The Future Outlook of Canadian Retail E-Commerce

Date:

Share post:

By Devin Partida

Canadian retailers have faced a period of unprecedented change amid the COVID-19 pandemic. Most notably, retail e-commerce exploded in early 2020 as lockdowns limited the availability of brick-and-mortar stores. Now, as the year nears its end, Canadian e-commerce has slowed but isn’t stopping.

In the early days of the pandemic, e-commerce seemed like an unstoppable force. Between February and May alone, online sales almost doubled while in-person shopping continued to fall. Since then, the market has started to rebalance as lockdown restrictions have eased.

E-Commerce Won’t Replace In-Person Retail

E-commerce’s share of total retail sales more than doubled between 2019 and early 2020. To some, this unprecedented rise indicated the beginning of an inevitable shift — online stores surpassing brick-and-mortar alternatives. As the nation has continued to get a better handle on the pandemic, that hasn’t been the case.

Since May, Canadian retail trade has grown, recovering from its slump in April. Overall retail sales are nearing pre-pandemic levels, and e-commerce has played a diminishing role in that recovery. While retail e-commerce sales are still higher than 2019 levels, they’ve declined since their May peak.

Now that in-store shopping is more accessible, consumers have switched back to it. It seems that customers still prefer brick-and-mortar stores, even if e-commerce is more widely available than before. The early surge in online sales was a matter of necessity rather than consumer preference.

Retail E-Commerce Will Keep Growing, But Slower

While retail e-commerce hasn’t reached the dizzying heights some expected, it will continue to grow. Canadian retailers are now keenly aware of the advantage that online channels present, especially in an emergency. Retailers will sustain their e-commerce sites, and customers, now accustomed to online shopping, will keep using them.

Experts predict online sales to keep growing each year but at a diminished rate. According to one survey, Canadian e-commerce sales growth will fall to 7.7% in 2021 and keep declining through 2024. The astronomical e-commerce growth of mid-2020 isn’t indicative of the industry’s future.

While e-commerce’s growth rate will eventually decline, it’ll stay positive for the foreseeable future. The COVID-19 pandemic has proved how helpful a resource online shopping is for both retailers and consumers. As time goes on, e-commerce will play an increasingly prominent role in Canadian retail, but it won’t skyrocket.

E-Commerce Itself Will Continue Evolving

As e-commerce continues to grow, it’s changing along with retail itself. Now that online stores have become an industry standard, it’s no longer enough to merely have an e-commerce site. Retailers must optimize their online channels to stay competitive, just as they do with brick-and-mortar stores.

While generic packaging is the standard now, 52% of online shoppers who receive branded packaging will become return customers. Retailers will likely shift toward custom features like branded packaging or unique website design. Online channels will start reflecting their brick-and-mortar counterparts as it becomes harder to stand out.

Similarly, mobile retail sales are also growing, so more retailers will likely optimize for mobile devices. In the future, e-commerce sites could also feature more varied payment options, even accepting cryptocurrency. Flexibility has been the primary benefit of e-commerce amid COVID-19, so e-retailers will pursue it in their online channels.

Despite Its Decline, Online Shopping Is Here to Stay

Canadian retail e-commerce will not replace brick-and-mortar stores and won’t come close anytime soon. The meteoric rise of online shopping Canada saw earlier this year won’t continue, but e-commerce will keep growing. Online retail is more prominent than ever, and it’s not going away.

E-commerce will continue to become a more crucial part of retail over the next few years. The pandemic has favoured retailers with a strong online presence, and the industry has learned from that experience. As e-commerce continues to grow and evolve, it will help sustain retail for years to come.

Devin Partida is a writer and blogger, as well as the Editor-in-Chief of ReHack.com

1 COMMENT

LEAVE A REPLY

Please enter your comment!
Please enter your name here

More From Retail Insider

West Edmonton Mall Continues to Expand Luxury Retail with Addition of Moncler; Tiffany Marks 10 Years

Italian luxury brand Moncler is the latest to join the massive shopping centre with retailers such as Louis Vuitton, Balenciaga and Gucci. The mall’s first luxury store, Tiffany & Co. is also marking 10 years. 

Canadian Consumers to Prioritize Brick-and-Mortar Retail into December [Report/Interview]

Electronics are among the top gifts, with moderate growth in the restaurant and grocery sectors expected while also noting a controlled promotional approach due to slowing inflation.

Salesforce’s Rob Garf Discusses Canadian Retailers’ Strategies Amidst Q3 E-commerce Slowdown [Report/Interview]

Garf discusses a report showing a 9% decline in Canadian e-commerce growth, indicating a consumer expectation for discounts in the upcoming months. He discusses a consumer shift and how retailers can address it.

