April 29, 2013
Last week Forrester published a report on the state of online retail in Canada. We surveyed 1,103 adult online shoppers in Canada to understand what challenges the Canadian public face when shopping online. We found that Canadian online shoppers have many complaints; among them high shipping costs and lackluster product assortments. Furthermore, Canadian online shoppers are acutely aware of the gap between the online experiences of domestic sites versus those in the US. Canadian sites are missing key online capabilities like free shipping, flexible pickup options, a stress-free return policy, and omnichannel payment options in addition to the obvious price discrepancies.
Some of the reports highlights include the following facts:
- Shipping costs are too still too high. Despite the eventual arrival of Amazon Prime in Canada and the increasing commonality of free shipping thresholds, sixty-eight percent of Canadian online shoppers we surveyed cited that delivery costs are their primary concern when shopping online.
- Product assortment online in Canada is lackluster. Thirty-seven percent of Canadian online shoppers say they can't find the products they are looking for online in Canada. Consequently, 32% of these frustrated shoppers ultimately end up buying instead from US or International sites and incurring the cost of shipping, custom duties and Canadian taxes.
- Prices are not competitive (at least in relation to the US). Sixty-two percent of Canadian online shoppers cite price as the #1 factor that influences their purchase decision, while only 30% cite that shopping from a Canadian domiciled brand influence their online shopping habits. Put simply, this means that Canadian online shoppers will sacrifice any loyalty to Canada-domiciled retailers if they can find the same product cheaper online at an online marketplace or via a US or international retailer.
- Omnichannel execution is immature. Canadian online shoppers crave basic omnichannel capabilities when shopping online, yet few Canadian retailers are delivering them. Sixty-five percent of Canadian online shoppers cite the ability to return products purchased online to a nearby store as important or critical to their purchase decision, while 61% cite the ability to view in-store inventory online as important or critical.
So what does the future hold for online retail in Canada? Some retailers like BestBuy, Wal-Mart and Amazon already offer mature Canadian-centric online shopping experiences, but many Canadian merchants still fail to deliver the basics. These merchants need to smarten up; US retail powerhouses, including Nordstrom and Target are not only opening physical stores in Canada but also have the means and, more importantly, the know-how to satisfy Canadian online shoppers. The Canadian consumer cares little for domestic loyalty – if they can’t find it domestically and at the right price, they are more than willing to play tax and duty roulette and shop from the US.
Forrester clients can read the full report here, or join me as I present this research at two upcoming events:
- In person at eTail Canada in Toronto on Tuesday, April 30th at 11am EST
- Virtually via a Forrester Webinar on Wednesday, May 8th at 1pm EST