Category Research: Retail Trends
Some current trends in the retail industry in Canada include multichannel (omnichannel) sales, the use of credit cards as the primary payment methods, the use of e-wallets, and the use of debit cards. Another trend relates to the most significant season of e-commerce occurring at the "end of the year." Some popular e-commerce platforms include Amazon Canada, eBay Canada, Walmart Canada, among other e-commerce platforms.
Multichannel (Omnichannel) Sales
- One of the retail trends in Canadian e-commerce, as published by the Retail Insider, is the use of multichannel or omnichannel sales channels.
- Omnichannel in marketing refers to the provision of seamless customer experience on all channels. These channels include online marketing channels such as social media, e-commerce websites, mobile advertising, and other channels.
- Most retailers in Canada are adopting omnichannel or multichannel retail. There is a shift from "traditional linear purchase" models, which are being replaced by the circular model, which puts loyalty loops at the core of a customer's journey.
- One of the factors driving the rise of omnichannel is that retailers have realized the benefit or value of integrating other channels such as social media to their e-commerce platforms. Social media presents retailers a vital medium used to engage, interact as well as influence customers.
- Some retailers in Canada taking advantage of the benefits that come with omnichannel engagement include Montreal-based David's Tea, Lululemon, and Mountain Equipment Co-Op., (MEC).
- Canadian Fashion retailer known as Frank and Oak has recorded key to success in omnichannel retail.
The Use of Credit Card Payment Methods
- A list of contemporary e-commerce trends published by the Retail Insider reveals that the primary payment method for e-commerce across Canada is credit cards.
- Credit cards are thin rectangular slabs of plastic usually issued by financial companies. A credit card allows its holders to borrow funds used to pay for goods as well as services. Credit cards stipulate the condition that cardholders will pay back any borrowed money, along with interests, and any other agreed-upon charges.
- Credit cards are among the most utilized point-of-sale (POS) payment methods used in Canada by volume and accounted for a transaction value that exceeded all other "POS methods combined" as of 2018.
- The use of credit card payment methods is soaring across Canada. Canadians have a "love affair" with their favorite plastic card (credit cards) not only because they are "helpful and convenient" financial gadgets, but also because they "make everyday purchases easy."
- One of the retail services providers in Canada known to have taken advantage of the trending love Canadians have for credit card payments is Shopify Canada. Shopify Canada has its payment features that support credit card processing.
- With its headquarters in Ottawa, Canada, Shopify currently empowers over 800,000 businesses and recently launched new retail hardware for the transformation of in-store shopping.
The Use of E-wallets
- One retail trend in Canadian e-commerce, as published by the Retail Insider, is the use of e-wallets for payments.
- One reason e-wallets have become so popular relates to the enhanced security features of e-wallets. Unlike with credit cards, encryption, as well as other digital protection capabilities of e-wallets, keep user information safe and eliminates threats of frequent victimization by hackers.
- Another reason for the spread of e-wallets is that they are less time-consuming than other payment methods, which require completing forms or filing paperwork for banks. Although e-wallets verify a person's identity, they require less information.
- One retail service provider in Canada that has is embracing the use of e-wallets is Amazon Canada. Amazon Canada allows consumers to add e-wallets to their profile and use them for payment.
The Use of Debit Cards
- One retail trend in Canadian e-commerce, as published by the Retail Insider, is the use of debit cards for payments.
- A recent survey among Canadians reveals that about 79% of Canadians opt to pay for purchases with a debit or credit card instead of using cash.
- One reason people opt for or choose to own debit cards in Canada relates to the fact that it prevents debt conscious consumers from going into debts. Payments done with a debit card are deducted directly from the owner's "bank account," and any attempted transaction that is greater than the account balance of the linked account will be declined. Consequently, in such cases, the owner of a debit card won't get a bill (for attempting to spend beyond his/her account balance since the card would not allow its owner to borrow), and there would be no need to pay interests.
