Canadian consumers are among the world’s heaviest Internet users, and embrace E-commerce.
Canada has a population of close to 38 million people, and a gross domestic product (GDP) of just over CAD $55,000 per capita. Approximately 82% of the population have access to the Internet, leaving a consumer market opportunity of over 30 million people.
According to the 2019 Canada E-Commerce Benchmark Report, Canadian consumers are getting more comfortable and confident making online purchases, leading to a 58% increase in online spending between 2016 and 2018. The majority of consumers driving E-commerce live in urban areas, and are predominantly women (although online shopping by men trails by only 4%), couples without children, Baby Boomers (ages 53-72), and Millennials (ages 18-37).
E-commerce users tend to have a higher income, with average annual reported earnings of over CAD $90,000. The report categorizes shoppers as one-time or occasional (2-6 purchases per year), frequent (7-12 purchases), power (13-24 purchases), hyper (25-40 purchases), and hyper elite (more than 41 purchases). The report also finds that Canadians are not only opting to shop online more often, but are also spending more. Statistically, Canadians reported spending an average of CAD $175 per transaction in 2018, a 65% increase from CAD $106 per transaction in 2016.
Retail sectors driving online shopping include computers and electronics (42%), women’s apparel (41%), books (37%), men’s apparel (31%), beauty products (28%), home and garden (22%), health products (21%), office supplies (19%), toys (19%), jewelry (18%), music (CDs, records, and videos – 17%), automotive (16%), and home décor (16%).
Of the 2018 survey participants, 77% reported purchasing from online retailers outside Canada, up from 53% in 2016. Hyper+ shoppers reported making 90% of their online purchases from non-Canadian retailers, while 14% of all respondents anticipated that their online shopping habits would lead them to buying increasingly from U.S. and Chinese retailers.
Challenges for non-Canadian online retailers included changing price points due to fluctuating currency exchanges, speed of delivery due to geographical proximity, delivery dates at checkout, tracking systems, ease of returns, and import fees, to name a few. Research indicates that these challenges can be addressed by becoming more acquainted with the various categories of online shopper, building brand loyalty via memberships and subscriptions, and by catering to categorical triggers, concerns, and expectations.
As per the report: “There’s always an opportunity to increase purchase quantity and basket size because the growth ceiling hasn’t yet been reached.”
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