The changing face of the Canadian online shopper: what merchants need to know

The Canadian e-commerce landscape is constantly evolving. With each passing year, more Canadians are choosing to do the majority of their shopping online. This trend is driving changes in technology, the introduction of new products in the marketplace, and prompting new merchants to pop up every day to meet demand. As a merchant, it can be tough to keep up with the changing behaviours and desires of consumers. Our latest research will help you understand Canadian online shoppers today, so you can meet and exceed their expectations tomorrow.

In 2016, we released our groundbreaking e-Shopper research report on the state of the Canadian e-commerce market. A few years have passed since then, and now we’re back with new research, an enlightening analysis and a refreshed outlook on the state of the e-commerce market.

We surveyed 5000 Canadian online shoppers about their experiences and preferences and distilled that research into must-knows for merchants. Here’s what our research says about consumer behaviour and expectations.

Canadians are shopping online more than ever

The biggest takeaway from our research is that Canadians are shopping online more than ever before. We’ve broken up Canadian online shoppers into 6 different shopper segments – so you can better understand who’s buying, how often they shop online and what they’re buying.

Our research indicates that more online shoppers are becoming frequent shoppers, and the Hyper and Hyper Elite segments of consumers (those who make 25+ purchases online a year) has grown to make up 18 per cent of all online shoppers in Canada – an 8 per cent increase since 2016.

It’s clear that shoppers are becoming more comfortable and confident when it comes to making online purchases. As a result, we’re seeing large increases in the frequency of their purchases. Our research indicates that this increase will not slow down in 2019. Nearly one-third of online shoppers plan to make more online purchases this year, and 37 per cent say they will buy more online in Canada in the coming year. Less than 25 per cent of respondents in 2016 intended to do that.

The fact that so many consumers, in all of the segments above, plan to increase their online purchases in 2019 suggests that business will be booming for e-commerce merchants in Canada this year.

What Canadian shoppers are buying online

While computers, electronics, fashion, and books are still the top product categories for Canadian shoppers online, consumers are branching out more. A growing number of them are buying items from more diverse product categories such as footwear, collectibles, grocery, automotive, pet supplies, and even furniture. To capitalize on this new demand, some merchants are actively diversifying their product offerings.

Canadians want to buy Canadian

While it’s true that more Canadians are putting their trust and dollars in the hands of international retailers online than in previous years –77 per cent of respondents buy from outside of Canada, up from 53 per cent in 2016 – we are also seeing more Canadians shopping with local e-retailers. This trend will continue as many Canadians are planning to increase their purchases from domestic merchants this year. 37 per cent say they will buy more from Canada in 2019, compared to just 14 per cent who anticipate buying more from the United States or China.

Don’t sit back and relax just yet, though

This anticipated increase in local purchases isn’t guaranteed though, and Canadian retailers will have to work to make those sales because Canadian shoppers are getting more and more comfortable buying from businesses operating outside of Canada. The number of respondents that purchased goods from beyond our borders rose to 77 per cent this year – up from 53 per cent in 2016. Some are turning to merchants from the U.S. for more product choice, while others are turning to markets like China for lower-cost items.

Opportunities for growth

There are many growth opportunities within the market that Canadian e-commerce merchants can potentially capitalize on. The Hyper+ customer segment has been driving a boom in Canadian e-commerce for some time and will continue to in 2019. They currently make more than 25 purchases a year and account for 60 per cent of total online purchases in Canada. These consumers buy more frequently, put more in their baskets and plan to buy more in the coming year. They are young, affluent, and tech savvy. Look for different ways to keep this segment happy – like offering speedy delivery options and special VIP perks.

Offerings such as memberships, recurring deliveries, meal kits and subscription boxes are also becoming increasingly popular among Canadian shoppers. Services like these offer attractive perks – such as free shipping and faster delivery, which are all factors that motivate Hyper shoppers. Other segments are also starting to explore these types of services too, so there’s a great opportunity for merchants to acquire new customers, while also boosting retention among their existing base.

What consumers expect from Canadian merchants

As Canadians spend more time and money online, they are developing greater expectations for their shopping experience. For example, consumers today want more detailed information at checkout than they did in previous years. 16 per cent will abandon their cart when insufficient information is provided. 43 per cent will abandon the retailer entirely. Shoppers also want more delivery flexibility and insight – like the ability to specify delivery instructions, have packages delivered to a nearby post office and to learn more about the shipping carrier. Supplying estimated shipping costs and delivery dates upfront can go a long way to ensuring a superior checkout experience for your customers.

Tracking and delivery speed are also important factors for customers today. Roughly 40 per cent of shoppers will avoid retailers and carriers that don’t offer sufficient tracking information on their items. They also have higher expectations for delivery speed than they did in 2016. Three-day shipping will meet or exceed expectations for only 60 per cent of shoppers, while the other 40 per cent expect one or two-day shipping when they have to pay shipping fees. In 2016, shoppers with free shipping were willing to wait an average of eight days, but now their cut-off expectation is down to just one week. To keep your customers happy, optimizing your operations to get purchases to shoppers faster should be a priority this year.

To keep your customers happy, optimizing your operations to get purchases to shoppers faster should be a priority this year.

Meeting their expectations is worth the effort

As a retailer, knowing how your customers (and potential customers) behave –and what they expect out of an online shopping experience– is paramount. Meeting and/or exceeding their expectations can give you a competitive edge and position you nicely for the next stage in your company’s growth. Canada Post is committed to helping merchants succeed in this way.