How E-commerce is Influencing Canadians’ Shopping Habits

04/26/2017
by Elber Gamboa

Statistics have shown a dramatic increase in the number of Canadians shopping online yet there is a lack of presence from Canadian retailers when it comes to e-commerce offerings.

While that has been changing in some interesting ways including in the click and collect or mobile options for consumers, the number of local shopping options for Canadians remains limited.

Yet, since the rise of Amazon and other major online shops, Canadians have been changing their shopping habits. They are not only incorporating online shopping possibilities but their expectations of retailers has also been changing.

THE NUMBERS

Research shows that 84 per cent of Canadians made an online purchase in 2015, and 20 per cent said they did so at least once a month.

An in-depth report on e-commerce in Canada done by Circa, an internet registration company, states that Canadians spent over $136 billion online in 2013. Yet In their report they found that over 40 per cent of Canadian small businesses lacked on online presence.

Interesting enough, those business owners that do not offer e-commerce to their customers have been big users of e-commerce themselves. Circa’s research found that over 90 per cent of small business owners make online purchases, including flights or travel packages (61 per cent), clothing (50 per cent), electronics or show/game tickets (45 per cent) books (39 per cent) and office supplies (34 per cent).

Their research also found that most Canadians like to support local companies, with 62 per cent saying they prefer to buy from Canadian businesses when shopping online.

A study by PayPal that supports Circa’s finds shows that Canadians tend to buy from Canadian retailers online.

PayPal’s research found that three out of four Canadians indicated they were going to buy holiday gifts online from Canadian companies. Their research also showed that 83 per cent of Millennials said they were more likely to buy from a Canadian company online.

The reasons behind their preference for Canadian companies is divided. Half of those surveyed said they bought domestically in an effort to support Canadian companies and the economy while 32 per cent said they did so to avoid high shipping costs.

As for what Canadians are buying online, Circa’s research found that the top items are clothing (42 per cent) and Flights or travel packages (40 per cent). That is followed by books (34 per cent), show or game tickets (33 per cent), electronics (32 per cent) and household goods (29 per cent). Music, movies, videos, government services and games were high on the list.

In their most recent work in the area of digital technology, Statistics Canada reported that just 13 per cent of Canadian retailers were selling products online. Yet Forrester Research predicts that ecommerce will reach 10 per cent in the next few years.

RETAILERS RESPOND

There are a variety of online shopping methods that are available in the Canadian market including hybrid purchases, which are ones were the items are ordered online and picked up at a local store. This includes one recently rolled out by Loblaw’s, a grocery chain, that allows customers to shop online and pick them up later, which helps consumers avoid delivery costs.

There has also been a big investment by companies made into social media advertising, cybersecurity and mobile payments.

The study by PayPal found that one in four respondents said they had bought something based on a social media advertisement and 54 per cent indicated they would be interested. One enticement retailers have used is to offer a discount via social media, 55 per cent of respondents said that would be enough to get them to buy.

CANADIAN SHOPPING HABITS

According to analyst Paul Briggs, many Canadians like cross-border shopping and that preference has transferred online.

“Traditionally in Canada, the options for getting what you want online weren’t great. That is changing but that reality in the first place forced people to look south of the border for products they wanted online,” Briggs said in a podcast interview.

“Canadians are shopping domestically more and more now.”

He said the two big factors were the improvement of offerings to consumers by retailer and the strong Canadian dollar.

In a study by SAS, an analytics company, some of the reasons Canadian’s shop online include to save time (35 per cent) or for convenience (48 per cent).

E-commerce has also been growing in the mobile world, with 29 per cent of Canadian smartphone owners reporting they used their device as a mobile payment system, according to research by Nielsen.

The report found that customers have been using their phones to compare prices, look at customer reviews, research details of the product, and find local shops carrying the product they are looking for.

Of those who participated in the survey 69 per cent used their smartphone to compare prices, 82 per cent looked for a store location, 64 checked stock status and 63 per cent were using a mobile site or app from a retailer.

Seven in 10 respondents said they have used ecommerce to assist in a purchase and 6 in 10 say they read online reviews before they buy. While 76 per cent said they use their mobile device to complete the purchase and 87 reported using their device to assist the purchase.

FUTURE OF ECOMMERCE

E-commerce spending has been expected to rise to over $27 billion CAD for 2017, which is just over seven per cent of all retail sales in the country.

Briggs, who developed eMarketer’s report on ecommerce in Canada, said that the country was moving into double-digital gains. He has predicted that ecommerce will count for 10 per cent of all retails sales by 2020.

CONCLUSION

While e-commerce in Canada still lags behind sales in the United States, many retailers have been making an effort to increase their online sales.

By accommodating the changing shopping habits of Canadians, which include click and collect and mobile offerings, retails, like Supply Expert have been able to offer shoppers what they are looking for and fill a need in a growing market space.

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