Go North: Why Canada is an e-commerce gold mine for U.S. retailers

4 minute read

Are you tapping into Canada’s lucrative e-commerce opportunity? For Canadian online shoppers, the United States is where they want to be. Products often become available there first and the country boasts far more brand and product choices than Canada.  So it’s no surprise that from 2016 to 2018 the number of Canadian online shoppers buying from the U.S. shot up a staggering 44 per cent. That trend is poised to continue as e-commerce sales in Canada are expected to grow by 87 per cent between 2018 and 2022.1  That means that for U.S. e-retailers, Canada is a real land of opportunity.

Who are Canadian shoppers?

Canada is a nation of savvy online shoppers. Roughly 80 per cent of Canadians—almost 30 million people—have shopped online in the past year.2 Canadians that buy from the U.S. are pretty similar to Canadian online shoppers overall. A lot of them are living in urban and suburban neighbourhoods, are between the ages of 18-52, and have a high household income.

What are they buying and how much?

What Canadians buy south of the border tends to mirror what they buy locally. Product categories like computers and electronics, apparel, books and beauty are most purchased by Canadians online.

The average cart size has exploded since 2016. There’s been an astounding 70 per cent increase in that time that has landed the average cart spend at around $157 in 2018.3

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How often are Canadians buying from U.S. retailers?

Canadians are buying more often and becoming Frequent, Power, Hyper or what we refer to as HYPER+ shoppers. These are Canada’s most experienced online shoppers and are highly sought after by retailers. If they can’t find what they want within Canada’s borders, they’re not afraid to look elsewhere.

When shopping outside Canada, the #1 online destination for HYPER+ shoppers is the U.S., where 89 per cent have made at least one purchase in the past year. They currently make one purchase a year on average from the U.S. and 14 per cent intend to buy more south of the border in the coming year.4

If there’s one key takeaway here, it’s to keep this very lucrative segment happy by optimizing your operations for speed, keeping up with technology, and cultivating VIP perks to woo these savvy consumers.

How can U.S. retailers attract and satisfy Canadian customers?

Canada’s online shoppers have matured over the years. They expect a smooth and easy receiving experience. U.S. retailers hoping to meet or exceed their expectations should focus on:

  • Providing choice, convenience and control - Canadians want to have more control over the receiving experience to ensure that it will be as convenient as possible. Retailers who provide options for pickup make it easy for customers to retrieve their orders. From the customer’s perspective, this makes the receiving experience hassle-free. Offering key information on delivery dates upfront and prior to checkout also gives customers more control at checkout. All of these factors can help increase sales and minimize ongoing customer service and operational costs.
  • Offering reasonable shipping fees and faster delivery - For the most part, Canadians understand that items crossing the border can take a little longer to arrive and are willing to wait for them. That good news aside, they’re not willing to wait longer than they did three years ago. To manage their delivery expectations, make sure you’re upfront and honest about your services, fees and the features you offer to your Canadian customers. This will help you maximize your cart conversion.
  • Displaying all-in pricing in Canadian currency - Nobody likes unexpected fees. Giving Canadian customers an unpleasant surprise fee can lead to cart abandonment or abandonment of the retailer altogether. Make sure that Canadian shoppers are aware of duties, import taxes, and brokerage fees before they click the “buy” button. And also be clear about whether prices are in U.S. or Canadian dollars.
  • Enabling package tracking on shipments - The ability to track packages is important to Canadians. Some view it as a real inconvenience when they can’t do it, while others will be annoyed and avoid a retailer altogether over it. Make sure you integrate real-time parcel tracking for increased visibility, alert customers with notifications on delivery, and optimize your operations by working closely with your cross-border partners. This will allow you to compete on a more even playing field with Canadian retailers that are already offering the same services.

For U.S. merchants looking to increase their prospect pool, the Canadian e-commerce opportunity offers a wealth of possibilities. An affluent shopper base, a healthy appetite for U.S. products, and a growing amount of shoppers crossing the (online) border to buy makes Canada fertile ground for retailers. If you intend to make your move and Go North, focus on offering Canadian shoppers an ideal delivery experience.

1eMarketer, December 2018.
2 3 4 5 Canada Post. 2018 Canadian Online Shopper Study, CPC 18-200, April 2018.

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