E-com wars: U.S. frenemies?

Canadian online sales have seen double-digit growth over the past five years. But a recent study by J.C. Williams revealed that Canuck retailers are two to four years behind their American counterparts when it comes to growing their e-biz, leading many Canadians to order from south of the border. What's the plan?

Canadian online sales have seen double-digit growth over the past five years. But a recent study by J.C. Williams revealed that Canuck retailers are two to four years behind their American counterparts when it comes to growing their e-biz, leading many Canadians to order from south of the border. What’s the plan?

We asked two prominent (and, yes, American) online marketing analysts – Jeffrey Grau, senior analyst at New York-based eMarketer, and Jim Sterne, founder of Wakefield, MA.-based Web Analytics Association – how Canadians can catch up.

With the high dollar, should Canadian online retailers be worried about U.S. companies coming up and taking market share?

Sterne: Yes. Because there’s no such thing as coming up there. It’s all online, so we’re competing against all geographies.

Grau: To be the devil’s advocate, I will say largely no. Having more U.S. online retailers selling to Canadians invigorates the market.

Sterne: So you’re saying that U.S. retailers taking Canadian dollars is increasing the likelihood that Canadians will buy from other Canadian websites?

Grau: Well, yes. With more retailers coming online, it gives consumers a larger selection. There’s more competition, but the pie is larger.

Sterne: But Canadian retailers are continuing to not get a fair share because their websites aren’t as sophisticated, they’re not doing as much analysis, they’re not taking advantage of online as well. The tide is lifting all boats, but the Canadian boats aren’t getting any better.

Is there a danger that Canadians could just get used to buying from U.S. retailers?

Sterne: Yeah. Every time you train a Canadian to buy from an American website, you’re making it more difficult for a Canadian website to break through the brand barrier.

Grau: Canadians have pride in buying from local retailers. Even if U.S. retailers are offering more products, a local retailer understands the local market better than a foreign retailer who does not have his or her eyes solely on the Canadian market.

What can Canadians do to catch up?

Grau: Canadians prefer to go to malls to purchase high-touch items like apparel. But there are things retailers can do. For instance, offering visualization tools like the ability to see a virtual model of what you might look like in a dress, or opportunities to chat with a sales assistant online. Also, this may be the year of online payment systems like PayPal and Google Check-out. The more payment options a retailer offers, the higher their conversion rate.

Are any Canadian retailers doing it well?

Grau: Sears Canada. They provide the types of visualization tools I mentioned, like a virtual model, zoom, 360-degree product views and colour swatches.

How important is multi-channel integration?

Sterne: There’s no such thing as a person who only buys over the phone, online or in-store. People cross those channels constantly. It’s tough for a company to wrap its mind around that, because we’ve siloed our operations.

Grau: It’s an analytical challenge, too. If you’re a multi-channel retailer looking at your e-commerce channel and saying, ‘We only made $300 million,’ you may be selling yourself short if you’re unable to measure store sales influenced by your website. It’s important to understand how customers use your channels.