The 2020 Canadian e-commerce report - Canada Post
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The 2020 Canadian e-commerce report What influences standout shopping experiences?
What influences the way
Canadians shop online?
Everything you need to know for the year ahead
As a Canadian online You need to know why they buy.
business in an increasingly Understanding shopper behaviour In this report:
will help get the most from your
competitive marketplace, 1. What’s happening in
online investment. When you know
you already know it’s hard what influences them, you can Canadian e-commerce?
to attract shoppers. So focus on what will create the Growth continues as online
what is it you need to do to biggest impact for you. markets mature
stand out? How do you 2. How to create standout
shopping experiences
encourage loyal customers In 2019, we surveyed 5,000
T
he top eight influences
to buy more? How do you Canadians who made online
driving choice of retailer
find the shoppers who help purchases in the last year to find
out what’s important to them when 3. Extending the online
businesses thrive? experience
shopping online. Each year in this
e-commerce report, we bring you Integrating channels to
the data insights from our research, increase acquisition
so you always have the information and retention
you need, and know where to focus About this report
to grow a strong business. Appendix: Who are
Canada's online shoppers?
The 2020 Canadian e-commerce report | Introduction | 2
Retail Ecommerce Sales
Retail e-commerce sales Online shopping frequency*
2019 2018
Billions (CDN$) % of total sales
$108.10 Average number of
$98.10
16.6 17.2
purchases/year
$87.51 37% 36%
$75.57
$64.56
24% 24%
15% 16%
10% 9% 8% 9%
6% 5%
One-time Occasional Frequent Power Hyper Hyper Elite
shoppers (2-6 purchases) (7-12 purchases) (13-24 purchases) (25-40 purchases) (41+ purchases)
2019 2020 2021 2022 2023
Source: eMarketer, May 2019 * Percentages refer to the proportions of Canadian online shoppers and the number of purchases they make.
1. What’s happening in Canadian
e-commerce? Subscription Boxes
Growth continues as online markets mature
Our research tells us that While forecasts show growth, our
survey also suggests that the
60%
eight out of ten Canadians
number of items people are buying
shopped online in the
online remains much the same as of all online
previous year, and eMarketer last year. This could be influenced purchases in Canada
estimates spending at $65 by an omni-channel evolution: a are made by just
18%
billion in 2019 – rising to shift in 2018 holiday shopping,
almost $108 billion by more pickup in store and increasing
opportunities to experience brands of online shoppers,
2023. Thirty-two per cent
1
in person. the lucrative HYPER+
of Canadian online shoppers segment (Hyper/
say they plan to buy more Hyper Elite
segments).
online in the coming year.
The 2020 Canadian e-commerce report | What's happening in Canadian e-commerce? | 3
What do Canadians buy online?
Categories purchased | Overall*
62% 41% 31% 30% 29% 23% 22%
Clothing apparel Computers and Books Footwear Beauty products Home and Health products
(any) electronics garden
20% 17% 17% 17% 16% 16% 15%
Office supplies Toys Home decor Automotive Jewellery Sporting goods Groceries
(perishable)
42% 32% 16%
Women’s apparel Men’s apparel Children’s apparel
Domestic purchases
for clothing grew by
15% Small appliances
13% CDs/records/videos
9% Software/games
9% Groceries (non-perishable)
8% YoY,
mostly due to a
11% Collectibles 7% Cannabis/cannabis products 17%
increase in men’s
11% Furniture 7% Other apparel shopping.
11% Pet food or supplies 4% Large appliances
10% Baby products or supplies 3% Vaping appliances
*Percentage of online shoppers buying from each category.
The 2020 Canadian e-commerce report | What's happening in Canadian e-commerce? | 4
Domestic/cross-border shopping
2019 2018
Average number
of purchases
10.9 94%
In Canada
10.7 95%
Outside of 7.3 75%
Canada
9.3 77%
5.3 64%
In the U.S.
