their businesses online (Alizia, 2020). It has
also invested in the digitalization of the service sector by encouraging third-party developers
to create mini programs intended to meet the new needs of consumers during the pandemic (Li,
2020). Nearly 180 mini programs were launched just one week after announcing the initiative.
Thanks to this, Meicai, a Chinese start-up that connects vegetable farmers with restaurants and
consumers, was able to attract 800,000 new users to its platform in just a few days and received
orders from over 80 Chinese cities following the operation (Li, 2020).

3.4. Digital Innovations in Support of the Post-Purchase Stage
3.4.1. Making Express Delivery More Efficient in China
During the lockdown, the closure of stores and restaurants has resulted in increased demand in
the delivery sector, especially for food products. In fact, 24% of Chinese consumers said they
have used more food delivery from restaurants, and 33% said they have done their grocery
shopping online more frequently since the start of the pandemic (Ho et al., 2020). The express
delivery sector has experienced significant development in recent years in China due to the
growth of urbanization, the improvement of the logistics infrastructure, and the expansion of
e-commerce. The sector recorded a 20% increase in revenue in 2019 with sales of RMB 745
billion (USD 107 billion), including RMB 654 billion (USD 99.5 billion) for food-delivery
only (Government of China, 2020; Ma, 2020b). It is by far the largest market in the world,
served by 20,000 companies and 3 million employees (Government of China, 2020), and it is
currently dominated by Meituan-Dianping (renamed Meituam as of September 2020) and
Ele.me, whose shares are 67% and 27%, respectively (Ma, 2020b). Following the onset of the
pandemic, e-commerce companies have set up contactless delivery systems to facilitate
physical distancing (Storey et al. 2021). Among them, Meituan integrated contactless delivery
into its application, allowing users to receive their food parcels or prepared meals in previously
designated spaces such as smart lockers, removing the need to interact with delivery people
(Yu, 2020). This new form of delivery was first tested in Wuhan, and then exported to 184
Chinese cities (Yu, 2020). The company has also deployed a fleet of autonomous vehicles to
reach smart lockers (Chan et al, 2020). Likewise, the increase in demand has prompted other
The Digital Transformation of Retail During the Covid-19 Pandemic: A Comparative Study   11

e-commerce players such as Alibaba or JD.com to engage in driverless delivery (and delivery
trials via drones, Zhaoyi 2020) to reach confined consumers and address the last mile delivery
challenge more efficiently (Lin, 2020).

3.4.2. Furthering Click and Collect in France
In 2019, the revenues generated by the last mile delivery business in France amounted to 100
billion euros with 500 million parcels distributed (Doumbe, 2020). La Poste is the largest
logistics provider in the country with 61% market shares, followed by Chronopost (33%) and
Mondial Relay (25%) (eCommerceDB, 2020). Although the preferred delivery mode of French
customers is home delivery (85% of people use it), relay points and click-and-collect options
are also popular means to get products ordered online; their penetration rates are 68% and 28%,
respectively (Gautier, 2020). Unsurprisingly, the delivery of goods has been highly disrupted
during the pandemic due to relay point closures and the sharp increase in e-commerce sales. It
is estimated that 75% of orders were distributed with an average delay of more than five days
(Bouaziz, 2020a).
Against the backdrop of the pandemic, retailers with an omnichannel infrastructure have been
able to quickly respond to store closure directives and delivery issues by allowing consumers
to pick up their orders at or near points of sale. The French government authorized retailers to
practice click-and-collect for certain categories of products (food, DIY, garden centers,
cultural) (Ministry of the Economy, Finance and Recovery, 2020). That proved successful as
the large French brands offering this delivery method, such as Auchan, Fnac-Darty, and
Carrefour, recorded a 50% growth in sales between March and April 2020 (Von Abrams,
2020). The experience was more challenging for retailers that had not already built click-and-
collect capability before the crisis. Leroy Merlin, for example, had to set up an appointment-
based order pick-up system in the parking lots of its stores (Bouaziz, 2020b). Other retailers
with more limited technical and financial resources have also chosen to implement click &
collect or join platforms possessing the capability. This was the case of the 25th Hour
bookstore, which decided in October 2020 to join a transactional platform bringing together
several Parisian bookstores “Paris Librairies” (Briard, 2020a). The bookstore was thus able to
exploit the platform's logistics services and continue offering products to its consumers. In sum,
click-and-collect solutions have become increasingly popular in France during the pandemic.
This has been the case with very small businesses especially (25% of them used it in 2020)
(Sintes, 2020).

