Canadian shoppers will spend C$22.3 billion ($19.8 billion) with online retailers this year, and that spending will grow at a compound annual growth rate of 12.3% through 2019, when Canadians will spend about C$39.9 billion ($35.4 billion) on the web, according to a new forecast from Forrester Research Inc.
The 2014 spending will account for 6% of total retail spending in the country, excluding sales or goods not commonly purchased or not available for purchase online, such as cars, prescription drugs, gasoline and sales at restaurants and bars. In 2019, online sales will account for 10% of retail spending. That compares to the roughly 9% share web commerce has in the United States today and the 11% expected in 2019, according to Forrester estimates.
The report, “Canadian Online Retail Forecast, 2014 to 2019,” cites greater online spending , lower shipping costs and a greater assortment of products available for sale online for spurring the growth in e-retailing in Canada. Canadians who shop online, author Peter Sheldon writes in the report, currently spend C$1,210 ($1,074) online annually. That’s expected to reach C$1,860 ($1,652) in 2019. Further, the proportion of Canadians who shop on the web will also increase from 59.7% to 63.9% in 2019.
E-retailers and shipping carriers operating in Canada are also working to lower the cost of shipping goods across the large country. Sheldon also cites the greater assortment of products available to Canadian shoppers, noting Amazon.ca and Walmart.ca’s expanded assortments. According to a Forrester survey, 45% of Canadian online adults say they’ve made a purchase from Amazon in the last three months, and 11% have made an online purchase from Wal-Mart’s site.
Amazon and Wal-Mart are U.S.-based companies, but native Canadian retailers are also working to get better at e-commerce. Mass merchant Canadian Tire Corp., for example, quit e-commerce in 2009, but tentatively returned to the online waters again in 2011. A year ago, the company had about 10,000 products consumers could purchase online and pick up in store. Last week, the company said it will make an average capital investment of C$575 million ($510 million) annually from 2015 to 2017, a portion of that going to “significant new investments in digital technology.” Michael Medline, Canadian Tire’s president, who will take over as CEO in December, led the recent digital push and has said publicly that e-commerce is a priority . According to the Forrester survey, 6% of Canadian consumers have made an online purchase at Canadian Tire in the past three months.