Early Signs Point to a Strong Holiday Shopping Season in Canada Despite Economic Challenges

Reports indicate that last Saturday and Sunday saw the biggest surge in consumer spending so far, with predictions made as we head into December.

Specsavers Set to Reach 100 Canadian Locations in Early 2024, Expanding into New Markets [Interviews]

The eyewear retailer, which entered Canada in 2021, is rapidly expanding and looking to gain market share from established players.

Burton Snowboards Transforms Toronto Flagship for [ak] Collection as Brand Looks to Expand [Interview/Photos]

The high-performance AK collection is a new focus, with Burton planning to grow its retail presence in Canada with more stores in key markets.

Liz Rodbell Returns to Hudson’s Bay as President and CEO Following Sophia Hwang-Judiesch Departure 

Rodbell led Hudson’s Bay and Lord & Taylor from 2013 to 2017, and she returns at a challenging time for HBC. 

Upper Canada Mall in Newmarket Adding Tenants as Area Sees Rapid Population Growth [Interview]

The super regional centre, considered the leader north of Toronto, is adding new retailers and concepts to attract consumers.

Lullaboo Nursery and Childcare Centre Expanding into Non-Traditional Locations Including Shopping Centres [Interview]

The company's CEO says that finding space is a challenge for the childcare concept, which is seeing significant demand from parents.

Gucci Opens Impressive Main Floor ‘World Of’ Boutique Concession at Holt Renfrew Calgary [Photos]

The approximately 4,000 square foot space houses the Italian luxury brand’s full collection for women and men. 

Lina’s Market Opens 1st Food Hall in Calgary [Interview/Photos]

The innovative space combines a grocery store, café, and food hall with nine diverse stations, introducing a fresh dining experience and contributing to the growing trend of European-style market halls in Canada.

PwC Survey Shows Canadians Ready to Boost Holiday Spending Despite Economic Challenges [Interview]

Canadian consumers are gearing up for a resilient holiday season, with a survey revealing an increase in holiday spending compared to the previous year — that includes a notable resurgence in in-store shopping, particularly among Gen X and Gen Z.

Mastermind Toys: A Surprising Entry into Creditor Protection Suggests Omnichannel isn’t Enough Anymore [Op-Ed]

Mastermind Toys' recent entry into creditor protection underscores the changing dynamics of retail success, challenging the effectiveness of traditional strategies. An expert says the retailer needs to focus on transformative experiences.

Discretionary Spend Remains Low as Canadian Retail Sales Remain Consistent [JC Williams Group Analysis]

Monthly StatCan numbers indicate a range of category performance numbers for the Canadian retail industry which is seeing headwinds.

Food Industry in Canada to See Dynamic Changes with Innovation and Evolving Consumers [Op-Ed]

Sylvain Charlebois discusses the transformative landscape of the food and beverage industry, emphasizing key trends shaped by technology, evolving consumer preferences, and sustainability concerns.

New Canadians Need to be Welcomed into the Retail Workforce as Industry Shifts [Podcast]

Suzanne Sears highlights the challenges faced by new Canadians in the job market, emphasizing the need for retailers to recognize the large pool of highly educated, underemployed individuals in the Canadian workforce.

The Impact of Ontario’s Salary Disclosure Legislation on Retail [Podcast]

The conversation explores potential challenges for retailers, including concerns about exploiting pay bands to avoid transparency and the possibility of increased costs and necessary adjustments in compensation. The discussion also highlights the return of baby boomers to part-time retail positions.

Indigenous-Owned Streetwear Brand SECTION 35 Launches 1st Store, Eyes Expansion to Vancouver Flagship [Interview]

The space serves as a smaller-scale entry into retail, with plans to expand to a flagship store in Vancouver allowing the brand to directly engage with customers and showcase its full range of products, including collaborations with other brands.

What Drives People to Panic Buy During Times of Crisis: A New Study Sheds Light on the Psychology of Consumers [Op-Ed]

A study identified four distinct consumer groups based on psychological traits, each displaying unique purchasing habits influenced by factors like fear of embarrassment and fear of missing out. Understanding these consumer motivations can help retailers.

Price Reduction for 202 Queen St. W. Retail Building in Downtown Toronto 

The four-level commercial building, home to Ontario’s first legal cannabis store, is now priced at $1.6m less than its appraised value.

RECENT RETAIL INSIDER VIDEOS

Advertisment

Subscribe to the Newsletter

Subscribe

* indicates required

RECENT articles

West Edmonton Mall Continues to Expand Luxury Retail with Addition of Moncler; Tiffany Marks 10 Years

Italian luxury brand Moncler is the latest to join the massive shopping centre with retailers such as Louis Vuitton, Balenciaga and Gucci. The mall’s first luxury store, Tiffany & Co. is also marking 10 years. 

