Canada has become a magnet for U.S. retailers, lured by the untapped potential in emerging Canadian markets, higher retail productivity rates, an underserved consumer base with an affinity for American brands and low levels of online shopping – discussed in more detail in Opportunities and Challenges Ahead for U.S. Retailers Moving Into Canada.
However, while the Great White North is an appealing step toward international expansion, U.S. retailers must understand the nuances between Canadian and American shoppers to successfully cross the border.
Only once there is a solid awareness of the buying habits of Canadian consumers, can U.S. retailers adapt their merchandising, marketing and store operations programs to achieve maximum effectiveness and efficiency.
How are Canadian shoppers different?
Canadian consumers don’t think and shop in the same ways as their American counterparts. Highlighted below are several critical differentiators.
Seeking Out Value: the global economic crisis didn’t have as much of a crippling effect on Canadian consumers as it did on American consumers – with 64% of Canadians saying they have enough money for the “basics and more,” contrasted with only 55% of Americans.
While 72% of both American and Canadian shoppers want the lowest prices on the items they buy, only 55% of Canadians use coupons, versus 68% of Americans.
That’s not to imply that Canadian shoppers aren’t searching for the best deal; they just have a different way of finding values.
For instance, a higher percentage of Canadian shoppers report shopping at dollar stores and deep-discount grocery stores.
Divided Shopping Preferences: Canadians are ranked first in the world for heaviest internet usage – spending about 45 hours online per month, compared to 39 hours a month for Americans.
Despite the high rate of internet usage, Canadian consumers aren’t embracing online shopping the way Americans have as e-commerce only represents about 1% of total retail sales in Canada, as opposed to 8% of American retail sales.
What’s interesting, however, is that 70% of Canadians research products before buying them, yet 22% of Canadians claim to never buy anything online (only 12% of Americans claim the same thing).
Further proof of traditional retail’s importance is found in the fact that 80% of Canadian shoppers prefer to shop in-store, versus 52% of Americans.
Finding your way in the dark
It’s important to note that while these are important differences between Canadian and American consumers, it’s not comprehensive. Moreover, Canadian consumer behaviors vary based on region – just as consumers in Miami differ from those in Seattle.
So while the Canadian market might be new territory, let us define the “who, where, value” of your customers and 2014 Canadian expansion strategy.