Everybody knows that Canadians love their hockey and donuts, but we also clearly love to shop.
According to recent surveys and data tracking, there are record numbers of men and women shopping online in Canada. Recent data released by Canada Post indicates that Canadians are not only shopping online more, but they are also shopping online for a greater variety of items. In addition to clothes and mass market items like books, we are going online to buy things like toys, office supplies, and sporting goods.
Obviously there is a huge appetite for online shopping among Canadians. But, unfortunately for Canadian retailers, we are mostly satisfying our online shopping urges south of the border. A huge majority of online sales in Canada are captured by U.S-based retail giants like Apple, Amazon and Walmart. These American retailers have been developing and refining their online divisions for years, and the premium online services and savings that they’re able to offer young millennials and digital-savvy consumers is generating huge revenues for them.
In contrast, most Canadian retailers have been slow to develop their online channels, preferring to focus on in-store services. The result is that Canadian retailers have fallen way behind in the competition for online market share, with predictably negative results for Canadian consumers and the Canadian retail economy as a whole.
So what can Canadian retailers do to start catching up to their American competitors and up their online game? The most important thing is to recognize a few important realities:
Online shopping is now a core aspect of retail. Gone are the days when an online store was simply one more item in the menu of services offered by a retailer. Online shopping has truly become mass market. Traffic to traditional brick-and-mortar stores is falling steadily as consumers demonstrate a preference for shopping on their own schedules, at online stores that never close, and from the comfort of their own homes. Retailers who ignore this fact, and fail to develop a robust online channel and make it the center of their sales strategy, do so at their own peril.
Online shoppers are bargain driven. There is a widespread perception and expectation among online shoppers that items will be less expensive if purchased online. With the ability to search literally hundreds of different stores in search of the best deals, and fueled by a constant stream of online sales campaigns transmitted instantly via email and social media, shoppers expect online items to be priced at a discount compared to what they would pay when shopping in store. If their expectations are not met, they will simply switch to another shopping site. Thus a retailer’s online portal cannot simply be a carbon copy of the offline store – it has to be competitive in the online world of discount sales and special deals.
Free shipping is a huge factor. In much the same way as price discounts, online shoppers place a heavy emphasis on free shipping, and this will often determine where they choose to shop online. Because more and more online retailers now offer free shipping, consumers are beginning to take it for granted, seeing it as just part of the service they pay for when they buy a product online. Retailers need to take this into account and design their services accordingly, or risk losing business to other online competitors.
To stay competitive, stay relevant, and increase their bottom line, Canadian retailers need to fully embrace online shopping and give Canadian consumers the online service we deserve. Let’s hope we don’t have long to wait.