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E-commerce gathers pace in Canada

News, 21 February 2017
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TORONTO: E-commerce could account for 10% of all retail sales in Canada within the next few years, as consumers take advantage of growing omnichannel opportunities, a new forecast predicts.

According to eMarketer, retail e-commerce sales amounted to C$34.04bn in 2016 (a figure that excludes travel and event tickets) and are set to grow by almost two-thirds over the next four years, with an increasing proportion of that coming via mobile.

The researcher projects that retail e-commerce sales will hit C$55.78bn by 2020, when they will take a 10% share of the total, compared to 6.5% in 2016.

"While Canada has lagged behind the US and UK in ecommerce, it is now catching up as double-digit annual gains drive what growth there is in Canada's retail sector," said eMarketer analyst Paul Briggs.

Several factors are at work, including the strength of the Canadian dollar and "the vast improvement in the quality of offerings from Canadian retail", while click-and-collect options are also proving popular in country where distribution is a major issue for retailers.

Many of these are stepping up their investment in digital in response to the threat posed by Amazon, which came top or equal top in six of 12 retail categories, and second in two more, in a ranking of Canada's most trusted online retailers.

The E-Commerce Shopper Study from research company BrandSpark also reported that 90% of Canadians shop online, with most doing so several times per month and 85% looking for consumer reviews to help make their purchase decision.

Another signifier of developments in online retailing is the experience of real estate firms which are reporting demand for industrial space is taking off.

"We're focused on growth in e-commerce," Kevan Gorrie, CEO of Pure Industrial Real Estate Trust, told Bloomberg. He expects e-commerce will account for half of the company's portfolio in the next few years, up from 30% today.

Data sourced from eMarketer, BrandSpark, Bloomberg; additional content by Warc staff

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