5.7 67%
Canadian retailers benefit as
cross-border shopping declines
With politics, trade and the
exchange rate influencing online
40%
Where to focus your
shopping habits – and Canadian resources:
of
retailers offering a greater choice
those who shopped in While international brands
of products online – it’s only Canada intend to shop still pose a competitive
natural that Canadian shoppers more domestically in challenge, particularly in
continue to buy from Canada’s the coming year vs. fashion and electronics,
retailers. And four out of ten plan 37% in 2018. there's an exciting
to shop with them more in the opportunity to lean into
coming year. While the percentage
of cross-border shoppers has 8% of those
who cross-border
shopper appetites for
made-in-Canada brands and
home-grown retailers.
declined only slightly, the average shopped intend to do
number of purchases made more in the coming
outside the country dropped by year vs. 10% in 2018.
almost one third.
The 2020 Canadian e-commerce report | What's happening in Canadian e-commerce? | 5
How are online shopping habits changing?
From marketplaces and direct-from-manufacturer
channels, to social selling and subscription boxes,
Where to focus your
e-commerce in Canada is evolving as it matures. resources:
This emerging channel
offers growth opportunities
CHANNELS for manufacturers and
wholesalers who get it right.
Early adopters will earn the
Direct from manufacturer Top reasons for buying directly from
the manufacturer: right to stand out from the
crowd. Selling directly from
Twenty-six per cent of shoppers
reported that they purchased 34% Manufacturer’s
promotion
the manufacturer isn’t for
everyone, so do your
directly from the manufacturer research and weigh the
benefits:
in the past year. Among the most
28%
Cheaper to buy
directly from the
frequent buyers (41+ purchases manufacturer
• Direct from manufacturer
a year), that number soars to helps build better
Better selection relationships and
39%. Why?
28% on the
manufacturer’s
website
customer insights.
• You can move products
faster to benefit from
27%
Product/brand emerging trends.
not available
locally in store • You have greater control
over your products and
reputation.
The 2020 Canadian e-commerce report | What's happening in Canadian e-commerce? | 6
Social selling
Where to focus your resources:
Social selling involves direct interaction with potential online
A popular touchpoint in many
shoppers through content and products you share with them on customer journeys –
social platforms. Fifty-five per cent of e-merchants2 are selling particularly young, frequent
through social media and these are the channels they choose: and high-volume online
shoppers – carefully targeted
95% on Facebook
social selling is a great way to
enlarge your footprint, gain
visibility and drive traffic to
your website cost effectively:
69% on Instagram
• Use shopper feedback on
social to adapt products and
14% on Twitter
46% processes to new
expectations and trends.
• Humanize your brand by
connecting with your
11% on Pinterest customers and sharing
values or by providing a
behind-the-scenes peek at
3% on Snapchat
of online shoppers have visited
a retailer website or app after
your operations.
• Social media is designed for
receiving a social media ad.
conversation, so be sure to
2% on other stay active, respond to
comments and questions and
encourage shoppers to share
your content.
The 2020 Canadian e-commerce report | What's happening in Canadian e-commerce? | 7
Marketplaces
42%
of e-merchants3
are selling on
marketplaces. Where to focus your
resources:
of Canadian
75%
online shoppers Marketplaces can be another
have shopped
from a domestic
quick way to expand your online
marketplace. footprint. These high-traffic
Percentage of online shoppers who have
locations offer speed to market
shopped from a marketplace:
and allow you to engage with a
ripe shopper base without
overburdening your logistics:
• Choose where to sell by
72% 9% 3% matching shoppers you seek
with marketplaces they visit.
• Consider testing new products
Amazon.ca eBay.ca Etsy (Canadian seller) in a marketplace before adding
resources to your back-end
operations.
7% 6% 2%
Walmart Canada Best Buy Canada Newegg Canada
Marketplace Marketplace
The 2020 Canadian e-commerce report | What's happening in Canadian e-commerce? | 8
Subscription Boxes
Subscription boxes*
Overall 11%
Average number
of subscriptions: 2
One-time shoppers 5%
Occasional (2-6) 5%
Frequent (7-12) 11%
Power (13-24) 15%
Hyper (25-40) 17%
Hyper Elite (41+) 23%
* Percentage of online shoppers who received a subscription box in the past year.
