Online shopping behaviour in Canada

LinkedIn Twitter Facebook

 

Sponsored by:
Landmark Global

When Canadian Shoppers buy online, how do they go about it, and what do they buy? Use of mobile is growing, and the use of various devices for online shopping looks a lot like that of the UK. Electronics, books and music, apparel, and beauty products are the big online categories.

 

Online shoppers do tend to be younger, but older demographics are becoming accustomed to eCommerce, and are buying online in greater numbers.

 

Canadian eCommerce has been a sleeping giant, but it’s waking up. And quickly. This article looks at the online shopping behaviour of the Canadian eCommerce market.

Key Points

  • Younger shoppers predominate, but not to the extent that they do in many countries
  • Silver surfers, with their higher disposable incomes, are also increasingly enthusiastic online shoppers
  • Categories which are sympathetic to cross-border ecommerce, such as apparel, health & beauty, baby & toys and homewares are already well shopped online in Canada
  • Device use is familiar: mobile is growing rapidly, but with the usual low conversion rate
  • A good mobile experience may well be more of a competitive advantage in Canada than back home
  • Amazon are already present in strength, but without dominating in the way they do in the US

General trends

While eCommerce represented only 4.5% of retail sales in 2013, this is predicted to rise quickly to 8.2% by 2018 (Source: 2015 Borderfree Index: Canada Country Report), and several other data points seem to suggest even more rapid growth than this might be expected. The overall trend is definitely onwards and upwards.

Canada Historical and Forecast eCommerce Sales

Figure 1: Overall eCommerce sales trends in Canada (2015 Borderfree Index: Canada Country Report)

In fact, it could reasonably be argued that the status of Canada closely resembles that of Australia a year or two ago: everything points to green, and there is probably a significant early-mover advantage to be claimed.

 

For those suspicious of this type of high-level aggregated data, there is some very strong collateral available in the form of actual parcel volumes delivered by Canada Post (who have by far the dominant position in parcel carriage in Canada – see the logistics section). They report an overall rise of 16% in parcel volumes first-half 2014-first-half 2015.

Canada Category Growth in eCommerce Parcel Volumes

Figure 2: Category level parcel growth (Canada Post, eCommerce Continues to Grow, October 2015)

Be warned however: “mass merchant” on this chart might well be a nice euphemism for Amazon.

Demographics of online shoppers

In mid-2013, it was estimated that 41% of consumers bought at least one product online (Business Development Bank of Canada, 5 game changing consumer trends, October 2013). By the end of 2014 this had risen to around 80%, a fairly startling rise.

 

As is typical in most developed markets, there is a skew towards younger consumers. This is less marked than in many countries, meaning that silver-surfer propositions targeting more affluent older demographics will be relatively strongly placed in the Canadian online retail space.

Demographics and evolution of internet shoppers in Canada

Figure 3: Demographics and evolution of internet shoppers in Canada (Ipsos Canadian Inter@ctive Reid Report, 2014), (Canada Post, Online Shoppers & Buyers, 2012)

What they bought

Encouragingly, Canadians are keen to buy online in categories which are relatively easy to implement cross-border, especially clothing / apparel, health & beauty, baby & toys, and homewares.

Percentage of Canadian consumers who bought in category

Figure 4: Consumer category purchasing behaviour (Canada Post, Online Shoppers & Buyers, 2012). (Ipsos survey for Business Development Bank of Canada, 2013.)

Being realistic, categories such as consumer electronics or motor accessories only lend themselves to cross-border eCommerce in very specialised niches: nevertheless, online consumers for such products are also present in Canada (although of course you may well find competition from the US, especially for items with significant shipping costs due to weight or bulk, to be rather strong).

How they bought it

Average order values

 

Average order values (AOV) in Canada in 2014 were 74% of those in the UK (2015 Borderfree Index: Canada Country Report). There is no evidence that this reflects an unwillingness to make larger purchases online and is therefore possibly simply a mix issue — it is slightly unusual to see apparel so prominent relative to consumer electronics as a category in an evolving market such as Canada.

 

There is also some evidence that Canadians have traditionally been less comfortable with cards as payment methods than UK or US consumers, and although this has changed rapidly over the last decade, it may still be reflected in AOV.

 

It is also worth repeating IMRG data demonstrating that overseas orders typically have higher AOV. Even if Canada really does have lower AOV in your categories (which seems unlikely in reality), this effect will probably compensate overall.

Average Order Value by Destination

Figure 5: Average 1-man non-food order values for UK retailers (IMRG Metapack UK Delivery Index Report, January 2017)

Device usage

 

Canada has been slightly behind other markets in embracing smartphones due to prohibitively high data fees, and so mobile penetration remains a little behind what you might be used to.

 

Nevertheless, mobile is still significant and growing, and you cannot afford to be without a strong mobile experience if you intend to target Canada (it is in fact possible to speculate that one reason Canadians often shop online outside Canada – see opposite – is that quality of local mobile propositions is rather variable. Porting an existing strong mobile or responsive site to Canada might offer you an advantage.)

 

The percentage of visits via mobile exceeded 50% in early 2015.

Session split by device 2015

Figure 6: Sessions by device on Canadian eCommerce sites, 2015 (Source: Demac - Canadian eCommerce Quarterly Benchmark Q2 2015)

 

There is the usual disconnect between mobile sessions and mobile transactions seen in many countries (really in almost all countries except China), with conversion rates on mobile much lower than those on desktop.

