Canadian online retailers shooting themselves in the foot

We have all heard it before. Canadians don’t shop online as much as Americans. When they do, they mostly shop on American websites. In the end, this means less overall revenues for Canadian retailers online and offline. Canadian retailers are hurting, some are even shutting down. Jacob Boutiques are the latest casualty.
I have done most of my shopping for books, electronics, small appliances, kitchen gadgets, and clothing online for the past 5 years. I admit the majority of the online dollars I spend cross the border. The one exception is my clothes shopping. I do a large part of it at Simons, a Canadian retailer.
My reasons for shopping at American online retailers are similar to those of most Canadians (note to Canada Post study). They give me what I want. I want fast and free shipping, a simple pleasant shopping and checkout experience, all the info I need on the product I’m thinking of purchasing and its price. I also want the assurance that I can return any merchandise that is not up to my standards at no cost and with as little hassle as possible. Demanding you say? I agree. However since American retailers like Amazon satisfy almost every single one of my requirements, it is now the standard by which I judge all my online purchasing experiences.
In the table below, you can see how I rate my experiences with Amazon and 3 Canadian online retailers. The ratings are in the form of colours. Red is bad. Yellow is ok, and Green is good.

Table 1: My shopping experiences with Amazon, The Bay, Canadian Tire and Simons

	Amazon	The Bay	Canadian Tire	Simons
Free shipping	$75 buys me free shipping on almost any item. Otherwise the minimum order is $25 to get free shipping. My orders are usually above $25.Shipping information is on the purchasing page	I need a minimum order of $99 to get free shipping. Less than half of my orders would qualify for free shipping.Shipping policies are on the home page	Can’t find shipping fees anywhere before getting to checkout. Fees apply to any size order. Free in-store pickup mostly useless if you want to shop online.	$100 minimum order or free in-store pickup. About 75% of my orders qualify for free shipping. Shipping policy is on the home page.
Shopping experience	They invented 1 click shopping. Easy and pleasant. Search engine is accurate and categories make sense to me.	Product search engine is not very accurate. Category sub-menus are not v helpful. Overall site ergonomics are iffy. Checkout is horrible. Cart application shows both discounted prices on some items and regular price for others with discounts totalled at the end of invoice. Very confusing.	One of the most irritating online shopping experience one can have. You have to enter your postal code in order to check whether a product is in stock at the nearest store. The entire experience is geared to send you into the physical store. TProduct information incomplete or non existant. Static pictures.hey’re missing the point of ecommerce entirely.	Easy and pleasant. Beautiful design and photography. Checkout is fast and easy
Product information	Accurate search engine. Complete and well written product information. Multi-view pictures on most products.	Good product information. Good search engine.	Deficient produc information. Static pictures.	Very good product information with multi-view pictures.
Easy returns	Print your own return label that you get on Amazon and return in original box. Shipping charges are pre-paid by Amazon	Ship back, at your own cost, with receipt in original box. You can also return at the nearest store.	You can only return merchandise in store, with receipt, un-open packaging and proof of ID.	Return merchandise with pre-paid label and invoice copy enclosed in original shipment. You can also return in store

Source: Baker Marketing 2014

The Achilles’ tendon of etailers in Canada is shipping costs. They are almost 4 times higher than in the States. Brick and mortar retailers, who offer online shopping, are still reticent to absorb their online shipping costs in the rest of their business. These shipping costs represent the major reason Canadian shoppers prefer American online retailers but certainly not the only one. The Bay and Canadian Tire online stores are representative of a majority of online shopping experiences with Canadian etailers. Thankfully, there are some very good Canadian etailers such as Simons. The difference is that Simons fully invested itself, from the beginning, into online distribution. Despite being historical institutions in Canada, The Bay and Canadian Tire are relatively newcomers in etailing. Aside from a disastrous attempt from 2000 till 2009 Canadian Tire only reopened its online store, in pilot mode, in November 2013 and is only now rolling it out. The Bay has been online with its full catalog for less than a year.
Canadian online shoppers pay higher shipping fees, often have to deal with subpar shopping experiences and incur extra costs if they need to return products when shopping at Canadian etailers. Their best alternative is to shop on American online store. This option can entail customs fees if the American etailer doesn’t have a warehouse in Canada. Not surprisingly, customs fees is one of the most cited reason preventing Canadians, who are not yet shopping online from doing so.
Canadian retailers are shooting themselves in the foot by not fully investing themselves into online selling. Not only are they losing sales to American etailers, they are also discouraging some Canadians from shopping online altogether.
Note: Part of the data this post is based on can be found in the 2013 Canada Post Online Shoppers and buyers White Paper

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