- One retail service provider in Canada that has is embracing the use of debit cards is Amazon Canada. Amazon Canada accepts payments via debit cards.
Significant End of Year Sales
- Another trend in Canadian e-commerce relates to the most significant season of sales via e-commerce, which occurs at the "end of the year."
- The hottest or most significant season for retail e-commerce in Canada is by the end of every year.
- One of the seasons with the highest average retail sales by amount occur close to events like Christmas, Black Friday as well as Cyber Monday (periods within the last quarter of the year). However, some significant sales occur around other holidays like the back-to-school or end of school holidays in August, among other holidays.
- Holiday seasons are often the busiest times of the year for operators within the retail sector. Holiday seasons often experience a surge in sales, which typically commences on Black Friday, a day that follows United States Thanksgiving. Although it is an American shopping tradition, yearly Black Friday sales are increasingly becoming popular across Canada in recent times as consumers get eager to bargain.
- Consumers across Canada use various channels to purchase discounted goods on Black Friday, with 55% of consumers utilizing Canadian websites for their purchases.
- Walmart Canada is already preparing for 2020 end of year sales. Walmart has a message to Canadians on its website, revealing that it is a destination for their great Black Friday deals. Canadians can start the holiday season by finding perfect gifts for their loved ones or themselves at great prices on Walmart as the company promises a holiday shopping experience that is exceptional.
Amazon Canada, eBay Canada, Walmart Canada, and Local Competitor E-commerce Platforms
- Some retail platforms trending in Canada include Amazon Canada, eBay Canada, Walmart Canada, Best Buy Canada, Canadian Tire, Costco Canada, Home Depot Canada, Etsy Canada, Hudson's Bay, and Newegg Canada, among other platforms.
- An e-commerce platform refers to a software application that enables online businesses to operate websites, engage in marketing, retail sales, as well as operations. Some top ten Canadian e-commerce retail sites for 2020 include international brands like Amazon Canada, and Walmart Canada, some locally owned e-commerce platforms like Kijiji, Canadian Tire, among other purely local businesses founded in Canada are making waves as "local success" stories.
- E-commerce platforms are becoming increasingly popular in Canada because more Canadians have continued to embrace alternatives to brick-and-mortar stores.
- About 62% of Canadian retailers agree that the sales volume of their online sales, as well as conversion rates, have improved since 2016. Based on projected values, Canadians spent more than $39 billion, making online purchases in 2019.
- Some "local" e-commerce startups have established a foothold and have taken advantage of competing with Amazon, eBay, and the likes of Walmart in the online retail space in Canada. Such startups include Frank And Oak, Endy, Article, Mejuri, and Inkbox.
The study investigates current trends in the retail industry in Canada. The study includes trends specific to Canada published by resources like Retail Insider, Sales Cycle, and credible blogs like VoPay, among other resources. VoPay is a leading payment innovation company that offers payment services with speed as well as transparency. Retail Insider published several trends in e-commerce, stating that the primary payment method used by Canadians is "credit cards." Another trend reveals that "e-wallets and debit cards" come second as a choice of e-commerce payment for Canadians. Debit cards differ from credit cards because they need to be loaded with funds before use. Credit cards, on the other hand, allow consumers to buy with credit from their financial organizations and pay later with interest.
The study considers recent trends in the retail industry in Canada published by credible resources, impacting the Canadian retail sector and implemented by or affecting significant players in the Canadian retail segment as worthy of inclusion. A limited number of resources have published trends specific to the retail industry in Canada for 2020. Consequently, the study includes trends published slightly before 2020 and expected to continue up to 2020 and beyond. Some companies with international presence such as Walmart (Walmart Canada), Amazon (Amazon Canada), among other brands, are in the study because they control a significant portion of Canada's retail e-commerce. The study considers trends reported by the Retail Insider to be current because the Retail Insider's report is less than a year old and predicts that Canadian e-commerce will continue to experience growth up to the year 2023 based on the analyzed trends.