Canadians who order products online and have them sent to U.S. mailboxes are partly to blame for Canadian e-commerce sales lagging other countries, according to a new study released March 12.
Online sales are expected to be 4.8% of all retail sales in Canada in 2015, according to the study, which was conducted by the Centre for Retail Research and released by RetailMeNot Inc.
That’s far below the 12.7% of retail sales that e-commerce transactions are expected to total in the U.S. and the 8.4% of retail sales that e-commerce transactions are expected to total across Europe
“Although cross-border shopping may be detracting from online sales growth as a percentage of total retail spending in Canada, retailers are making improvements to the online shopping experience to capture the 50% of Canadians now purchasing online,” said Josh Harding, who is vice-president of global operations at RetailMeNot, Inc.
He expects the share of Canadian sales done online to increase more than 13% $28.51 billion in 2015. Other regions have even faster e-commerce growth rates. Germany, for example, is expected to increase its online shopping by 23% year over year to $87.5 billion this year.
RetailMeNot’s study also found that Canadians spend less when they do shop online.
The average Canadian online shopper is expected to spend $1,531 in 2015, or 6.8% more than in 2014. In contrast, the average online-shopping European is projected to spend $1,609 in 2015 whereas American counterparts are projected to spend about $2,197 in 2015.
E-commerce veterans have a range of other ideas for why Canadians lag much of the rest of the Western world when it comes to ordering products using the Internet.
“Generally shipping rates are higher in Canada,” SHOEme CEO Roger Hardy told Business in Vancouver last year.
He added that Canadians have historically also had less online selection than in other countries. Indochino CEO Kyle Vucko agreed. He told BIV last year that many U.S. retailers have tended to focus on that large domestic market because Canada has the “buying power” of the state of Texas.
Better transportation networks and density have also made e-commerce easier in the U.S. and Europe because goods can get to customers faster, Vucko added.
