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Despite a digitally engaged population and high levels of device ownership and internet access, Canadian consumers continue to spend significantly less on average through digital channels than US consumers. Nevertheless, retailers in Canada are working to grow their own online sales, while also proactively preparing their stores and strategies for a scenario like the one playing out in the US, in which many companies have struggled to adapt quickly enough. I had the opportunity to attend eTail Canada in Toronto from 16-18 May, where Canada’s leading retailers gathered to discuss challenges and opportunities in e-commerce.
One challenge raised by a number of attendees and speakers was the difficulty of obtaining sufficient company buy-in for digital initiatives. While the importance of e-commerce has been established, many speakers touched on strategies for building internal momentum to justify devoting more employees and budget to the digital part of the business. Johnny Russo, AVP, digital marketing & eCommerce of Mark’s presented one such case: through a digital partner summit and digital 101’s (internal training sessions on digital topics), Mark’s was able to grow internal awareness, confidence and resources for digital marketing, leading to a better understanding of the motivations of online visitors.
Another popular topic at eTail related to building digital capabilities was the difficulty of working with legacy technologies and systems as organisations seek to develop increasingly sophisticated digital strategies. Indochino presented one such sophisticated strategy: since Indochino is a relatively new company and was originally online-only, Indochino was able to have elegant segmentation and information management from the beginning. Most established brick-and-mortar players, like Toys ‘R Us, are working to gradually update these systems. Sears Canada provides a unique counter example. According to Sears Canada CEO, Sears has aggressively replaced its legacy systems from the ground up to suit the retailer’s new outlook as a “digitally native brand”. Sears faces additional challenges independent of technology and it remains to be seen how effective its new overall strategy will be, but it’s aggressive digital push reflects an increasingly tech-dependent Canadian retail landscape.
The need for more sophisticated digital strategies is driven by the fact that consumer expectations have been influenced by technological change. This presents challenges for both retailers and manufacturers, leading some speakers to call for greater collaboration between the two parties. As highlighted by Build Direct, marketplaces are now a key part of e-commerce. Marketplaces are able to gather much more data about consumer shopping habits than brick-and-mortar stores can, giving marketplaces a potentially powerful role in helping product brands succeed. According to Joseph Thompson, VP marketing and growth at Build Direct, brands should endeavour to partner with marketplaces that are open to sharing this kind of data.
Speakers from Kimberly Clark took this idea a step further, suggesting that an exchange of ideas between retailers and brands is key for mutual success. Retailers and marketplaces have better insight into the transaction that brands can use to their advantage, but brands often have detailed information about their consumers and their motivations. This insight from brands can help retailers provide a better experience for customers. Some retailers are unwilling to share insights from their side, but this creates an opportunity for retailers that are willing to help their brand partners.
A third hot topic at eTail was about strategies for Canadian retailers using e-commerce as a tool to reach international consumers. The question of when and to what extent to localise websites and social media pages was debated in several panel discussions, with Audrey Gauthier, marketing director at Genesco, pointing out that many Canadian retailers even fail to sufficiently localise their content in Quebec. The necessity of obtaining local insight about shopping and payment habits was another key theme. Overstock.com vice president Ali El Husseini raised this point when discussing differences between US and Canadian consumers, as well as in discussing how a company must be prepared to offer services expected by international consumers (such as cash on delivery in Scandinavia).
According to Euromonitor International, e-commerce sales are expected to continue to grow at a double digit rate in Canada in 2017 as retailers increasingly work to meet consumer demands for this channel. Companies that adequately build institutional buy-in, work with their partners to align objectives and share insights and think proactively about a global footprint will be best positioned to benefit from the ongoing technological shifts.