CANADA
Can You Still Ignore
Ecommerce?
There has been a lot of press coverage in the past six months about Canadians’
online shopping habits — or lack thereof. However, as the retail environment
gets more competitive, traditional brick-and-mortar stores are showing their
willingness to enter the ecommerce channel. Recently, Best Buy publicly announced
that it would restructure its staff to take better advantage of online sales.
Canadian Tire launched an online shopping site this year. Nordstrom, a new
entrant to the Canadian market, plans to significantly boost spending on the
online channel this year, as well.
As the tide begins to shift, what do Canadian retailers need to know in order
to grow their online business?
About The NPD Group, Inc.
The NPD Group provides global information and advisory services to drive better business decisions. By combining unique data
assets with unmatched industry expertise, we help our clients track their markets, understand consumers, and drive profitable growth.
Practice areas include automotive, beauty, consumer electronics, entertainment, fashion, food / foodservice, home, luxury, mobile,
office supplies, sports, technology, toys, and video games. For more information, visit npd.com and npdgroupblog.com. Follow us on
Twitter: @npdgroup.
Are Canadians Buying Online?
There has been debate as to why Canadians buy so little online. A larger percentage of Canadians have
Internet access than residents in counties like the United States, France, and Japan.1 Yet online shopping is
underdeveloped in Canada compared to other countries, especially the United States. Theories abound,
from the geographical make-up of Canada, which makes it easier for Canadians to physically shop in stores,
to the lack of online shopping sites from Canada’s major retailers.
One thing we do know is that Canadians are visiting retailers’ websites, and they are purchasing online. In
2013, nearly two-thirds of Canadians made an online purchase over a six-month time span. Interestingly,
they did not make most of those purchases at Canadian retailers. Seventy-two per cent of Canadian online
buyers visited the Canadian Tire site, but no one purchased. Why? Because they couldn’t. Canadian Tire site
did not support online purchases. Sixty-seven per cent of consumers visited the Future Shop’s site, but only
5 per cent purchased. Of the top 10 retailer sites Canadians purchased from in 2013, all but one are
internationally-owned.
Top 10 Retailer Sites Visited by
Canadian Online Shoppers
Top 10 Retailer Sites — Purchases by
Canadian Online Shoppers in the Last Year
Amazon
74%
Amazon
28%
Canadian Tire
72%
eBay
16%
eBay
70%
Sears
10%
Future Shop
67%
Costco
10%
Sears
67%
Apple
7%
Walmart
64%
Future Shop
5%
Best Buy
63%
Walmart
4%
Costco
60%
Staples
4%
Staples
60%
Home Depot
3%
Home Depot
58%
Bestbuy
2%
Source: The NPD Group/Ecommerce Channel Report 2013: Canada
Top Reasons to Shop Online
The lack of Canadian retailer online presence may also contribute to the amount Canadians are spending
Easier
to shopEcommerce
around, research
or Report 2013 revealed that in 2013, Canadian online buyers
online. The NPD
Group’s
Channel
compare products
purchased an average of 8 items online, for a total of $346.50. This only accounted for 8 per cent of all 2013
To save time and effort
shopping dollars, reported by NPD’s Shopping Activity Services.
Easier to find the products / greater
selection available online than in stores
Why Do Canadians Buy Online?
Easier to check inventory
Convenience
In today’s world, convenience is often a key motivator. Online is no exception. Canadians
buy online to save
98%
time and money. They find it easier
shop around and locate the specific product they are looking for
To savetomoney
online. Of course,
it doesn’t
if they save
The stores
I like arehurt
not located
near money. The Ecommerce Channel Report 2013 showed 63 per
where I live
cent of survey respondents said they shop online to save money.
