Why this is important to Wisconsin businesses: Online shopping increased 58% over two years, and there is room for more growth.
Statistics Canada reports that as of July 2019, Canada has a population of just over 37 million, and a GDP per capita of just over $55,000 CAD. An estimated 82% of the population has access to the internet, which places the size of the e-commerce market at more than 30 million.
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 from 2016 to 2018. The report also notes that certain demographics and lifestyles are more disposed to online shopping. The majority of consumers driving e-commerce are those living in urban areas, predominantly women (though the cohort of male online shoppers trails by only 4%), couples without children, and the generational groups of Baby Boomers (ages 53-72) and millennials (ages 18-37). E-commerce participants also tend to have a higher income, with average annual reported earnings of over $90,000 CAD.
Categorizing shoppers by frequency of online shopping helps further illustrate the driving forces of this distribution channel. Shoppers are sorted into categories including one-time, occasional (two to six purchases), frequent (7 to 12 purchases), power (13 to 24 purchases), hyper (25 to 40 purchases) and hyper-elite (more than 40 purchases). The report also finds that Canadians are not only opting to shop online more often, but have increased their amount spent per purchase. Statistically, Canadians reported spending an average of $175 CAD per transaction in 2018, a 65% increase from $106 CAD per transaction in 2016.
From a U.S. business point of view, 77% of survey respondents reported purchasing from online retailers outside Canada, up from 53% in 2016. Shoppers in the hyper and hyper-elite categories reported making 90% of their online purchases from non-Canadian retailers, while 14% of all respondents predicted that their online shopping habits would lead them to buying increasing amounts from U.S. and Chinese retailers. The report concludes that there is still room for growth in both the average number of purchases per year and dollar value per purchase, taking the position that the growth ceiling has not yet been reached.
The study also highlighted some challenges for non-Canadian online retailers in the market, including the impact of exchange rate fluctuations on price point, delivery speed in light of geographic distance, delivery dates at checkout, tracking systems, ease of returns and import fees, to name a few. The report said businesses can address these challenges by becoming more acquainted with the different categories of online shopper and working to build brand loyalty via memberships or subscriptions or by catering to certain categories, concerns and expectations.
The retail sectors driving online transactions include computers/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%); jewelers (18%); music (CDs, records, videos) (17%); automotive (16%); and home décor (16%).