The key to successful commerce is knowing your customers. The number of online shoppers is steadily increasing, partly driven by the need for touchless transactions amid the global pandemic. Following up on a 2019 research study, Flow recently commissioned a multi-market report to gain new insights into regional and cross-border shopping behaviors across the top 8 markets: Australia, Canada, China, France, Germany, Japan, the UK and the US.
The results show strong growth in the number of online shoppers and those willing to make purchases outside of their home countries. Here we’ll examine some consumer preferences of Canadian shoppers and how cross-border merchants can best serve this growing market.
Read the full report here: Canada: Market Guide to Cross-Border Best Practices [link]
An Enthusiastic Cross-Border Market
Canada’s e-commerce market grew by 75% last year, making it one of the fastest-growing markets in the world. The pandemic accelerated this growth by forcing many retailers online to boost sales while residents turned to online shopping for essential purchases.
Wooed by discount codes, free shipping, and online offers, plus the convenience of shopping anytime and anywhere, most Canadian consumers say they’ll continue to shop online at the same level they do now (58%) with no plans to return to pre-pandemic frequency. The exception being shoppers aged 18-24, who are more than twice as likely as those aged 45-54, to increase their e-commerce activity (49% vs. 22%) in the coming year.
Email marketing remains the leading method of Canadian customer acquisition, with search engine and word-of-mouth taking second and third place, respectively. Traditional media like television and print fell significantly while social media influence steadily climbed in rank. In 2020, Canada’s mobile internet market numbered 29.83 million users. Increased connectivity has led to greater exposure to outside markets and driven demand for international products, especially in segments like apparel, jewelry, and personal care. While many Canadian shoppers already made cross-border purchases, post-pandemic surveys reveal a 4% increase (87%) in the number of residents who say they shop on websites outside Canada.
Barriers to E-Commerce Transactions
Strong infrastructure and robust growth make Canada an appealing target for organizations looking to expand their brand’s reach geographically. However, it’s crucial to address obstacles that e-commerce consumers face when considering making a cross-border purchase. The most common barriers to completing these transactions include high shipping costs, shipping delays, costly taxes and tariffs, and unfavorable currency exchange rates. Some shoppers (17%) find the overall process confusing and are unclear about total costs.
When it comes to cart abandonment, shipping cost and lack of free shipping are two main factors contributing to discarded shopping carts. A mere 13% of Canadian consumers say they shop without discounts and promotions, while the remaining shoppers regularly employ savings measures like coupon codes, BOGO offers, and free shipping. A secure payment system, acceptance of preferred payment methods, and liberal return policies influence whether a transaction is completed.
5 Tips to Boost Cross-Border Sales in Canada
Make the most of your investment in cross-border sales with these tips for the Canadian market.
- Offer direct shipping methods. Locally and abroad, consumer tolerance for shipping delays is waning. While consumers may excuse pandemic-related supply chain problems for now, fast shipping is critical for long-term success.
- Show prices in CAD with taxes and fees included for simplicity. While most Canadians preferred taxes and tariffs to be broken out independently at checkout, 66% want them included in the total price. Transparent costs reduce the chance of cart abandonment at checkout.
- Accept multiple digital payment methods. While most shoppers still use credit cards for online purchases (66%), an increasing number of consumers prefer additional payment options, such as PayPal (25%), digital gift cards (22%), and even cryptocurrency (3%).
- Localize every aspect of your website. Displaying the appropriate currency, taxes, and duties during checkout is essential, but localizing product pages, shipping, return policies, and other content is also necessary. Local product reviews are important to approximately 70% of cross-border shoppers, scarcely any change from 2019.
- Focus on digital customer service. In addition to being the preferred marketing channel for Canadian consumers, email is also how 72% prefer to interact with customer service. Live chat and text message placed second at 58%, just above toll-free numbers (50%). Overall numbers declined since 2019 in all segments, perhaps due to the availability of increased self-service help options.
Canada offers a lucrative space for expansion for those looking to reach new global markets as long as cross-border barriers are addressed strategically. Read the full report here.
Simplify cross-border shipping logistics with Flow. Contact us now to learn about low-cost, hubless shipping options for Canada.