Can Canadian e-Commerce Be As Successful As the US and UK?

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A few months ago e-Marketer published a report about the state of e-Commerce in Canada. Being the biggest fan and best customer of Canadian e-commerce, I can’t tell you how thrilled I am that it’s is finally starting to take off. But kids, we still have a ways to go before we can truly call ourselves a “leading” e-commerce nation.

Our Dependence on American-based e-tailers

Our love of everything American creates a demand to shop on American-owned-and-managed sites. But many American-based e-tailers simply refuse to accommodate Canadian customers because they don’t wanting to deal with duty, shipping and other nasty fulfillment issues. The result is unfortunate: Canadians are being put off of e-commerce because of negative reinforcement and limitations by U.S. sites.

Case in Point: www.gap.com and www.oldnavy.com sites simply refuse to ship to Canada. A friend of mine who works at the Canadian Gap office told me that Gap Canada’s management has been trying to get their California-based Head Office to consider a “dot ca” or just let Canadians buy off the main site. After much deliberation, the U.S. management decided against selling to Canadians over the internet, because we are not a lucrative e-commerce market. They’re kind of right – but their attitude is also leading to a vicious circle. You can’t create a lucrative e-commerce market by consistently pissing off Canadian e-consumers.

I encountered a similar situation when I tried to buy a special “toddler floaty” swimsuit for my son off the Speedo website. I landed on the Speedo splash page (pardon the pun) and chose Canada. I was impressed to see a fully functional shopping cart in the Canadian site. But, on checkout, the Speedo site refused to take my order and I was left feeling like a second-class citizen (and I was choked I could not get this specialty-suit for my kid). Speedo faked me out and I am now checking out other brands – I even (gasp) had to go to the mall!


 

Few and Far-Between

In addition to providing positive shopping experiences to customers, we need to ensure that our e-industry continues to inject scads of money into the Canadian economy – and then some. Kudos to Canadian-owned e-commerce retailers operating in Canada (Indigo, Zip.ca, ShoeWarehouse.com) and the “dot CA’s” of American-based sites for doing their part (sears.ca, toysrus.ca, ebay.ca). These efforts all contribute to building our young industry into a stable and healthy one. However, there are only a handful of Canadian-owned start-ups that have grown into successful multi-national e-tailers (Simply AudioBooks, M.A.C. Cosmetics, MegaDox and WestJet are the only ones I can think of). And that concerns me for our future.

What are the barriers to Canadian e-tailers going international? American and U.K. sites do it. Why haven’t we jumped on that bandwagon?

Changing Customer Behaviour

The media certainly isn’t helping when they broadcast news stories about internet fraud and identity theft. Sure, we need to stay one step ahead of the cyber-criminals but the media has the Canadian public absolutely terrified to use their credit cards on a website (when in reality, dumpster-diving is the main cause of identity theft).

In addition to fear of identity theft, over 40% of the Canadian public is of the Baby Boomer generation. This group has begun to embrace e-commerce, but they’re coming into their retirement with a “living on a strict budget in case I live to 100” mindset. In light of this, what group should a new e-tailer target to get good sales?

I think I am one of those rare people who use e-commerce in my daily life – I wouldn’t survive without it. A few of you probably use it a lot too. But the average Canadian does not – they prefer to do it “old school”. Yet, Americans and Brits have no trouble using online shopping. So what is our general hang-up? We need to head-off consumer fears and fix broken consumer perceptions if we’re going to be an e-commerce nation. So how do we go about doing that?

Where Do We Go From Here?

Remember when the media has us convinced that e-commerce was going to cause shopping malls to be ghost-towns? We would do all of our shopping online! Our commute to the office would be the 10 paces to our home computer! All of our shopping would be done in our PJ’s! All from the comfort of our homes! That was ten years ago – and we’re nowhere near that yet. Will we ever be?

So, I guess I’m ending this post with more questions than closure. Is there something we, as the industry experts, can do to “push” the industry? Can we lobby the government to make e-commerce easier for consumers? Do we campaign to U.S.-based sites to include Canadians into their trading area? Should we have a meeting or conference on this?

The good news is that mainstream ecommerce solutions are spreading worldwide, making it easier to build online retailing sites.

What do you think?

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8 thoughts on “Can Canadian e-Commerce Be As Successful As the US and UK?

  1. Jeff Lancaster

    I think the biggest hang-up for me is still speed.
    Generally when I want something it is to fill a particular need and I want it now. So I feel more comfortable just jumping in the car and going to get it – and I have it the same day.

  2. Joy Boyson

    My vote (from your list): 1st “Campaign to U.S.-based sites to include Canada within their trading area”. 2nd “Grow our capabilities in parallel”.
    History shows that Canada is an early adopter of all things communication related (we need to be — how else will we stay in touch with each other over this great land mass!).
    And that goes for the Internet and the offshoot of e-commerce. However, taking it to the masses requires patience and a consistent strategy.
    P.S. If you compare apples to apples (per capita figures) then you might feel better about all this…

  3. Derek Szeto

    I hoping that the threat of some of the newer US retailers attempting to break into the Canadian market will push (and scare) Canadian retailers into taking e-commerce more seriously.
    At this stage it’s probably much easier to break into Canadian e-commerce than into storefront retail. Buy.com and Crutchfield.ca are couple examples and I’m sure we’ll see more.

