Will e-commerce ever catch on in Canada?
In 2018, Canadian e-commerce trends didn’t perform as well as expected, despite shoppers indicating they planned to be online more.
PwC Canada reported in its 2018 Canadian holiday outlook that about one-third of Canadians considered e-commerce as their primary holiday shopping channel. They also said that most millennials (51%) think of online shopping first. In the U.S. 50% of overall consumers think of online shopping first.
The 2018 holiday shopping trends poll from Ebates Canada, released in early December, showed that 83% of respondents planned to do at least some online shopping this year, dedicating on average 36% of their budget to e-commerce.
Yet spending was lower than anticipated across the retail sector as a whole. Overspending dropped to an average of $384 (vs. $530 in 2017), down 28% – the lowest level in eight years, according to the annual RBC Post-Holiday Spending & Saving Insights Poll.
A recent report from Ed Strapagiel, whose analysis is based on Statistics Canada data, found that e-commerce sales accounted for 2.9% of all Canadian retail purchases for the year-to-date period ending November 2018 (excluding sales made on foreign websites).
The year-over-year sales over three months were up 18.6%, but those sales were much lower than the same period in 2017, when they grew by 26.2%. That said, e-commerce sales growth is still higher than location-based retail, but that growth is slowing down.
For the 12 months ending in November 2018, electronic shopping and mail-order houses had an estimated $10.4 billion in e-commerce sales. Bricks and mortar retailers who also sell online had an estimated $7.5 billion in e-commerce sales. Together, that’s $17.9 billion in e-commerce sales by Canadian operators over the year.
It wasn’t only e-commerce retail that suffered in 2018, however. 2018 was a bad year for retail in general, Strapagiel notes, and had the second-lowest growth year of the past six.
Strapagiel isn’t optimistic about 2019 retail sales, either.
South of the border, it was a different story. In the U.S., e-commerce sales represented 14.3% of total retail sales in 2018, with Amazon accounting for 40% of U.S. online retail.
Online sales grew 15.6% in the U.S. in 2017, so 2018 was a slight slowdown, but they still remained high. And they represented 51.9% of total retail sales growth —the largest share of growth for purchases made online since 2008.
Total retail sales in the U.S. (not including sale of items not normally bought online like fuel, automobiles and food at restaurants) hit $3.628 trillion last year, up 3.9% year over year, according to Internet Retailer’s analysis of the U.S. Commerce Department’s figures.
What do you think is in store 2019 retail sales trends – e-commerce or otherwise? And will Canadian e-commerce ever reach the same numbers that the U.S. has?
Storesupport Canada can help retailers and manufacturers create a strategy for 2019. Contact us today to learn more. Call 1-877-421-5081 or visit www.storesupport.ca.