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Online Shopping - Canada - November 2015

"Despite high engagement, consumers show a strong affinity towards buying products in-store as opposed to online. Limited category engagement may be a contributor as Canadians are primarily buying electronics and apparel online. Both types of products require a level of familiarity, which drives consumers to physical shops prior to purchasing, at which point, there is a preference to buy the product there. Concerns around security as well as lack of clarity around shipping purchases and returns are also detractors."
- Carol Wong-Li, Senior Analyst, Lifestyles and Leisure

This report discusses the following key topics:

  • The majority of Canadian shoppers still prefer buying from physical stores
  • Category involvement for online shopping is fairly limited
  • Most of the time, price determines which online retailers consumers buy

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Table of contents

  1. Overview

    • What you need to know
    • Executive Summary

      • The issues
        • The majority of Canadian shoppers still prefer buying from physical stores
          • Figure 1: Select attitudes towards online shopping, August 2015
        • Category involvement for online shopping is fairly limited
          • Figure 2: Categories purchased, August 2015
        • Most of the time, price determines which online retailers consumers buy from
          • Figure 3: Select attitudes towards online shopping, August 2015
        • The opportunities
          • Internet shopping means more choices; more choices means more guidance is welcome
            • Figure 4: Online shopping attitudes related to physical stores, August 2015
          • A good opportunity to target older men
            • Figure 5: Shop online at least monthly (any device), by age and gender, August 2015
          • Parents are engaged and interest varies by age of children at home
            • Figure 6: Categories purchased, by presence of children, August 2015
          • What it means
          • The Market – What You Need to Know

            • Population shifts should benefit e-commerce
              • The Canadian dollar will trigger interest in buying from Canadian shops
                • E-commerce is predicted to rise and mobile plays a role
                • Market Factors

                  • Demographic factors
                    • The population is growing and ethnically diverse
                      • Figure 7: Share of population of Canada, by territory/province, 2014
                    • Canada’s population is aging and will continue to do so in the coming years
                      • Figure 8: Population aged 65 years and over in Canada, historical and projected (% of total), 1971-2061
                    • Economic factors
                      • Recent economic activities have negatively impacted consumer confidence
                        • Figure 9: Consumer Confidence Index, monthly, January 2008-January 2015
                      • A weaker Canadian dollar will impact shopping both consumers and retailers
                        • Figure 10: Exchange rate (CAD>USD/GBP), January 2008-January 2015
                      • Industry factors
                        • E-commerce sales are projected to grow
                          • Figure 11: Retail e-commerce sales in Canada (in billion Canadian dollars), 2012-19
                        • Canadians are shopping on mobile
                          • Figure 12: Frequency and device used to shop online, August 2015
                      • Key Players – What You Need to Know

                        • Shifting power dynamics necessitate a multi-channel approach
                          • Innovative companies are breaking down barriers associated with traditional shopping methods
                          • What’s Changing?

                              • Blurring lines between physical and virtual shopping
                                • Physical stores go high tech – Thyme Maternity
                                  • Going multichannel – Ikea opens more physical locations in light of rising web sales
                                    • Online retailers add a personal touch – Amazon opens its first brick-and-mortar store
                                    • Who’s Innovating?

                                        • Going up against the big names – Best Buy
                                          • Bridging the gap with new approaches
                                            • True Fit – Using an algorithm to help find the right size
                                              • Warby Parker – Order online and try on glasses at home
                                                • Brayola – Using crowdsourcing technique to find the perfect bra
                                                • The Consumer – What You Need to Know

                                                  • Canadians are active online shoppers
                                                    • Category engagement reveals differing interests
                                                      • To buy or not to buy online – Physical stores still have an advantage
                                                        • The line is not clear between physical and online stores
                                                          • Online stores are not exempt from high expectations of good customer service
                                                          • Frequency of Online Shopping

                                                            • Over half of Canadians shop online regularly
                                                              • Figure 13: Frequency of online shopping (any device), August 2015
                                                            • Men are active online shoppers
                                                                • Figure 14: Shop online at least monthly (any device), by age and gender, August 2015
                                                              • Parents are also regulars
                                                                • A third of Chinese Canadians make internet purchases weekly
                                                                  • Two thirds of the LGBT community are monthly online shoppers
                                                                    • Canadians shop online less frequently than Americans
                                                                    • Typical Six-month Spend

                                                                      • Average total spend over six months suggests smaller cart sizes
                                                                        • Figure 15: Dollar value spent online over past six months, August 2015
                                                                      • Men spend more liberally with age
                                                                        • Figure 16: Dollar value spent online over past six months, by age and gender, August 2015
                                                                      • Spend by affluence suggests need for a multipronged strategy
                                                                        • Figure 17: Dollar value spent online over past six months, by income, August 2015
                                                                    • Categories Purchased

                                                                      • Wide range of items are purchased online
                                                                        • Figure 18: Categories purchased, August 2015
                                                                      • Clothing and footwear purchases driven by women and Millennial men
                                                                        • Men and parents of teens drive interest in electronics and appliances
                                                                          • Age of children influences types of online purchases made by parents
                                                                          • Reasons for Shopping Online

                                                                            • Online shopping allows for choices
                                                                                • Figure 19: Online shopping attitudes related to physical stores, August 2015
                                                                              • Access to products is important to those from mid-range income households
                                                                                • More choices means more guidance is welcome
                                                                                  • The internet makes it easy to learn about products
                                                                                    • Figure 20: Ease in learning about products online, August 2015
                                                                                  • Learning about products means comparisons
                                                                                    • More information please…
                                                                                    • Reasons for Not Shopping Online

                                                                                      • Price and familiarity with a product are determining factors
                                                                                        • Figure 21: Select attitudes towards online shopping, August 2015
                                                                                      • Returns may nullify the convenience of shopping online: A qualitative look
                                                                                        • In-store expert advice is still valued
                                                                                          • Security concerns remain – A qualitative look
                                                                                          • The Connection between Physical and Online Stores

                                                                                            • Active online shoppers are showrooming
                                                                                                • Figure 22: In-store related attitudes towards online shopping, August 2015
                                                                                              • Physical stores retain an advantage
                                                                                                • Category involvement a likely culprit for men
                                                                                                  • Demographic distribution leads to regional differences
                                                                                                  • Choosing Online Retailers

                                                                                                    • Price will win most of the time
                                                                                                      • Figure 23: Cost an ease of use related attitudes towards online shopping, August 2015
                                                                                                    • Customer service still matters in the online shopping experience
                                                                                                      • Speed of checkout is an aspect enjoyed by frequent shoppers
                                                                                                        • Shipping options are on the consideration list
                                                                                                          • Providing a qualifying amount may benefit retailers
                                                                                                            • Figure 24: Shipping preferences, August 2015
                                                                                                          • Delivery and return options are considered
                                                                                                            • Expedited shipping sees lower interest
                                                                                                              • Clarity around shipping is desired
                                                                                                              • Appendix – Data Sources and Abbreviations

                                                                                                                • Data sources
                                                                                                                  • Consumer survey data
                                                                                                                    • Consumer qualitative research
                                                                                                                      • Abbreviations and terms
                                                                                                                        • Abbreviations

                                                                                                                        Companies Covered

                                                                                                                        To learn more about the companies covered in this report please contact us.

                                                                                                                        Online Shopping - Canada - November 2015

                                                                                                                        £3,199.84 (Excl.Tax)