Canadian Consumers to Prioritize Brick-and-Mortar Retail into December [Report/Interview]

Electronics are among the top gifts, with moderate growth in the restaurant and grocery sectors expected while also noting a controlled promotional approach due to slowing inflation.

Salesforce’s Rob Garf Discusses Canadian Retailers’ Strategies Amidst Q3 E-commerce Slowdown [Report/Interview]

Garf discusses a report showing a 9% decline in Canadian e-commerce growth, indicating a consumer expectation for discounts in the upcoming months. He discusses a consumer shift and how retailers can address it.

Early Signs Point to a Strong Holiday Shopping Season in Canada Despite Economic Challenges

Reports indicate that last Saturday and Sunday saw the biggest surge in consumer spending so far, with predictions made as we head into December.

Specsavers Set to Reach 100 Canadian Locations in Early 2024, Expanding into New Markets [Interviews]

The eyewear retailer, which entered Canada in 2021, is rapidly expanding and looking to gain market share from established players.

Burton Snowboards Transforms Toronto Flagship for [ak] Collection as Brand Looks to Expand [Interview/Photos]

The high-performance AK collection is a new focus, with Burton planning to grow its retail presence in Canada with more stores in key markets.

Liz Rodbell Returns to Hudson’s Bay as President and CEO Following Sophia Hwang-Judiesch Departure 

Rodbell led Hudson’s Bay and Lord & Taylor from 2013 to 2017, and she returns at a challenging time for HBC. 

Upper Canada Mall in Newmarket Adding Tenants as Area Sees Rapid Population Growth [Interview]

The super regional centre, considered the leader north of Toronto, is adding new retailers and concepts to attract consumers.

Lullaboo Nursery and Childcare Centre Expanding into Non-Traditional Locations Including Shopping Centres [Interview]

The company's CEO says that finding space is a challenge for the childcare concept, which is seeing significant demand from parents.

Gucci Opens Impressive Main Floor ‘World Of’ Boutique Concession at Holt Renfrew Calgary [Photos]

The approximately 4,000 square foot space houses the Italian luxury brand’s full collection for women and men. 

Lina’s Market Opens 1st Food Hall in Calgary [Interview/Photos]

The innovative space combines a grocery store, café, and food hall with nine diverse stations, introducing a fresh dining experience and contributing to the growing trend of European-style market halls in Canada.

PwC Survey Shows Canadians Ready to Boost Holiday Spending Despite Economic Challenges [Interview]

Canadian consumers are gearing up for a resilient holiday season, with a survey revealing an increase in holiday spending compared to the previous year — that includes a notable resurgence in in-store shopping, particularly among Gen X and Gen Z.

Mastermind Toys: A Surprising Entry into Creditor Protection Suggests Omnichannel isn’t Enough Anymore [Op-Ed]

Mastermind Toys' recent entry into creditor protection underscores the changing dynamics of retail success, challenging the effectiveness of traditional strategies. An expert says the retailer needs to focus on transformative experiences.

Discretionary Spend Remains Low as Canadian Retail Sales Remain Consistent [JC Williams Group Analysis]

Monthly StatCan numbers indicate a range of category performance numbers for the Canadian retail industry which is seeing headwinds.

Food Industry in Canada to See Dynamic Changes with Innovation and Evolving Consumers [Op-Ed]

Sylvain Charlebois discusses the transformative landscape of the food and beverage industry, emphasizing key trends shaped by technology, evolving consumer preferences, and sustainability concerns.

New Canadians Need to be Welcomed into the Retail Workforce as Industry Shifts [Podcast]

Suzanne Sears highlights the challenges faced by new Canadians in the job market, emphasizing the need for retailers to recognize the large pool of highly educated, underemployed individuals in the Canadian workforce.

The Impact of Ontario’s Salary Disclosure Legislation on Retail [Podcast]

The conversation explores potential challenges for retailers, including concerns about exploiting pay bands to avoid transparency and the possibility of increased costs and necessary adjustments in compensation. The discussion also highlights the return of baby boomers to part-time retail positions.

Indigenous-Owned Streetwear Brand SECTION 35 Launches 1st Store, Eyes Expansion to Vancouver Flagship [Interview]

The space serves as a smaller-scale entry into retail, with plans to expand to a flagship store in Vancouver allowing the brand to directly engage with customers and showcase its full range of products, including collaborations with other brands.

What Drives People to Panic Buy During Times of Crisis: A New Study Sheds Light on the Psychology of Consumers [Op-Ed]

A study identified four distinct consumer groups based on psychological traits, each displaying unique purchasing habits influenced by factors like fear of embarrassment and fear of missing out. Understanding these consumer motivations can help retailers.

Price Reduction for 202 Queen St. W. Retail Building in Downtown Toronto 

The four-level commercial building, home to Ontario’s first legal cannabis store, is now priced at $1.6m less than its appraised value.