Canadian retailers running out of time in e-commerce, report says

Canadian retailers who have delayed launching a robust e-commerce website are running out of time and face "their last wake-up call," suggests a new report on the state of online shopping in Canada.

The report by the U.S.-based Forrester Research, funded in part by Canada Post and Shop.ca, is based on surveys with 1,103 Canadian online shoppers and concludes that U.S. e-tailers are becoming better positioned to steal web revenues from homegrown companies.

"In the eyes of the consumer, the downsides of buying from a U.S.-based retailer rather than a domestic Canadian retailer are diminishing. Canadian retailers should be shaking in their boots," states the report.

"Canadian online shoppers will sacrifice any loyalty to Canada-domiciled retailers if they can find the same product cheaper online at an online marketplace or via a U.S. or international retailer."

According to Forrester, about 25 per cent of online spending by Canadians already goes through international websites. And the data suggests Canadian shoppers are growing increasingly comfortable with cross-border buying.

About 68 per cent of the online shoppers surveyed said they have shopped at a web store based outside Canada. Of those, 72 per cent said it was because they couldn't find what they were looking for from a Canadian e-tailer, and 59 per cent said cheaper prices contributed to their decision to buy abroad.

Cross-border online shopping

While it's not always ideal to get purchases shipped from outside the country due to issues like customs and sometimes-high delivery fees, many shoppers would still rather deal with those headaches than stick with Canadian web stores.

A third of the shoppers surveyed said they were willing to buy through non-Canadian sites even though they knew they could potentially get hit with an additional bill for duties.

Another 17 per cent said they would deal with the hassle of having purchases shipped to a friend or colleague in the U.S., or use a cross-border postal box service to take advantage of better deals available outside Canada.

When they did shop with Canadian e-stores, the biggest complaint from shoppers was shipping prices. About 68 per cent of those polled typically found them too high.

About 65 per cent said they wanted the option of returning products in-store rather than shipping them back, 56 per cent wanted e-tailers to match lower prices offered by competitors, and 48 per cent wanted to be able to pick up purchases in-store.

No 'quick fix'

Darren Meister, an associate professor at the Richard Ivey School of Business, said businesses that think they can simply buy a web e-commerce platform and instantly catch up to the competition are mistaken.

"I think some people will think, 'Well, when (e-commerce) is really popular we can just go out and buy it,' but buying the technology is just the starting point, you still have to put into place the return policies, the delivery policies," said Meister.

"The technology can't be implemented overnight. And at a certain point in time you'll fall so far behind that you'll never catch up, (the competition) will be growing faster than you can catch up."

The survey results are considered accurate within 2.95 percentage points 19 times out of 20.