The tough retail market in the U.S. and the stronger growth in the Canadian retail market are key reasons for the recent cross-border migration of U.S. retailers to Canada. Victoria’s Secret and Bath and Body Works are among the newest entrants in the Canada retail space, while Target, J.Crew, Lord & Taylor and many others have announced future plans to enter the Canadian retail market.
For U.S. retailers, entry to the Canadian market has been slow. This deliberate pace is due mainly to the fact that the landed business is associated with high risk.
For retailers who would rather wet a toe than take the big plunge, the Web is a great tool for testing the Canadian market. Unfortunately, U.S. retailers have been shy to employ the Web in their cross-border strategy. Not only does the Web carry fewer risks, it is also quicker and easier to implement than a brick-and-mortar presence. Victoria’s Secret, which has already opened a few stores in Canada, has yet to create a dedicated Canadian site, thereby subjecting its Canadian customers to the vagaries of shopping online with an out-of-country site.
A review of some top 50 apparel, footwear and accessories sites in the U.S. reveals that a majority of U.S. retailers do currently ship to Canada either through an in-house solution or a third-party solution such as FiftyOne and iShopUSA. However, only a few have dedicated Canadian sites.
Even these dedicated sites are not fully optimized to serve Canadian shoppers. For example, Lands’ End displays prices in U.S. dollars. Zappos charges $10 flat shipping across Canada, whereas ALDO only charges $5. To be seriously considered as an online shopping destination for Canadians, U.S. retailers need to work on the following areas:
- Safety and Security – The biggest concern for Canadians shopping online is their concern for privacy and the security of their personal information. Retailers need to address these concerns and assure customers of their sites' safety and security features.
- English – Not that Canadian English is that much different from U.S. English, but there are differences that need to be addressed in selling online. For example, "color" is "colour" in Canada and "ZIP" is "Postal Code" in Canada. These small details make shoppers feel like they're shopping at home rather than traveling abroad.
- French – French is the second national language in Canada and the primary language in the province of Quebec. If you have a physical presence in the province of Quebec, the law requires your Web site to be accessible to French-speakers in their own language.
- Canadian currency – Even though the two currencies are almost at par recently, do not confuse the shoppers with the $ sign. Clearly state if the $ is U.S or Canadian currency. Ideally, display prices in Canadian dollars and save your customers from having to calculate conversion rates while they shopping.
- Shipping - Canada Post and Purolator are the two key shippers in Canada. Include these shippers among choice of shipping method.
- Shipping charges – Be sure to stay competitive with the shipping fees charged by the major Canadian retailers. ALDO, as mentioned above, charges a $5 flat rate across Canada.
- Duties – Simplify the duties collection process. Calculate and collect at time of purchase rather than surprise the customer when the order arrives.
- Taxes – Be able to calculate and collect taxes for each province.
- Payment – You are not in the game if you do not accept MasterCard and debit cards among your payment options. These are among the popular payment methods in Canada.
- Return and exchanges – Do not expect customers to ship goods back to the U.S. for returns. It is crucial to either direct customer to make returns through your retail locations in Canada or to ship to a consolidated return center within Canada.
The Canadian market is an exciting one for U.S. retailers looking to expand outside of their home market. Even though the Canadian shoppers are different in many ways, they are also the most similar to the U.S consumer, globally speaking. But why are U.S. retailers so slow to approach Canada via the online channel? What do you think it is? Please share your thoughts by leaving a comment.