3.4.3. Ramping up Delivery Capabilities for Online Sales in Canada
In 2019, the revenues generated by parcel delivery services amounted to CAD 12.8 billion and
the three main players were FedEx (10% market share), UPS (22.4%) and Canada Post (35.4
%) (Mc Grath, 2020). The latter delivered 320 million parcels in 2019, an 8.3% increase
compared to the previous year, which parallels the steady growth of e-commerce in the country
(Canada Post, 2020a). Online sales have also grown since the start of the pandemic, inevitably
leading to an increase in the volume of deliveries. For example, Canada Post processed 75%
more parcels in June 2020 compared to June 2019 (Canada Post, 2020b). Last mile delivery is
challenging in Canada due, in part, to the size of the country, its low-density areas, and the long
distances to be covered to reach the most remote, less inhabited areas (Deloitte, 2019). Delays
in delivery were reported in large-scale food distribution in particular, where the volume of
online orders increased dramatically, as was the case for the Metro grocery store, which saw
its demand double during confinement (Venne, 2020). To cope with increased demand, Metro
decided to strengthen its logistics system by establishing a partnership with the Cornershop,
which acts as an express delivery intermediary (Metro, 2020). Customers place their orders on
12   The Impact of COVID-19 on E-Commerce

the Cornershop’s website or mobile app, and they are charged a fee that is equivalent to 10%
of their grocery bill (Orfali, 2020). Metro has also developed the Metro Priorité platform for
people aged 70 and over, as well as people with reduced mobility or in quarantine. This service
makes it possible to prioritize orders from the target audience within 48 hours, to pre-assemble
them outside the stores or to deliver them to their homes (Metro, 2020). At the close of the
fourth half of 2020, Metro's online sales recorded a 160% increase in revenues amounting to
CAD 4.14 billion, or + 7.4% compared the previous year (Fournier, 2020).

4. Conclusion
Table 5 provides a summary of retailers’ digital initiatives in the three targeted geographic
areas during the COVID-19 pandemic. Given idiosyncratic differences in the three countries’
retail sectors, both in terms of offerings and consumer behavior, as well as in their
governments’ regulatory responses to the pandemic, the focus of digital innovations has varied
between Canada, China, and France.
What has been particularly noticeable in Canada (and mostly absent in China and France) is
that a great deal of innovation has occurred at the brick-and-mortar level (e.g., queue/traffic
management systems). This suggests that even if the pandemic has encouraged local sellers to
move online and online transactions have surged, Canadians remain keen on shopping in
physical stores.
In China and France, the dominant e-commerce players (giant tech, like Alibaba in the case of
China; Amazon-and Carrefour albeit to a lesser extent-in France) have been at the forefront of
several important initiatives. These have included facilitating SMEs’ emergency online
transition by expanding the access to their digital tools and capabilities (e.g., online stores, live
streaming).
Overall, our comparative analysis indicates that the pandemic has been a formidable accelerator
of existing diffusion trends in the three countries: the popularity of social commerce in China,
the use of Click & Collect in France, and the maturing of e-commerce in Canada. Crises are
often powerful catalysts for innovations. As discussed in this paper, an utterly salient example
of this has been the digital transformation of retail across the globe throughout 2020.

Table 5.
Key digital innovations used across countries and stages of the customer journey during the pandemic
                 China                  France                 Canada
 Pre-purchase    Live Streaming         Marketplaces           Traffic monitoring tech/apps
 Purchase        Mobile payment         Contactless payment    Contactless payment
                 Digital wallet         Digital wallet         E-transfer
                 Biometry               Payment via IM
 Post-purchase   Contactless delivery   Click & Collect        Third party logistics platform
                 Smart locker                                  Click & Collect
                 Autonomous vehicles
                 WeChat groups

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