Types of subscription boxes
28% Meal kits 7% Lifestyle
Selling models
New e-commerce models, 25% Food and
beverage 7% Pet
players and shopper
expectations are changing
shopping habits. Two that 22% Beauty 6% Baby/children
stand out are subscription
shopping, often associated Fitness and
with brand introductions, and
recurring deliveries, which tend
13% Health and
wellness 5% sporting
goods
to be centred on convenience.
Often, both offer attractive 12% Clothing and
accessories 5% Tech, games,
geek boxes
benefits such as free shipping,
faster delivery or savings.
10% Books 3% Jewellery
7% Arts, crafts
and hobbies 1% Other
The 2020 Canadian e-commerce report | What's happening in Canadian e-commerce? | 9
Recurring Deliveries
Recurring deliveries* Types of recurring deliveries
Overall 8%
One-time
shoppers
3%
32% Beauty
products 14% Pet food or
supplies
Occasional (2-6) 3%
Frequent (7-12) 6% Groceries
Power (13-24) 11% 28% (pantry
items)
13% Groceries
(perishable)
Hyper (25-40) 15%
Cannabis/
27% Health 3%
Hyper Elite (41+) 26%
cannabis
products products
* Percentage of online shoppers who have received a recurring delivery in the past year.
1%
Baby
17% products or
supplies
Other
15% Office
supplies
Selling models
Those who shop the most shop
Where to focus your
for subscription boxes and resources:
recurring deliveries. Hyper Elite
Your products may be just
shoppers (41+ purchases/year) right for a subscription box
are the power users of these or recurring delivery, giving
services, with around a quarter of you access to a larger pool
them signed up. The more of shoppers, with the added
someone buys online, the more bonus of more predictable
cash flow:
likely they are to subscribe, which
in turn creates a further increase • Subscription boxes can be
in online purchasing. an easy way to test new
products.
• Use subscriptions and
recurring deliveries to
increase customer
interactions and upsell
opportunities.
• Use data wisely to target
other frequent online
shoppers based on
demographics, geography,
lifestyle and life stage.
The 2020 Canadian e-commerce report | What's happening in Canadian e-commerce? | 10The top eight influences driving choice of retailer
Offers free shipping 80%
Manages delivery expectations
52%
(ex., delivery date)
Offers a better returns policy 50%
Offers faster shipping 46%
Provides a better delivery experience
44%
(ex., convenient)
Is a Canadian-based company 40%
Participates in a loyalty or
37%
rewards program
Is committed to environmental 14%
protection
2. How to create standout
shopping experiences
The top eight influences driving choice of retailer
As Canadian e-commerce
expands, the factors that
Our researchers identified eight
influence buyer behaviour
of the biggest influences that
are changing. What used to determine a shopper’s choice of
differentiate retailers from retailer. Find out what matters
their competitors, like free most to Canada’s shoppers and
shipping or fast checkout, see if you are keeping pace with
these make-or-break changes.
are now necessities. To
When we asked online shoppers
recognize and keep up with what influences their decision to
these changes means to choose one retailer over another,
stand out and succeed. here’s what we learned:
The 2020 Canadian e-commerce report | How to create standout shopping experiences | 11Where to focus your
resources:
However big or small your
online business, your
Free shipping shoppers expect free
shipping. It’s always
In the previous year, 77% of of online shoppers possible to strike a
86%
said they will shop
online purchases made by more often with
balance. Here’s how:
Canadians qualified for free retailers offering • Balance the expense of
free shipping.
shipping (this dropped to 62% free shipping by factoring
when excluding Amazon said they’ll abandon
it into the cost of each
purchases).
67% their cart when
there’s no free
shipping.
item.
• Consider a minimum
threshold. Shoppers love
free shipping and are
often willing to spend
Delivery expectations more for it.
