Canadians are among the most active eCommerce consumers, with statistics indicating 76-80% of us shop online. Excluding travel, eMarketer estimates $38.74 billion will be spent online by Canadian consumers in 2017 and sales are expected to reach 43.95 billion in 2018. Of those sales, Internet Retailer estimates $17.97 billion will be spent at Canadian online stores in 2017 and 20.38 billion will be spent at Canadian online stores in 2018. Forrester Research has predicted eCommerce will bring in 10% of retail sales by 2019, with the average consumer spending $1210 online.
Where Are Canadian Consumers Shopping Online?
Left with few choices on this side of the border, 53.6% of 2017 online sales will be outside of Canada. According to 2016 data from Canada Post, 9.2 million Canadians placed at least one order with an American online retailer in the last year. A 2015 report by PayPal suggests 60% of Canadians who shopped online purchased from both Canadian and international merchants, and 33% purchased from Canadian merchants only. Alexa data indicates China’s AliExpress is one of the top 10 most-visited sites in Canada this year. As Canadian eCommerce grows, we have the opportunity to win back a good portion of the sales currently going to the U.S. and beyond.
Canadians prefer domestic shopping if they can find what they’re looking for here. TD Bank reported recently that 65% of shoppers who want to support Canadian small businesses, are seeking the ability to make payments or shop online. A recent UPS/Leger study found 51% of Canadians surveyed would only shop in Canada in 2016. 43% of those respondents said it’s because they prefer to shop Canadian. Almost eight in ten Canadians want to be able to pay for their purchase in Canadian dollars when shopping online.
According to a 2016 PayPal report, Canadians choose domestic retailers because:
- 56% of Canadians want to support local businesses and the local economy
- 51% want to avoid the cost of international shipping, taxes and duty
- 44% cite the Canadian dollar exchange rate
- 32% prefer goods that are made in Canada
Canadians love online seller markets, and those markets provide a back door through which Canadian eTailers can reach consumers in this country. BMO Capital Markets estimates indicate Amazon ($1.9 billion) and eBay ($1.5 billion) generated the most online revenue in Canada in 2014. Any retailer or private seller can list products in these marketplaces.
American Shoppers Are Willing to Shop in Canada
We have an opportunity to corner more of the American market. 72% of Americans say they’re willing to purchase online from Canada (more than any other country), according to a Bronto Ipsos survey, but only 20% have actually done so. As the favourite of American cross-border online shoppers, Canadian merchants have a target market of almost 39 million U.S. adults per week!
What’s stopping these eager Americans from buying from Canada? According to Susan Wall, VP of Marketing at Bronto, barriers include the high cost of shipping, security concerns, and having to wait so long to receive their order.
“Although the Internet has made it easier to shop cross-border, there’s still this huge untapped market for Canadian merchants,” Wall says. “If merchants reduce those barriers, they will be able to capitalize on customer hunger for your unique merchandise.”
The cost of shipping is the biggest problem Canadian retailers face when trying to compete on a global level online. Pressuring the government to call Canada Post on its mandate to provide affordable shipping to Canadians is something merchants should be doing on a regular basis. However, the best way to make shipping affordable is to offset the cost with savings in other areas.
For example, virtual, remote teams are saving a fortune for businesses of all sizes in this country. Practically all jobs related to eCommerce can be performed remotely and your recruiting ground covers the entire country. Case in point: I manage all aspects of online business, marketing and content for clients across Canada, the US and the UK, all from my home office. Those who hire me don’t have to use their office space or equipment, plus I work as a contractor so they don’t have to worry about benefits or even income tax deductions. Additionally, when you have the entire country to recruit from, you don’t have to desperately seek rare local experts who will often cost more. Nor do you have to hire full-time workers for each job because your virtual contracts can grow with you.
Security is an easy one to overcome. You can use certification companies, provide SSL shopping, and host your website on Canadian servers. Be sure to mention the extra security that Canadian servers provide, such as protection against surveillance allowed in other countries (including the US).
Canadian Consumers are a Hot Target Market
Canada’s enthusiastic online shoppers have not escaped the notice of the international top 1000 online retailers. 36% of them are currently shipping to Canadian customers and we’re their third favourite target market. Yet there are only 11 Canadian eTailers included in the top 1000 ranking. Those 11 Canadian online retailers collectively brought in $2.3 billion (USD) in online sales in 2016, which is just 0.3% of the top 1000 total sales. Conversely, the 362 top online retailers who ship to Canada hauled in 52% of the top 1000 total sales.
The good news is Canadian eCommerce is growing at a faster rate than most countries. The Top 500 Guide ranked the largest eTailers according to their total online sales, which included 14 Canadian companies.
The largest e-retailers based in Canada (ranked by total online sales in North America)
- Hudson’s Bay Co. Brampton, ON
- Lululemon Athletica Vancouver, BC
- Coastal Contacts Vancouver, BC
- Shoes.com Vancouver, BC (No longer operating)
- The Shopping Channel Mississauga, ON
- BuildDirect Technologies Vancouver, BC
- Beyond the Rack Montreal, QC
- Cymax Stores Inc. Burnaby, BC
- Indigo Books & Music Inc. Toronto, ON
- MEC Vancouver, BC
- Softchoice Corp. Toronto, ON
- Reitman’s Montreal, QC
- Indochino Vancouver, BC
- Aldo Group Montreal, QC
The above Canadian companies grew their total sales by 25.2% in 2016, according to Internet Retailer, almost double that of the other merchants in the top 500 in North America. The most significant growth (35%) has been enjoyed by virtual retailers that have no offline store (web, phone or catalogue orders).
It has never been easier for Canadian businesses to enter the world of eCommerce. Find Canadian-friendly website hosting and a Canadian-friendly eCommerce platform that’s easy to use and you’re on your way. You can also sell directly from social media platforms now. PayPal’s 2016 report suggests 26% of Canadians are currently buying directly from social media advertising and 54% are considering it.
The ultimate shopping experience should be consistent across all channels, blending email promotion, mobile, in-store and online, but you don’t have to do it all at once. Build slowly and strategically if you must, but get started now before you’re left in the dust of those who are fully embracing all that the Internet has to offer.
What barriers have you found when trying to implement an eCommerce strategy? Please share your questions or suggestions in the comments below.
✔ You may also be interested in reading:
How to Tap Into the Exploding Canadian eCommerce Market
Hot Canadian eCommerce Market Captivates Merchants Globally
Test eCommerce Waters with Fulfillment by Amazon (FBA)
Canadians Online: Statistics to Guide Your Multi-Channel Strategy
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Melody McKinnon's formal education is in business management, which she enhanced with more than 60 certifications revolving around business, marketing, health, general sciences and writing. In over 20 years of working online, she has owned or managed both educational and eCommerce websites.
Melody has worked with many businesses & brands in a multitude of capacities. She can often be found on CanadiansInternet.com, CanadianFamily.net and AllNaturalPetCare.com, as well as other quality digital publications. Her content has earned reference links from highly-respected websites, magazines and university textbooks.