Will 2015 be Canada's year to own e-commerce?
MRSB Marketing Officer Lucy Gotell on where Canadian online retail stands now, and how it can leap forward in 2015
As we look back on 2014 and bring in a new year of professional and personal goals, it can be a good time to reflect on business trends and 'hot topics' that have the potential to influence how we do things in 2015. What’s a new year if not an opportunity for growth and the shedding of less-than-productive habits? As a marketer who spends a significant portion of time using digital means of communicating and branding, one ongoing story that stood out for me last year was Canada's lagging performance on the eCommerce stage. Not to be a naysayer, but we have some work to do until our digital retail sector is in the same league as the U.S. or parts of Europe. And that patriotic part of my brain tells me there's no reason not to think 2015 will be the year that Canada steps it up and gets it right, to the benefit of both business and consumer.
...the average daily spend of the typical American consumer was a healthy $98 in December, stronger than 2013 numbers. The difference is in how and where U.S. consumers are spending money...
Across the United States last year, the number of shoppers gracing department stores and other retail outlets continued to drop. Does this mean Americans are buying less? Hardly. Polling monster Gallup recently reported that the average daily spend of the typical American consumer was a healthy $98 in December, stronger than 2013 numbers. The difference is in how and where U.S. consumers are spending money, with online retail or eCommerce biting off a bigger piece of the pie each year. Some projections see eCommerce sales growing to over $400 billion in the U.S. by 2018. Where does Canada stand amidst this unprecedented online growth? Sadly, several steps behind. According to recent Forrester Research, in Britain close to 15% of overall retail sale are made online, in the U.S. it's 9%. And in Canada? We stand at at a meagre 6%.
So what'a holding us back? Well, not to get too Freudian, but part of the problem seems to be an deep-seated aversion, or perhaps just a lack of clear incentive, to conducting business online. Approximately 25% of Canadian small businesses don’t yet have any online presence (i.e. a website). And a recent Global News article points out that, far from embracing ‘omni-channel’ shopping, Canadian branches of some major retailers don’t offer online purchasing, even though their U.S. locations do. Unfortunately, this unwillingness to get with the times has meant the loss of would-be customers to U.S. counterparts who are more digitally integrated.
40% of Canadians are already spending money online with foreign retailers because homegrown stores are arriving late to the party.
So what should we do? Well, for starters, those without a web presence need to talk to their local designer or try their hand at Wordpress as soon as they can. As for those with a website but without online buying options, we need to first understand that shoppers won’t simply rebuff eCommerce and choose the local brick-and-mortar store in its absence. To the contrary, they’ll click their way to the fastest, simplest (and often cheapest) option, whether here or south of the border. According to research from Best Buy Canada, 40% of Canadians are already spending money online with foreign retailers because homegrown stores are arriving late to the party - or have no plans to attend at all. Some estimates suggest that Amazon, Walmart and Apple (in the U.S.) take in about half of the $21.6 billion in Canadian eCommerce sales annually. In other words, if we had the same range of choice here as consumers south of the border do, we'd happily spend more on Canadian brands. To borrow from a cliched but well-suited film quote, 'If you build it, they will come!'
Perhaps Amazon.ca provides the best example of how a company can reap huge benefits from diversifying options for consumers and making eCommerce a main (sometimes only) priority. Yeah, they've been doing the online thing for a long time, but they're also making big changes to how they do it here in Canada, and reaping the rewards. While Amazon.ca still offers less product and higher prices than its U.S. site, they just enjoyed their most successful holiday shopping season ever, extending Boxing Day sales as a result. They’re definitely in the big leagues, but that doesn’t mean your average mom n’ pop can’t scale the overarching message down and benefit from doing so.
Despite any negative predictions or past missteps, there is hope on the horizon for Canadian online retail. Canada Post was forecast to deliver 20% more packages related to eCommerce in November and December of last year. Big Canadian brands like Canadian Tire have been testing out online sales strategies in recent months, introducing services like 'click and collect' so shoppers can purchase online and pick up in-store. These advancements show that our retail sector is aware of its shortcomings and is willing to do what it takes to change and grow. Really, isn't that what a proper New Year's resolution is all about?