October 19, 2022
TL’DR: 1. Online shopping is growing, and this trend is here to stay; 2. Your shipping time, shipping rate, return policy, and delivery experience matters; 3. Shoppers are discovering retailers through social media than through in-store visits.
Canada Post has published a 22 page report on the online shopping expectations from Canadians in 2020. Here are the few key takeaways I have summarized to save you time.
Online Shopping is Growing
According to the report, eight out of ten Canadians shopped online in 2019, spending a combined figure of $65 billion dollars — which is expected to rise thirty two percent to $108 billion dollars by 2023. There are several factors boosting the growth of Canadian e-commerce stores. Politics, trade and exchange rates, and Canadian retailers offering a greater choice of products online makes it inevitable that Canadians are shopping more at their local retailers. As a result, the average number of purchases made outside the country dropped by almost one third.
We’re also seeing an increase in sales channels. For example, shoppers are choosing to buy directly from manufacturers and wholesalers. It’s easier now than ever to get an online store up and running. Additionally, shoppers do purchases from wholesalers because of the cheaper options, better selection and products. Although this does offer a slight competition to local retailers, however, if the retailers can remain competitive by offering the better online shopping experience as will be highlighted below.
Lastly, with the mainstream usage of social media, it’s easier to reach your customers directly and promote your product. In fact, 46% of online shoppers have visited a retailer’s website after receiving social media ads. Here’s what the breakdown looks like across various social media platforms:
It’s notable that Facebook and Instagram ads are where most online shoppers receive the ads. A quick crash course on Facebook ads marketing on YouTube could be considered a good use of time.
The Biggest Influence For Online Purchases
Understandably, a retailer’s shipping policy is the most important factor when shoppers decide to make an online purchase. While a mere 62% of purchases by Canadians qualified for free shipping, 67% said that they’ll abandon cart if there’s no free shipping. Additionally, 52% cite upfront delivery expectations as a key influencer in the purchase, while 37% are willing to abandon cart when they don’t know the delivery date up front.
It is also noteworthy that online shoppers take consideration with retailer’s online return policy. After all, they haven’t seen the physical item they are buying. As much as returns suck for retailers, it is part of the e-commerce business and offering a lenient return policy will influence conversion.
Although free shipping has more impact on shopping behaviour than from fast delivery, almost all online shoppers nevertheless factor in the delivery speed before the purchase. As online shoppers adapt to Amazon’s lightning speed, so does their expectations for other retailers. The expectation of faster delivery time has been on a steady rise over the past two years. Note, shoppers expect processing time to be included in your estimated shipping time.
While these figures do seem extreme at first glance, however, upon reflection on myself and on my personal online shopping habits, I do consider myself part of the status quo. Overall, with cross-border shopping waning, there are ever more opportunities for Canadian retailers to grow on the online space. It’s also considered an important factor for online shoppers to know that they’re buying from a Canadian company and delivered by a Canadian company. So if you do use a Canadian courier, let your customers know about it.
Once you know what influences online shoppers’ habits, you need to know where and how to reach them. The majority (52%) of online shoppers discover retailers via search on Google or Amazon, while a third said it’s through word of mouth, social media, or by searching specific stores. Interestingly, only 12% discover retailers while visiting retail stores. It is clear that online marketing is the most effective way to reach new customers and retailers will need to adapt to stay competitive.