Christmas came a little early this year…

In 2011, Media Experts released a The Top 6 Priorities for e-Commerce Holiday Results
in 2011, a White Paper on the growth of e-commerce and online shopping in Canada and much of the data we had received allowed us to speculate that 2011 would be a banner year for Canadian online retailers. In short, the paper noted that Canadians live online. On a per capita basis, we are more likely to spend time online, consume more online media, search, watch video and bank online than our counterparts in other economically developed countries The data displayed evidence of increasing demand from Canadian consumers for online shopping and suggested ways that online retailers could prepare themselves to capitalize on that demand.

And even though Canadians have proven to be quite comfortable living online, Canadian retailers and marketers are only now catching up with this very active and growing consumer base.

Many Canadian retailers have readied themselves (or are preparing) to capture their share of Canadian e-commerce growth that is expected to reach $22 Billion this year. Even Canada Post is pitching in, launching a new suite of e-commerce products for retailers in October of this year. These same retailers are also hoping to keep Canadians shopping north of the border. According to a November 2012 Techvibes posting by Dan Verhaeghe, Shop.ca’s co-founder, Trevor Newell said that “Just 1% of all retail commerce is online-driven in Canada. That’s compared to the United States, which sits at 9%. The numbers suggest Canadians have far more e-commerce activity on US sites than Canadian ones”.

But Canadian companies are going to have to do more than simply offer e-commerce capabilities if they are to keep up with their U.S. competition. They need to support their online stores with marketing, and earlier in the year, if the current trend continues.

A Lot at Stake

Research from Chase Paymentech this past September found that US retailers with a web presence can expect about half of their holiday sales to come from e-commerce this year. Additionally, a survey conducted by BIGinsight for the U.S. based, National Retail Federation (NRF), found that over 40% of US Internet users will have begun shopping for the holidays before November of this year. BIGinsight also conducted research for SHOP.org and found that 38.5% of all U.S. online retailers will have started their holiday marketing campaigns before November, in order to capture this demand. Over 61% will have started by Halloween week.

As the US economy continues to lurch forward, US marketers have already demonstrated that they will be as aggressive as possible in trying to secure a larger piece of the e-commerce pie, even as far as marketing directly to Canadians (like auction sites, Ebay and QuiBids or Overstock.com) or opening stores in Canada (like Target, Nordstrom and J. Crew_.

According to comScore, over 500,000 Canadians visited Target.com in October 2012, with an average of 22,000 Canadian unique visitors per day. This is in advance of their opening 125+ Canadian stores and web store in 2013. Jcrew.com had 107,000 Canadian Unique Visitors in the same time frame, Nordstrom had 206,000.

A number of American retailers are trying to capitalize on the increases in Black Friday and Cyber Monday shopping by getting to customers prior to the US Thanksgiving weekend. Many are increasing their pre-Black Friday promotions and sales and some are opening their brick and mortar retail outlets earlier, even on Thanksgiving Day, still considered an important family holiday in the US.

According to an eMarketer forecast, online holiday season sales (including all online sales during November and December) will reach $54.47 billion, up 16.8% over 2011 levels. This will be the fourth consecutive year that online holiday sales post annual growth in the mid-to-high teens, after plummeting 8.2% in 2008 during the depths of the Great Recession.

In August comScore in the U.S. reported that 2011 Black Friday online spending was up 26% over the 2010 level, compared with a 22% jump in spending on Cyber Monday. Despite slower growth, Cyber Monday remained the biggest single online shopping day of the year, with US internet users spending over $1.25 billion.

How Early is Early?

Recent headlines would suggest that Canadians may not be open to holiday promotion too early in the year. Grumpy Twitter comments and customer complaints forced Shoppers Drug Mart to shut off their holiday music almost as soon as it started in early November.

Despite this consumer protest, our online behaviour suggests that our holiday shopping has started by October, and by early November is in full swing.According to comScore, October 2012 saw the largest number of Canadians visiting a retail website (23.7 million of us or over 85% of the total online audience in Canada) than in the previous 14 months. Google search trends also indicate that a sharp increase in the number of Canadians looking to “shop online” or searching for “gift ideas” started toramp up during the last week of October and the first week of November this year.

What Retailers Need to Do

Canadian retailers need to recognize the importance of the opportunity before them and start building and reclaiming market share on both sides of the border. The Canadian ecommerce market continues to grow (eMarketer forecasts it will reach over $34 Billion by 2015) and unless domestic retailers start ramping up their efforts, they will effectively hand that business over to retailers from the US and abroad looking to expand their footprint. Canadian retailers must also start marketing the holiday sales season earlier and more aggressively than they are accustomed to. Perhaps the messaging in October or November doesn’t specifically address the holiday season, however the promotions and events must be designed to pre-empt and get a head start on any late November or early December shopping.