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Canadian online retail experienced ‘monster’ 2013 holiday season: report

Maybe it was the bad weather that kept people indoors, or the fact that shoppers are getting lazy, but the holiday season was a “monster” for online Canadian retailers, a new report shows.

The inaugural Canadian E-Tail report from J.C. Williams Group calls the recent holiday shopping season a “breakthrough” for online shopping in Canada.

Two-thirds of Canadians online turned to e-commerce to buy gifts for themselves or family and friends, spending double than people who walked into bricks and mortar shops.

The report says online buyers spent an average of $746, compared to $382 for people who shopped offline.

“Whether they bought online or in other channels, the online shopper is one that every retailer should be actively courting,” stated J.C. Williams Group senior partner Maureen Atkinson.

“[The] report confirms what Canadian online retailers already know; that the holiday season 2013 was a monster for online retailers who serve Canadians.”

The report comes as retailers continue to battle for consumer dollars amid a rapidly changing landscape in Canada.

Target’s entrance into Canada, despite its stumbles early on, has ratcheted up competition for consumer dollars, leading Wal-Mart Canada to expand it presence and Amazon.ca to increase its online offerings. Retailers, from grocers to department stores, are also consolidating to better compete.

Customers on the winning side

The result has been good news for shoppers, as retailers offer discounts to lure their business. The Bank of Canada has even cited intense retail competition for helping to keep inflation low.

An increase in online shopping and more competition in the sector is also behind massive job cuts at retailers across Canada. For example, Best Buy Canada and Sears Canada have together announced about 1,500 job cuts so far this year alone.

More Canadians are also going online to shop, citing convenience and in some cases even better selection compared to what can be stocked in physical stores. Many online retailers also offer incentives for surfing and shopping, including special promotions and free shipping.

“Canadians have responded to these tools and offers by opening their wallets,” says Atkinson.

Statistics Canada said last fall that the value of orders placed online by Canadians reached $18.9 billion in 2012, up 24 per cent from 2010. It said 56 per cent of Internet users ordered goods or services online in 2012, up from 51 per cent in 2010.

The J.C. Williams report notes that about a third of online shopping activity is with retailers outside of Canada.

According to the survey, 62 per cent of online shoppers had made cross-border purchases, “suggesting that Canadian retailers face global competition,” the report states.

That activity could slow, especially for shoppers buying in the U.S., now that the Canadian dollar has depreciated against the American greenback. That makes cross border shopping more expensive, and less appealing.