Flat Growth For Canadian eCommerce

Canadian eCommerce growth was recently flat however still has an engaging upside. Recent studies found that Canadian retail e-commerce growth was flat year over year (2003-2004). When further examination but, approximately sixty% of the one hundred largest non-travel sites succeeded in growing their sales over 20%.

Also fascinating is the trending of Canadians from buying at non-Canadian sites to domestic sites (63% domestic, thirty seven% foreign). This “domestic shift” clearly advantages the launching of a new eCommerce business in Canada.

The sales opportunity lies with the “early adopters”, individuals primarily the 18-34 year old age range. This segment is more technologically savvy and additional possible to get online. In an exceedingly 2003 to 2004 sampling comparison, this section’s overall e-commerce spending increased 44%. The 35 to fifty four age cluster increased solely five% and 55+ increased 18% (includes online travel).

Overall Web Adoption rates still path the U.S. and return in at approximately 52%. However, with the development of latest Internet infrastructures and therefore the maturation of Canadian ISP’s, this range will possible rise in the subsequent three-5 years. The following quote from the Canadian government re-enforces this theme.

“To succeed in our new national goal (regarding e-commerce) Canadians can would like to develop strategies that build an intelligent infrastructure to function the backbone of the e-economy- by encouraging investment, strengthening research, enhancing commercialization and ensuring that every one Canadians have access to the present infrastructure and recognize the way to use it.” (September, 2004)

Shifting demographics & lack of on-line competition equal a considerable opportunity

Forrester Research reports that 48% of Canadian web shoppers are currently feminine compared to 39% in 2003. 74% of web patrons are married and doubtless are home shoppers, compared to 68% in 2003.

With the gender gap closing, on-line home retailers have a great chance to focus on their core customer segment: the thirty-40yr old feminine who owns or maintains a residence.

At intervals this sector, it’s rare for U.S. primarily based retailers to own online Canadian stores. Several brands will ship to Canada, for terribly high costs (customs duty & shipping) however this likely results in an unpleasant experience for the Canadian consumer. These high costs, compiled with a lack of domestic Canadian retailers providing an e-commerce giving, are driving the stagnant growth of the online sales channel.

By being a “initial-mover” in establishing a presence in the web marketplace inside Canada, online retailers can facilitate sales from consumers that wish to get products shipped from their native homeland when being acquired in Canadian currency.

Kind of like the U.S., consumers are exhibiting multi-channel tendencies and embracing the emergence of broadband connectivity.

Canada is the sole country in the world in which broadband overtook dial-up access in 2003. Currently 48% of all Canadian consumers have broadband access and they are 67% additional probably to possess high speed net-access than American consumers.

This spectacular penetration could prove to be a sturdy driver for on-line circulars and new online merchandising ways, as product differentiation are established outside of price.

Canadian shoppers also are parallel to U.S. customers in their multi-channel behavior. fifty eight% of Canadian shoppers have researched a product online and purchased offline, spending a median of $440. An online Canadian strategy must concentrate on integrating the online and physical store with store locator functionality and alternative tools to push cross-channel behavior.

In conclusion, multi-national retailers should closely examine the Canadian eCommerce opportunity. Attractive consumer demographics, an established broadband infrastructure, and a shift in overall searching tendencies build the Canada a high-growth and un-saturated area for multi-channel retail.

Source: LIM

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