Over the last few years, the Canadian retail landscape changed forever, says Eric Morris, Managing Director of Google’s Retail practice in Canada, leading sales, operations, research, strategy and analytics.
E-commerce surged during lockdowns and peak COVID periods and while the pandemic has subsided e-commerce is well above historical rates in Canada, said Morris.
“It’s 14 per cent of all retail sales. That’s double where we were just a few years ago,” he said. “That shift towards e-commerce has been very durable.
“Canada’s e-commerce moment is now. We said that in 2020 and that was true through 2022. E-commerce and retail in Canada has changed forever. Related to that, the broader digital transformation isn’t just an e-commerce story only.”
Morris was one of the guest speakers at the recent RCC STORE Conference put on by the Retail Council of Canada.
He said a large number of people are coming online to research products in stores whether they buy it online or in-store. That’s a transformation from where the industry was a few years ago.
“Canadians are increasingly turning to digital channels to discover brands and products whether they want to buy it online or in-store,” said Morris.
People are tending to search online now before going to a store. This is not only browsing for products but also to see if the products they want to buy are available in the store that they choose. This trend has accelerated during COVID and is one of those “durable changes” in the retail landscape, added Morris.
He also said video is playing an increasingly more important role and about 70 per cent of shoppers in Canada purchase from a brand after watching a video on YouTube.
“What’s interesting here is shopping online used to be something that was very sort of methodical and functional. Increasingly with video, whether it’s with YouTube or elsewhere, shopping has become more immersive, more engaging, more fun due to more content from brands and stores and creators,” he said.
“We live in a world where people want choice. They want choice in brands, choice in stores, choice in whether to buy something online or in-store. Choice to work from home or to work from an office. So we want more choice than ever. I think digital gives us those choices and I think it’s incumbent on successful retailers to give consumers as much choice as possible – what they buy and how they buy it, whether it’s online or in-store. Those are the attributes of the most successful retailers that we work with.
“Canadians are returning to stores and stores have reopened. Sometimes a store is more convenient whereas with e-commerce I can get something delivered to my house in a day or two. A store let’s me get something right now. I think that’s really important. Related to that, we want those store visits, those trips to stores, to be efficient and purposeful. If we’re going to a store, we want to make sure the item we want to buy is in stock. That is a new habit that has been formed, Canadians going online to see if the product is actually available in-store.”
Those are the broad trends retailers are experiencing these days heading into the holiday season. And that holiday season is a long one beginning with the back to school sales that can start in August right through to Boxing Day and Boxing Week.
“I liken holiday shopping to this. It’s a marathon and not a sprint,” said Morris. “It’s no longer just about a peak day, Boxing Day or Black Friday or Cyber Monday or Cyber Week. It’s a holiday shopping season.
“And the retailers we see driving the most success are the ones who start early. They lean into early holiday shopping intent. They rise to the occasion on those peak moments, that being Cyber Week, and they continue to push hard to capture last-minute shoppers and last-minute gifts. It’s about doing all three of those well. I think the retailers that do that, they win the holiday shopping moment, they win sales and they win share.
“It varies by category. People shop differently for clothing than they do for toys, than they do for appliances. So we really encourage retailers to understand the products they sell, when do people start shopping, when does it start to increase, when does it peak.”
Morris said it is also important that retailers focus on their best customers. Retailers need to win new customers. Critical to the success of every retailer and brand is to introduce new customers.
“We’ve observed really from the start of COVID, and it’s continued to this day, 40 per cent of Canadians have recently shopped for a new brand or at a new store,” he said. “We’re increasingly discovering new places to buy things. And so we encourage retailers to have a new customer acquisition strategy to build sort of future customers and future high value customers. It starts with acquiring new shoppers.
“That’s one element. The second would be to focus on your best customers. Every retailer knows that some customers are more valuable to them than others. They shop more frequently or they spend more and we encourage those retailers to have a different customer experience, experience online, in-store, different emails, different marketing, different offers to cater to your best and most valuable customers.”
He said retailers have to increasingly think about online and in-store together. No one knows what the fall will bring. If there will be another variant or if COVID turns again and what that dynamic would look like between stores and e-commerce.
“So we really do encourage retailers to think customer centric and not channel centric,” said Morris. “And have a strategy that optimizes for total sales whether they occur online or in-store.”