Revenue split by device 2015

Figure 7: Revenue by device on Canadian eCommerce sites, 2015 (Source: Demac - Canadian eCommerce Quarterly Benchmark Q2 2015)

Why they bought it

Why Canadians buy online

 

Canadians buy online for reasons you’ll be familiar with: most believe it’s easier to research online than in store, 39% claim it’s the wider range of products, and 22% claim it’s for price reasons (Canada Post, Online Shoppers & Buyers, 2012).

 

You might be tempted to take that last statistic with a pinch of salt. Canadians are seriously prepared to look at overseas sites (especially US ones of course), and Amazon is growing rapidly. Price, and price transparency, almost certainly plays just as important a role in eCommerce in Canada as it does everywhere else.

 

Why Canadians don't buy online

 

Once again, no surprises…with one exception: customs and duty fees feature high on the list. Canadians are evidently more than usually aware of the cross-border purchasing possibilities that eCommerce offers them.

Top reasons why Canadians don't buy online

Figure 8: Why Canadians don’t buy online (Source: Demac - Canadian eCommerce Quarterly Benchmark Q2 2015)

 

Importantly, all of these items with the exception of customs duties are issues you can do something about. It’s also instructive to compare this with IMRG’s own data about why consumers are reluctant to buy from overseas sites, which once again largely includes easily-overcome obstacles.

Perceived barriers to purchase from an overseas retailer

Figure 9: Reasons for not shopping from overseas sites (IMRG Blackbay UK Consumer Home Delivery Review, 2015)

For more information on the Canadian eCommerce Market, download the FREE Canada Country Guide.

LinkedIn Twitter Facebook

Royal Mail Sponsor

Register today for unlimited article views, and unique insights

Register Now

Connectivity and online behaviour in Canada

Connectivity and online behaviour in Canada

With typical online behaviour similar to other western counties, the Canadian eCommerce market can be seen as very appealing to cross-border retail. Exploring its sophisticated infrastructure, this article looks at the details of Canadian shoppers’ behaviour online, and examines some of the demographic nuances in internet access, online activity, and device preferences.
Online retail payment methods in Canada

Online retail payment methods in Canada

In different markets, shoppers can have varying preferences when it comes to making payments for orders on eCommerce sites. Canada is no exception but happily, there is more of an opportunity than a challenge when it comes to online retail payment in Canada. This article looks at the online retail payment methods within the Canadian eCommerce market.
Online Retail Logistics in Canada

Online Retail Logistics in Canada

How should you go about planning your logistics strategy for servicing the Canadian eCommerce market and what are the options available? Canada is a spectacular 9,306 km from extreme east to extreme west so for any non-Canadian retailer looking for delivery partners to ship into the country, only large players with the scale to cover such a geography are particularly relevant. This article looks at the online retail logistics within Canada and how this impacts its eCommerce market.
5 tips for breaking into online retail in France

5 tips for breaking into online retail in France

France boasts being the 5th largest eCommerce market in the world and with an expectation to exceed €80 billion turnover in 2017, for those looking to enter this thriving online market here are five tips that could help you to break into the French online retail space.
Five things we learned at the eCommerce Worldwide Cross-Border Summit 2017

Five things we learned at the eCommerce Worldwide Cross-Border Summit 2017

On the 24th May 2017, we hosted our third annual Cross-Border Summit at the ExCeL London. Delegates from retailers and solution providers across the globe came to hear and share the latest insight on cross-border trading. But what were the key takeaways from the day?
2020 Vision: Spring provides route to ‘Destination Benelux’

2020 Vision: Spring provides route to ‘Destination Benelux’

With more than 28 million citizens between them, Belgium and the Netherlands are among the fastest-growing eCommerce markets when it comes to cross-border purchases meaning that they have rocketed up the rankings for attractiveness to retailers.
Entering the Emerging Markets of Latin America: Strategy Essentials

Entering the Emerging Markets of Latin America: Strategy Essentials

Latin America is a target market region for many business looking to expand globally. Brazil and Mexico are undeniable growth markets and the rest of Latin America (LATAM) is welcoming internet, social media, and eCommerce with open arms.
Interview with Melanie Smallwood, International Buying Director at Global Fashion Group

Interview with Melanie Smallwood, International Buying Director at Global Fashion Group

eCommerce Worldwide Cross-Border Summit 2017 - Ahead of our annual event on 24th May, we interview Melanie Smallwood, International Buying Director at Global Fashion Group, to learn from her experience and knowledge in cross-border trading around the world.
Interview with Gregor McMillan, Business Development, China at The Hut Group

Interview with Gregor McMillan, Business Development, China at The Hut Group

eCommerce Worldwide Cross-Border Summit 2017 - Ahead of our annual event on 24th May, we interview Gregor McMillan, Business Development, China at The Hut Group, to learn from his experience and knowledge in cross-border trading into China.
Interview with Michael Truluck, CEO at La Redoute

Interview with Michael Truluck, CEO at La Redoute

eCommerce Worldwide Cross-Border Summit 2017 - Ahead of our annual event on 24th May, we interview Michael Truluck, CEO at La Redoute, to learn from his experience and knowledge in cross-border trading.

Contact Us

eCommerce Worldwide
2 Ching Court
49-53 Monmouth St
London
WC2H 9EY

Tel: 0203 696 0980
2016© eCommerce Worldwide

Keep In Touch

powered by Affino

About eCommerce Worldwide

eCommerce Worldwide provides online retailers with all the information, and resources, they need to develop cross-border strategies for entering new markets around the world
Read More