Enjoyment of shopping online
1
Other
0% 10% 20% 30% 40% 50% 60% 70%
Categories With the Strongest Purchase Incidence Online
IT Software
Toys/Games
The World Bank
Costco
compare products
60%
Staples
4%
To save time and effort
60%
Home Depot
3%
Home
Depot
Easier
to find the products / greater
selection available online than in stores
58%
Bestbuy
2%
Staples
Easier to check inventory
Convenience
98%
To save money
Top Reasons to Shop Online
Top Reasons to Shop Online
The stores I like are not located near
where I live
Easier to shop around, research or
compare
Enjoyment of shoppingproducts
online
To save time and effort
Other
Easier to find the products / greater
selection available online than in stores0% 10% 20% 30% 40% 50% 60% 70%
Easier to check inventory
Convenience
98%
To save money
Categories
With the
Strongest Purchase Incidence Online
The stores I like
are not located
near
where I live
Enjoyment of shopping online
IT Software
Toys/Games
Other
Video Games
0% 10% 20% 30% 40% 50% 60% 70%
Clothing
Source: The NPD Group/Ecommerce Channel Report 2013: Canada
DVDs/Music
Books
Withthe
theboard,
Strongest
Purchase
While saving money is a topCategories
priority across
the reasons
forIncidence
purchasingOnline
online vary by product. For
0%
10%
20%
30%
40%
50%
60%
example, 48 per cent of clothing buyers
report
online
sites offer
a greater
product
selection
than brick-andIT Software
mortar stores. And 40 per
cent of footwear buyers shop online so they can purchase from a U.S. retailer.
Consumers purchase electronics
online because they feel it’s easier to shop around and compare products.
Toys/Games
Video Games
Online Purchase Drivers
Clothing
Online Purchase
Drivers
Clothing
Clothing
and
Footwearand Footwear
DVDs/Music
Books
Easier to shop around or research
products
0%
10%
20%
30%
40%
50%
60%
Can buy from U.S. retailers
Footwear
To save time and effort
Clothing
Greater product selection
available
Online
Purchase Drivers Clothing and Footwear
online than in stores
To save
money
Easier to shop around
or research
products
0%
Can buy from U.S. retailers
10% 20% 30% 40% 50% 60%
Source: The NPD Group/Ecommerce Channel Report 2013: Canada
To save time and effort
Footwear
Clothing
What Do Canadians
Buy
Online?
Greater product
selection
available
online than in stores
Books, which were one of the first items for sale online, still have a first mover advantage. Fifty-two per
To save money
cent of Canadians have purchased a book online. Also popular are DVDs/music, clothing, video games,
toys/games, and IT software.
0%
10% 20% 30% 40% 50% 60%
Other
0% 10% 20% 30% 40% 50% 60% 70%
Categories
With
Purchase
Incidence
Online
Categories
Withthe
the Strongest
Strongest Purchase
Incidence
Online
IT Software
Toys/Games
Video Games
Clothing
DVDs/Music
Books
0%
10%
20%
30%
40%
50%
60%
Purchase incidence = Percentage of consumers who ever purchased online
Source: The NPD Group/Ecommerce Channel Report 2013: Canada
How Can You Win Online?
Online Purchase Drivers Clothing and Footwear
There are several ways you can increase online sales by targeting the right demographics or addressing the
top barriers Canadians have about online shopping.
Easier to shop around or research
products
■ Target Super Online Buyers: Super Online Buyers are consumers who have purchased an average of 11
buy fromover
U.S. the
retailers
products across sixCan
categories
past six months. And they are likely the consumers you want to
target: savvy and affluent. These consumers tend to make over $100,000 per year, andFootwear
they are between
To save time and effort
the ages of 25 and 54.
Clothing
Greater product
selection
available
■ Make Comparison
Shopping
Easy:
As noted earlier, consumers want to be able to compare products
online than in stores
when shopping, especially when it comes to electronics. Make it easy for them to compare products’
features and prices on your site.
sure images are clear and can be enlarged so consumers can see
To Make
save money
the products better.
0% 10%
20%
30% 40%
50%can
60%
■ Offer Free Shipping: Free shipping is the number-one
way
consumers
say you
increase online purchases.
■ Offer Easy Return Policies: Sixty-nine per cent of consumers say the biggest barrier to buying clothing
or footwear online is not being able to see or touch the products. If you let consumers return items via
mail or in-store, you may encourage more users to buy.
■ Let Them Shop Online and Pick Up In-Store: More retailers are letting consumers reserve product via
their websites. This allows consumers the convenience of shopping around online, but also lets them see
and touch the product in-store before making final payments. Plus, once consumers are in-store you may
have opportunities to sell them additional items.
Is Ecommerce Worth the Effort?
The Canadian retail environment is becoming increasingly competitive. In order to defend your business you’ll
need to compete both in-store and online — not just for sales, but for consumers’ awareness and consideration.
Today, an omni-channel strategy is no longer a nice-to-have, but a must-have for many retailers.
Learn More
For more information, contact us at 866-444-1411 or email [email protected].
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