• Use free shipping
It’s only natural that shoppers strategically during key
want to know when to expect periods – when sales
52%
cite upfront delivery
their order. Delivery details, or are slow or competition
expectations as a
is fierce.
their absence, often influence the key influencer.
decision to buy from or search • Offer a mix of delivery
for another retailer. It’s a mistake ?? abandoned their
speeds matched with
cost options. You’ll spend
to be evasive about timing, so
37%
cart when they
didn’t know delivery less, and many shoppers
delivery information needs to be date and other info will pay for speed.
realistic, clear and declared up front.
before purchase.
Where to focus your
resources:
• Avoid abandoned carts
by providing key
information such as
delivery date and cost
prior to checkout.
The 2020 Canadian e-commerce report | How to create standout shopping experiences | 12Returns policy
Where to focus your
While retailers can try to do resources:
everything possible to keep
Your first step is to spend
returns to a minimum, returns time evaluating and
are a fact of e-commerce life. developing your returns
And, with half of all online strategy. There are three
shoppers choosing the retailers key considerations to keep
in mind:
offering the best returns policy,
how you deal with returns is an 1. Shopper experience
important pre-purchase 2. Returns management
consideration. Focusing on of online shoppers
3. The true cost of
62%
have abandoned
meeting returns expectations is their cart over returns
a great way to create a standout concerns with their
With your strategy in place,
shopping experience and, in a returns policy.
make it a priority to display
recent survey of Canadian online your policy on your landing
will stop shopping
retailers, over half said that
improving the returns experience 79% from a retailer after
a bad returns
page. Offering free
returns? Spelling it out will
is a priority for them.4 experience. help drive conversions.
Learn more about crafting
a great returns strategy by
downloading our guide at
canadapost.ca/returnsguide.
The 2020 Canadian e-commerce report | How to create standout shopping experiences | 13Paid shipping 2019 2018
Shoppers expect
Average days 3.9 4.1
29% shipping to be a
19% little faster, whether
16%
paid or free.
13%
11%
5% 6%
1%Delivery experience
Where to focus your
Not every shopper has the same resources:
expectations, so providing a As an extension of your
selection of convenient delivery will abandon a cart brand, the delivery
experience is as important
options is your best approach. ? or avoid future
Include pickup locations such as 22% purchases with a
particular retailer if
as the shopping
experience you’ve taken
a local store or post office. a delivery company
care to create. It feeds
is not identified.
customer satisfaction and
of online shoppers leads to repeat business.
54%
prefer Canada Post
as their delivery So, take time to choose
company, while 12% your delivery partner.
had no preference.5
• Think about the different
challenges your
customers face – from
urban to rural and across
A best-in-class delivery life stages. Let them
experience offers flexibility, choose the most
will shop more often
convenience and choice.
Shoppers need the flexibility of 67% from retailers who
offer flexible
delivery options.
convenient delivery
location.
different delivery destinations. • Nearly 91% of Canadians
They value the convenience of live within five kilometres
of online shoppers
getting a package at their house, surveyed will of a post office. Let
apartment or office – or maybe abandon their cart shoppers select delivery
somewhere nearby. And they 27% or avoid a retailer if
there is a lack of
to a convenient post
office by adding that
want to pick and choose – delivery options or
capability to your website.
pickup options
because preferences can change. offered.
The 2020 Canadian e-commerce report | How to create standout shopping experiences | 15Where to focus your
resources:
• A Canadian domain name
Canadian retailers clearly signals your
affinity and promotes
With interest in cross-border trust. Consider .ca
shopping waning, online over .com.
shoppers have told us that
• Share your story with
buying Canadian-made products pride. Write about the
from Canadian-owned retailers is birth of your brand. Made
important when choosing where in Canada? Creating jobs
to shop online. They also prefer for Canadians? Actively
Canadian-based delivery connect with shoppers
who care.
companies. The location of your
business and the origin of your • Recognize the logistical
concerns of shopping
products give you the chance to
abroad and play up the
differentiate yourself from advantages of shopping
international competitors. in Canada: lower cost of
Let everyone know about it. delivery, zero customs,
Canadian $ transactions,
benefit to the Canadian
economy.
