Debunking online shopping myths

A growing number of Canadians are using PCs, smartphones and tablets to shop, but that isn't killing off traditional ways retailers do business, says a global survey that scrutinizes 10 myths examining the multiple ways a company sells its goods.

In a survey released on Monday, consultancy and accounting firm PwC refuted beliefs such as the notion social media alone will become indispensable when shopping, online shopping will cannibalize sales in other channels and the tablet will take over the PC as the preferred online shopping tool.

"The message around social networking is you need to understand the role that it plays in the purchase journey. It plays a very strong role in the research, referral and customer service aspects," said Robert Scott, PwC’s national consumer, industrial products and services leader.

Cross-border competition

Finding ways to capture consumers' dollars through online and in-store strategies has become a hot topic as Canada faces increasing pressure from U.S. competitors setting up shop north of the border, many of which have strong so-called multi-channel strategies such as Target Corp, which plans to launch 124 stores in Canada this year.

Multi-channel retailing essentially refers to the merging of retail operations such as physical stories, online and mobile stores.

As well, the strength of the Canadian dollar has forced many domestic retailers to ramp up marketing and branding strategies to keep shoppers from heading to America as highlighted by the Black Friday and Cyber Monday shopping craze.

"It's very important for retailers to provide multiple ways for customers to both shop, research and transact because although we're seeing growth in online, the in-store store sales continues to be a strong piece of it," said Scott.

By the numbers

The survey showed 42 per cent of Canadians use social media such as Facebook and Twitter at least once a day, while an additional 17 per cent use these channels once a week, but only 7 per cent of these consumers are using social platforms to shop.

Furthermore, even though 75 per cent of Canadians are shopping online, tablets aren’t yet at the point of replacing the PC as the preferred online shopping device. Just 14 per cent of Canadians who shop online say they make purchases on a tablet at least once a month, which is well below the 56 per cent who indicate that they use their PC to shop.

In fact, when Canadian consumers shop both online and in-store, more than half spend more at their favourite retailer than they would through a single-channel such as in-store only. Furthermore, nearly a third increase their spending by at least 10 per cent, PwC says in its 44-page report.

Brand is big

Another key finding is the growing allure of brands, which could overtake retailers as the preferred place to purchase, PwC says.

Some 39 per cent of Canadian shoppers are shopping at brand sites, but the trend globally is shifting more quickly. More than half of consumers in both China (56 per cent) and the U.S. (52 per cent) are going to the brand directly.

Only three Canadian companies -- Chapters Indigo, Canadian Tire and The Bay -- rank amongst the top ten favourite multi-channel retailers for consumers. Top U.S. brands in Canada include Best Buy, Wal-Mart and Apple.

"That is another threat for Canadian retailers. Not only are they competing with well-funded retailers, increasingly; they are competing with their suppliers, the manufacturers," said Scott.

More than 11,000 individuals participated in the online survey in July and August 2012, including 1,333 in Canada. Results are considered accurate within 3.1 percentage points, 19 times out of 20.