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Canadian e-commerce plays catch-up with the U.S. market
The gap between the Canadian and U.S. markets is beginning to close, according to a recent survey by J.C. Williams on behalf of YourShops.ca, spurred in part by a shift from male dominance of online shopping to female dominance.
For years, the Canadian e-commerce market has lagged behind the U.S. Although Canadians` Internet use is among the highest in the world--and includes one of the highest broadband penetration rates--Canadians traditionally shy away from online shopping.
"On the demand side, Canadians have never had as much of a tendency toward catalog shopping or remote shopping," says Jim Okamura, senior partner at Chicago- based J.C. Williams. "On the supply side, there has not been nearly the extent of choice for shoppers. Not as many retailers have really opened up their e-commerce channels."
Indeed, of the top 50 retailers in Canada, more than half do not sell online, Okamura says.
But the gap between the Canadian and U.S. markets is beginning to close, according to a recent survey by J.C. Williams on behalf of YourShops.ca.
For one thing, there is a shift from male dominance of online shopping to female dominance. That is important because a high percentage of household spending is influenced by the female head of the household, Okamura says. In the U.S., the gender profile of e-commerce is 60% women, 40% men.
The survey found that the make-up of the Canadian market has shifted to 55% women, 45% men. "This was one of those points that was quite encouraging for us to see," he says.
What`s more, women are beginning to dominate in certain key categories of shoppers, Okamura says. "The impulse buyer has a much higher tendency to be a female shopper," he says. In addition, shoppers on a mission are women. "The search-and-destroy shoppers, those who essentially know what they want and where to get it, have tended to be a higher representation of female shoppers as well."
About 48% of the Canadian online buying population are information seekers who had an idea of a product they wanted to buy, yet needed more information through comparison shopping to make their decision, the survey found. About 41% of online buyers are shoppers on a mission who know what they want to buy and where to buy it. And 11% of online buyers are impulse shoppers who did not have an intended purchase but came across something they saw online and bought it.
The survey also found that online buyers skew younger than the general population, with 58% of shoppers between the ages of 18 and 48. 37% of buyers have household incomes of less than C$50,000. Another 37% have incomes between C$50,000 and C$79,000.
As with the U.S., early growth in the Canadian e-commerce market came in categories such as books, music and travel. But while the U.S. saw rapid growth in the next set of categories--clothing, beauty products, home furnishings--the Canadian market has been much slower to adapt, Okamura says. That also is beginning to change.
About 86% of Canadian e-commerce users are collectors of Air Miles, a loyalty program in which consumers earn reward miles for buying products and services at more than 100 Air Miles sponsors. The reward miles can be redeemed for more than 800 rewards, such as movie passes, electronic merchandise or travel.
The J.C. Williams survey reflects trends seen at YourShops.ca, says general manager Emmie Fukuchi. "60% of our shoppers are female, so it`s very similar to what the study says," she says. The study found that men spend more online--an average of $368 in the past six months vs. $275 for women.
Fukuchi says YourShops.ca is optimistic about the growth potential of the market. "In the last half of 2004, we saw some good indicators to suggest we`re starting to see some of the ramp-up that the U.S. has seen over the past few years," she says.
The study was based on a survey of 1,014 individuals from Nov. 10 to Nov.15.