eCommerce in Canada Is Billion-Dollar Industry
With e-commerce on the rise globally, it is no surprise that ecommerce in Canada has seen an increase in popularity. Historically, Canada has not been classified as a country where adoption of technology is very fast. E-commerce, therefore, has had limited success as compared to other developed nations. However, over the past few years there has been enough data collected to show that this might no longer be the case.
According to statistics, e-commerce accounted for about 4.5% of retail sales in 2013, this is predicted to rise quickly to 8.2% by 2018. By 2020, ecommerce is forecasted to account for 10% of total retail sales. Clearly, Canada is fast adopting e-commerce and the future looks bright for ecommerce stores.
So What Does this Mean for Businesses within Canada?
1) Shift in Consumer Buying Habits
As more and more Canadians get comfortable with buying online, companies that have a strong online presence will surely benefit. Research suggests that the gap between the US and Canadian ecommerce market is shrinking fast, especially on criteria such as average online spend, research of online products and the number of internet users.
Consumer demographics will also see a shift as the younger market segment adopts technology quicker. Therefore, businesses can expect to have younger people shopping online than older market segment.
2) Increase In Competition
Established international brands such as Amazon, Walmart etc. have all been operating in Canada. However, they have had limited product availability, with Canadian customers often having to skip buying products on ecommerce websites due to unavailability of shipment. With these large multinationals now recognizing the huge market potential in Canada, product availability has improved multifold. Therefore, Canadian businesses can expect much tougher competition from new entrants, as well as established players who ramp up their service offerings.
3) Marketing Strategy Evolution
As consumers move away from the traditional shopping channels, data and analytics start to play a very important role. All major retailers focus on consumer behavior, buying patterns, preferences, however eCommerce stores have the ability to track a lot more. Digital channels with precise targeting along with data analytics has put customer focus at the center of every marketing strategy. Personalized product offers and promotions, as opposed to whole sale discounts, are now the industry norm. eCommerce website development companies can be easily hired to fulfill this requirement.
Alternatively, new businesses can move towards rapidly developing the required level of technological and human resource capability themselves. Attention needs to be given to develop procedures to capture complete customer pathway and understating behaviors and preferences. A cross-departmental approach is required to properly integrate and execute a successful digital marketing strategy.
How Should Business React?
As outlined above, there are major changes taking place in the ecommerce market space. Businesses quickly need to create a focused plan of action, in order to successfully counter these changes. Those that adapt to new ways will be far greater positioned to take advantage of this ecommerce trend. Therefore, the need to act now is a requirement. There is a choice to make between jumping in to the market or play the waiting game. Failing to act quickly however, can result in substantial loss of income.
Businesses should look to plan for the long run. Jumping on the digital ecommerce trend will require heavy upfront investment, especially for those that do not already have an online presence. This is why companies should aim to start slowly building their online brand, focusing in on individual customer behavior and purchasing patterns.
The industry a particular company operates in should also be a factor in deciding how many resources to put into ecommerce capability development. According to recent data, categories such as electronics, books and apparel lead the way in terms of the most number of sales. Shoppers are already comfortable purchasing these products and so companies operating in these categories are less likely to face resistance. The emerging categories include automobiles, home furnishing, health products and general merchandise. Companies looking to enter these categories may have to aim for a long term plan, as they might not get the desired traction.
Regardless of the industry, one thing has become very apparent. Canadian businesses need to start to take advantage of the ecommerce disruption happening in Canada. The local industry thus far has lagged behind other developed nations and will face massive losses if this trend is not changed. Online consumer habits are changing fast and businesses need to adapt to these changes quickly.
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