One Third of Canadians' Online Shopping Happens on U.S. Sites

2/5/2015
U.S. retailers seeking to grow business with online shoppers across country borders should look to Canada, according to a recent report from Borderfree, a provider of international cross-border ecommerce solutions.

The report, part of Borderfree's series of intelligence pieces on high-interest markets for ecommerce, points to Canada as a top market for retailers to tap into due to Canadians' frequent tourism to the U.S. and familiarity with U.S. stores, brands and shopping experiences. More than 23 million Canadians visit the U.S. each year, driving demand for U.S. goods, inexpensive shipping and relatively low import duties when they return home. Canada is the largest cross-border online market for U.S. retailers today presenting a healthy opportunity for international expansion, and was Borderfree's number-one market for cross-border sales from U.S. retailers in 2013.

"Canadians know U.S. brands well and shop them frequently," said Michael DeSimone, CEO, Borderfree. "Between the country's high Internet, mobile and social media penetration and an affluent population ready to spend, U.S. retailers looking to sell online to our neighbors to the north will find a ripe ecommerce marketplace. We've also found that targeted marketing efforts in Canada reap big rewards, as evidenced by the most the recent holiday shopping season, where U.S. retailers saw significant online demand from Canadian shoppers."

During the holiday season, Borderfree data showed that Canadian shoppers spent on average 34 percent more daily than they did during a typical shopping day during the rest of the year, with a fivefold increase on Black Friday. Other peak shopping days included Cyber Monday and Boxing Day with women's clothing, luxury goods and home goods selling as the top categories.

Getting to know the Canadian shopper
Key to successfully targeting the Canadian market is understanding its demographics and shoppers' unique preferences. Borderfree's data paints a picture of the average online Canadian shopper and how they like to shop:
  • The vast majority of shoppers are women (85 percent), at a median age of 41.7 years
  • Canadians who shopped with retailers on the Borderfree platform spent an average of $136 U.S. dollars (USD) each last year
  • Canadians are night owl shoppers, spending big around 5–6pm and peaking between 11pm and 1am, especially on Friday nights where spending takes a major spike up at 11pm.
Additional data compiled in Borderfree's report show Canadians are connected and ready to spend:
  • 79 percent of the population uses the Internet
  • Retail ecommerce sales in Canada reached $21.6 billion in 2013 and are expected to rise to $42.7 billion by 2018, an annual growth rate of 12 percent
  • 45 percent of Canadian online shopping goes to U.S. and international sites (a third to the U.S.), with average annual purchasing approaching nearly $1,100 per shopper
Borderfree developed the Borderfree Index (BFI), a proprietary quantitative and qualitative measure to provide an indication of a market's relative cross-border ecommerce attractiveness. Canada scored five out of five possible "shopping carts" on the BFI, indicating that it is an "ideal market" for cross-border ecommerce.

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