US Retailers Be Prepared – 62% of Canadian Consumers Buy Online

Late last year the Canadian government reported that Internet sales in that country passed C$15.1 billion during 2009, an 18 percent increase from the C$12.8 billion that was spent online during 2007.  Internet sales were slow to take hold in Canada, but clearly, the option has caught on and is here to stay.  In fact, Canadian shoppers are projected to spend more than C$22.8 billion during 2012.  And the good news for U.S. retailers, is that roughly 62 percent of those consumers will be buying from U.S. retailers.

Canadian consumers are increasingly looking to U.S. retailers, since the stronger Canadian dollar means increased buying power, and since U.S. goods are generally in high demand among quality and status conscious consumers.  But, as a 2010 report by Visa Inc., points out, Canadian consumers have set some specific parameters when it comes to U.S. e-commerce:

• 82 percent do not want to pay extra shipping charges for cross border sales
• 75 percent are concerned about being faced with unexpected, or hidden charges
• 72 percent believe U.S. sites offer a wider selection

Despite the strong demand among Canadian consumers for U.S. goods, a surprising number of American businesses have yet to develop websites targeted at the potentially lucrative Canadian market.  Breaking into the Canadian market can be a difficult process, as U.S. shoe retailer Zappos.com learned.  Zappos, which has established a niche in the U.S. as a result of its “free shipping both ways” policy, found that it could not replicate that service in Canada, nor could it offer the same selection of brands, due to distribution agreements.  The company announced that, effective April 1, 2011, it would no longer offer service to the Canadian market.

Other U.S. retailers, including Amazon.com had to contend with stiff resistance from Canadian-based businesses, who claimed that the lower-priced U.S. retailer would unfairly infringe on their business.

According to Ksl eConsulting, there is a list of “do’s” for U.S. businesses interested in being “seriously considered as an online shopping destination for Canadians.” Among the tips:  Make sure your website lists prices in Canadian dollars, and be sure to use a Canadian shipping company!