The average Canadian household spends about $2,748 each year on online shopping, according to a new study.
Released by Environics Analytics and consultancy firm J.C. Williams Group, the study looked at how much Canadian families spend online province-by-province — and what they are most likely to buy.
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Researchers crunched numbers from a variety of different sources, including J.C. Williams Group’s semi-annual Canadian E-tail Report and information from Statistics Canada, to land on these estimates.
The numbers are intended to help retailers analyze the shopping habits of Canadians, but they provide some interesting insight for consumers as well.
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The study shows that the average B.C. household spends $3,368 on online shopping each year — that’s more than any other province. The second-highest spending province is Alberta, where households spend $2,996.
Here’s a full breakdown of how much Canadians spend annually online:
But what’s even more telling are the differences between what Canadians are most likely to spend their money on.
The report highlights that, for example, Ontario households are more likely to spend money on apparel online.
On the other hand, Quebecers are less likely to buy apparel, but more likely to buy groceries online.
Peter Miron, senior vice-president of research and development at Environics Analytics, explained to Global News that the differences between what people in different provinces buy online can be due to several factors.
“Across Canada, every single household purchases things online, every neighbourhood type, every region, tends to purchase a similar amount online. But what is fascinating is the variation between them,” he said.
Rural vs. urban
One of the biggest factors, Miron said, is the difference between urban and rural regions.
“We also know that B.C. households generally seem to prefer buying things online,” he said, noting the province has a relatively dense urban population.
“It’s not a big surprise that we do see that Vancouver tends to be a little bit more trendsetting when it comes to technology relative to the rest of Canada.”
More rural provinces, like Manitoba or Saskatchewan for example, spend less online.
“It’s rural, so free shipping is hard to come by. They are consuming less online, but they tend to consume more online for certain categories,” Miron explained.
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The study looked at purchases made across several categories, including beauty products, recreation, apparel, and food and groceries.
“For example, if you are purchasing high-end footwear online, chances you are living in a rural area where they don’t have shoe sizes and styles available. Or you are very convenience-based, relatively urban and apt.”
Other factors that impact shopping habits
Type of living space is another factor, Morin said.
He explained that individuals living in smaller condo spaces, for example, won’t be able to buy the same things as those living in larger homes.
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Areas with older populations, for example, Atlantic Canada, may also be shopping online less.
“Part of it has to do with how technologically enthusiastic the households are, so where we see younger households shopping, they tend to purchase more online,” he said.
Grocery shopping online
“Food and grocery shopping [online] really has taken to certain markets more than others, and I think it really has more to do with supply and demand,” Miron said.
He explained that rural and urban differences play up again here, with urban infrastructures allowing for more easy access to grocery deliveries.
“In the case of Saskatchewan and Manitoba, my suspicion is that it’s due to a lack of a strong online grocery presence,” he said, rather than a lack of demand.
That’s why the study notes that there is a “real opportunity” for online grocery sales in parts of Canada. Canadians are estimated to spend $6.4 billion this year on online groceries.
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“Groceries will be a category to watch, as grocery retailers are starting to make a more aggressive push into the online channel,” the study notes. “This category could easily eclipse clothing if Canadian households respond to the increased offerings of online groceries.”
Future of online shopping in Canada
Peter Hughes, a digital services expert at KPMG Canada, explained to Global News that it’s not a surprise there are different shopping patterns throughout a country as vast as Canada.
“The habits and trends across the country are different because they are in line with the mosaic of our country,” he said.
“There are different cultural compositions and different weather patterns, which will dictate some of the buying behaviours.”
Hughes noted that Canadian retailers and shoppers are less likely to use the web to buy products than many other countries.
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He pointed to research done by the consulting company, which found that 15 per cent of Canadians would rather shop online than in store. That’s compared to 43 per cent of consumers in China who said they would rather shop online.
Hughes said that’s why factors like Canada’s growing immigration numbers will change how Canadian consumers shop.
“Their habits are online shopping [and] mobile shopping, and so I think that’s going to force Canadian retailers to up their game and accelerate pace,” he said.
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If Canadians retailers aren’t able to meet higher demands for online shopping as it rises, Hughes said shoppers will simply turn elsewhere.
“Hopefully… they can increase their investments in online and gain traction so that when the wave of demographics are at the levels of China, India and other European countries, they survive long enough to be the retailer of choice,” Hughes said.
“The alternative is that Amazon, Alibaba and others are the go-to, and I know that’s not the ideal outcome for Canadian retailers.”
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