What Canadian shoppers say about Canadian retailers
In a survey of 3,000 Canadians in August 2019, shoppers said:6
I prefer to deal with Canadian 61%
companies as much as possible.
I prefer to have my packages
delivered by a Canadian-based 61%
delivery company.
I prefer to buy
55%
Canadian-made products.
When shopping online, I prefer to shop
52%
from Canadian-owned retailers.
The 2020 Canadian e-commerce report | How to create standout shopping experiences | 16Where to focus your
resources:
Loyalty and rewards • Start by asking yourself if
a loyalty program is right
Loyal customers are the lifeblood for your business. Who
of your business, and it’s easier are your most loyal
will shop more often customers and how can
to sell to them than acquire new
71%
from retailers who tailor
rewards and discounts you enhance their
ones. Loyalty programs are one to them. This jumps to shopping experience?
of the most effective ways to 80% among Gen-Zers.
• Planning or revitalizing a
engage with customers and loyalty program? Think
increase revenue. Thirty-seven beyond discounts:
per cent of the online shoppers What entices shoppers to join, or actively shoppers like exclusivity.
participate in, a loyalty program?
we surveyed said participation in Instead of sparking
competitive pricing wars,
a loyalty or rewards program
offer valuable
influenced their choice of retailer.
85% free enrollment
experiences, such as free
returns or first-in-line
Loyalty programs entice existing access to new products
customers to spend more and
77%
and events. Engage your
easy to redeem customers regularly to
more often – a great way to
promote awareness.
gather first-party data and better
understand shopper activity both • For a standout loyalty
online and offline. 69% rewards can be
redeemed at any time
program, make it easy to
navigate and participate.
Don’t expect customers
to carry a card.
The 2020 Canadian e-commerce report | How to create standout shopping experiences | 17Where to focus your
resources:
Eco-shoppers want to
connect with retailers who
care about protecting the
environment. Your
environmental stewardship
Environmental factors could be a big differentiator
for your online business,
With climate change awareness of online shoppers said
and one you need to talk
top of newsfeeds and a it upsets them when about wherever you connect
69%
retailers use excessive with consumers. Focus, too,
groundswell of youth action, it’s or unnecessary on making continuous
no surprise that some online packaging when
changes to reduce the
shipping purchases to
shoppers make increasingly them. environmental impact of
informed choices based on their will shop more with
your products and
environmental values. According packaging:
53%
retailers who make an
effort to reduce
to our survey, your commitment packaging used for • Audit your processes to
to environmental protection is shipping. reduce your environmental
influencing purchase decisions will shop more often footprint.
among 14% of online shoppers. 41% with retailers who
support an
• Increase the percentage of
recycled and recyclable
And we anticipate this trend to environmental cause.
gather momentum in the coming content in your packaging,
avoid mixed materials,
years. To reduce packaging, reduce plastics and
of online shoppers Styrofoam.
Many shoppers want to do prefer retailers to ship
something for the environment.
They’re willing to wait longer for
66% all their items at the
same time, even if it
means they have to
• Research reusable
packaging options.
delivery if their purchase is wait longer. • Optimize your packaging
To reduce emissions, process and set targets for
consolidated into a single materials reduction.
shipment and/or if it helps lower of online shoppers
prefer retailers to ship Learn more about
emissions. Communicating your
environmental approach and 62% all their items at the
same time, even if it
means they have to
packaging. Download
our guide at canadapost.ca/
working with like-minded partners wait longer. packagingguide.
can create positive connections
and earn shopper loyalty.
The 2020 Canadian e-commerce report | How to create standout shopping experiences | 183. Extending the online experience
Integrating channels to improve acquisition and retention
Once you know what Customer journeys now include
influences Canadian online multiple touchpoints and channels.
How do you reach the right
shopping habits, you need
shoppers so they know what sets
to be clear about where you apart from other online
your promises and retailers? How do they know you’ll
capabilities match meet all their delivery expectations?
those expectations. How do they hear about your
environmental advocacy, your
rewards program and your products
that are proudly made in Canada?