  4. Valla

    I am a small Canadian e-tailer, in a niche market. What I see as the main reason there aren’t more Canadian shops online, comes from my experience in researching and implementing my own site. What it boils down to, is we just don’t have access to the range of choice that is available in the US and the UK. Yes there are Canadian companies who offer packages that include hosting, site design, payment gateway, merchant services, security and other essential features, but close comparison shows that the costs are much higher than what most small businesses can afford. The “Big 3” US e-commerce building/hosting sites that most people gravitate to for ease of use are PayPal Shops, EBay Stores and Yahoo Shops. However, their monthly costs are a percentage of sales, and if you ever wanted to move to a different host, you can’t, because of their proprietory software. It is important to realize that shopping cart software is written in different coding languages than regular websites. The web hosting service must be able to support the cart language, the cart software must be compatible with your payment gateway and your payment gateway accessible by your merchant services. And then there’s site design. For a Canadian to have a really unique site, one that does not look and operate like the plethora of amateur out-of-the-box shopping sites, one really has to spend a great deal of time and of course money on research and development. It can become a vicious circle, because all of the necessities listed above must be able to work together at a reasonable cost. The best shopping cart package I found, is not available to Canadians. The ones that are offered in Canada either aren’t comprehensive enough with features in catalog and administration, or have monthly costs and transaction fees that make them just too expensive. So after my experience, I decided to work on creating a package that is affordable, is easy to use, has no compatibility issues, and is tailored to Canadian small businesses. It will be available summer of 2008.

  5. Simon Rodrigue

    The solution to the problem is simple. As Canadian retailers we all need to make an investment in the online channel.
    From a consumer perspective it is hard to shop for products online in Canada. Search for a power tool, a piece of furniture or clothing and you are overwhelmed with the number of choices that do not have a localized (Canadian) offering. It only takes a couple of times with an outrageous shipping and custom brokerage bill to turn you right off the whole process.
    If all of the retailers in Canada invested in building a stronger online presence then consumers could better interact with the brands they know and trust from their in-store shopping lives. The crazy thing is that even though in the short term this may be a hard investment it will be critical to any businesses future success especially when:
    1. As Canadians we love the internet – we are among the leaders in online banking, broadband penetration and social media usage
    2. Canadian are among the top users of the internet to find information about purchases, we search more than most and depending on the category or study up to 70% of retail purchases have an online influence.
    3. The internet is the #2 consumed media in Canada – what would you do if you agency said you didn’t need to be in radio, print or specialty anymore. They are all have smaller consumption than the Internet and based on growth in a year or two the internet will be #1.
    A strong commitment in the space goes a long way and as retailers we need to be a big part of the solution.
    Cheers,
    Simon

  6. Ezra Silverton

    Great post of many of the Canadian vs. US ecommerce issues. As a few of you mentioned Canadian’s do spend a lot more time online then Amercian’s – so you would think we would have more Canadian ecommerce sites!
    I have outline many of the differences between our two countries in internet usages statistics http://blog.9thsphere.com/blog/?p=16
    The majority of our Canadian clients are afraid to take the ecommerce plunge – so I definitely find it to be a personality trait among many business owners.

  7. Robert Mendelson

    We started our site http://www.SelectBlindsCanada.ca by buying a copy of the existing US site SelectBlinds.com. Our edge is that we offer Canadian online shoppers a uniquely Canadian shopping experience: CAD prices, no surprise shipping or duties fees, a bilingual site and high quality product. The biggest problem we have is getting Canadians to think about buying online. Case in point–have you ever thought of buying blinds online? The way I see it, the online market in Canada is still in its infancy, and the only way is up.

  8. Nancy Collins

    The Canadian Online presence absolutly with out a doubt is deplorable. And Canadian companies should feel shame. Its the old saying about Canada vs the US in costomer service. It applies to ecommerce aswell. I am an online shopper. and I find 10 out of ten times I would end up shopping in the states, Canadians seem to plunk up sites ( if at all ) and expect the virtual doors to come crashing down. For the exception of large canadian stores like canadian tire, to which you already know their name and are easy to find. Most canadian businesses can not be found online And once they are. The prices are rediculas, shipping costs are often insane, or they simply are too lazy to imput the required information. Payment options are limited. I realise shipping in Canada is largly the fault of our inflated charges of canada post,
    But please, there must be something canadians or canadian companies can do. Ebay was able to cut a smidge of a deal with canada post. Why can’t other companies? Also payment gateways are limited. This also falls on the inflated charges of canadian banks.
    For the first time today, I was on a canadian site “HMV” and was floored to see they had interect payment option. No loading credit cards or running out for a money order. Just having that option secured their order from me. For the first time I was impressed with a canadian shop. So much so I did a search for Canadian shops with interact, in hopes that I might find some other stores that carry what I am looking for this holiday season. Items that I am unable to get my hands on in town. Taboot, this article is the first link on the search list. No shops.
    Perhaps I am an e shopping snob, but I found a local online shop with no product listings today. If I can’t find what I’m looking for on their site, why should I bother to make the trip to their store? Stores might get more walk in business, If a potential customer could do a quick search, see a product and a price. and deside to drop in and pick it up, even if the store does not want to deal with delivering goods. A perfect example is Home Depot vs beaver lumber, home hardware. If I want to find a product and price on the home hardware site. I have to search through page after page of flyers and only maybe will I find what I’m looking for. there are No product listings with prices, no search, and a difficult to find contact informaiton. I just did 10 thousand dollars worth of renovations and needless to say they didn’t get a penny of it.
    Everyone has to get organized and work together if Canada is ever going to have a improved online presence. The banks, developers, store owners.
    One last thing. If an American company who has outlets on canadian soil wants to treat Canadian Customers like garbage online, start a campaign and boycot them. Online and in your local area aswell. I didn’t know that about the Gap, or Old Navy, Now that I do, they would be hard pressed to get my business again.
    Nancy 😀

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