How do you become a shopper’s
retailer of choice in a sea
of options?
The 2020 Canadian e-commerce report | Extending the online experience | 19How do shoppers discover new online retailers?
when searching for
58% specific items (typically
with Google or Amazon)
32% through social
media 12% while visiting
the retail store
by searching through advertising
35% through word of mouth 30% for specific
stores
12% they received in
the mail
2% some other way
Where to focus your
resources:
• Optimize your
“searchability” so you show
Be discoverable across all channels up when shoppers look for
products like yours.
Thirty-five per cent of online
shoppers go to Google first.
With so many potential points of
of online shoppers will • Prioritize social listening to
contact, it’s important to make
every channel work for you. An 58% visit a retailer website/
app after receiving an
email ad.
monitor feedback, choose
the right channels, get
integrated, carefully sequenced shopper insights and create
and balanced marketing mix is of online shoppers will customer lifetime value.
the most effective way to reach
audiences once data has
f
46% visit a retailer website/
app after receiving a
social media ad.
• Check your marketing
channel mix. Integrate
revealed who will be most of online shoppers will and sequence your
receptive to your message. 45% visit a retailer website/
app after receiving a
mail ad.
communications for
better results. Read the
Essential Guide to Direct Mail
to learn more at
canadapost.ca/
guidetodirectmail.
• Encourage loyalty at every
touchpoint. Frequent,
relevant interactions create
brand bonds – especially
over shared values and
common causes. Consider
developing loyalty-related
blog content or try triggering
direct mail when a shopper
abandons their cart.
The 2020 Canadian e-commerce report | Extending the online experience | 20About Canada Post
With its unrivalled delivery
network, Canada Post
gives every Canadian
About this report
access to the power of
online commerce. By
offering convenience,
We will be continuing this benchmark research annually, providing more choice and a superb
customer experience, it
in-depth analysis of online shopper journeys to identify critical drivers of has become the preferred
shopper satisfaction, triggers that lead to conversion and brand loyalty, choice of Canada’s online
shoppers, while its direct
as well as best operational practices to meet changing mail marketing solutions
shopper expectations. drive action for brands and
businesses of every size.
Speak with an e-commerce expert about this research and learn how to apply it to your business.
Get in touch at canadapost.ca/eshopperconnect or call toll-free 1-866-511-3131.
For more about the Canadian e-commerce landscape and the online shopper, visit
canadapost.ca/canadianecommerce.
Canadian online shopper E-merchant research
study methodology methodology
This research resulted from a survey of 5,000 This research resulted from a survey of 1,556
online shoppers in April 2019. Respondents Canadian B2C e-merchants between June and
were representative of the Canadian population August 2019. Respondents represented an
on key demographic variables, including age, array of business sizes, e-commerce volumes
gender and region. and online business types (ex., multi-channel,
pure play, marketplace, wholesalers,
1. Briggs, Paul et al. Canada Ecommerce 2019, eMarketer, 2019 manufacturers, etc.).
2. 3. 4. Canada Post, 2019 e-merchant Study, 19-201, August 2019
5. Canada Post, 2019 Corporate Brand Pulse, 19-206, May 2019
6. Canada Post, 2019 Consumer Study, 19-203, August 2019
The 2020 Canadian e-commerce report | About this report | 21Appendix: Who are Canada’s
online shoppers?
Age cohort Household composition
Millennials Gen-Xers Couples without Single parent
5% (24-37 years) 28% (38-52 years) children
42% 3%
Gen-Zers
(18-23 years)
5% 25%
Pre-boomers 5% 20% Living alone
(73+ years)
Couples with 23%
37%
children
12%
Baby boomers Single, living with
(53-72 years) other adults
Live in households with
$102, 306 Average annual
household income 30% dependent children under
the age of 25
Online shoppers in Canada
49% Male 41% Urban 21% Rural
51% Female 38% Suburban
The 2020 Canadian e-commerce report | Appendix | 22You can also read
