Black Friday Goes Online in Canada

Despite the increased duty-free limits, most Canadian shoppers won't be making a run for the border this Black Friday.

According to a new survey released by UPS Canada, only 12 per cent of Canadians will brave the long lineups at stores and the U.S. - Canada border on the U.S. Thanksgiving weekend. While price-sensitive Canadians know that the Black Friday deals are exponentially greater south of the border they won't be heading out in droves stateside.

Instead, they'll be favouring online shopping carts over physical shopping carts. More than half of shoppers expect to save 10 to 49 per cent off the retail sticker price this Black Friday and Cyber Monday. As such, Canadian retailers are pulling out all the stops in the battle for the non-expanding consumer pie.



"Canadian retailers have obviously picked-up their game in an attempt to keep a larger share of the consumer wallet, particularly with the ecommerce offering that should attract a lot of traffic this season," said Gordon Reed, director at UPS Canada. They've done this by catching consumer attention much earlier than usual. And they had to. Shoppers are researching their purchases earlier and flocking to comparison sites to ensure that they are indeed getting the best deal possible. "What we're seeing globally is that holiday shoppers are tending to put away their wallets in December and sales are not driving the same level of interest that they once did," said Rafe Petkovic, head of Industry at Google Canada. This is expected to continue in spite of the good deals advertised closer to Christmas.



Canadian shopping patterns are expected to mimic the expenditure of our southern neighbours. The National Retail Foundation, one of the largest retail groups in the U.S., said that Americans would be very cautious this year and spend an average of $750. An online survey conducted by Ipsos Reid on behalf of Royal Bank of Canada found that shoppers plan on spending an average of $629 this year.

The growth area in spending is now found online. "We know in Canada online spending grew more than 30 per cent in August, when compared to ecommerce sales in August of 2011. I think this demonstrates a strong shift in consumer spending habits up north," said Ali Cohn, senior industry analyst at Google Canada.

"Online Super Buyers" as identified by research group NPD Group are 25 to 44 year olds who will drive the bulk of online sales in Canada. "Men are enjoying Internet shopping because of how easy it is to compare popular products and to find what they are looking for, whereas women enjoy its convenience and the ability to buy from stores that are not easily accessible," said Rick Brown, director of Analytic Solutions at The NPD Group. "Online shopping is particularly a thrill for women who have become fond of brands that are not available in Canada," added Brown.

So does this mean Canadian retailers have a chance this weekend?

Maybe.

Cross-border shopping already depletes over $20 billion from domestic retails sales. If Canadian retailers make their website as enticing as possible by dressing them up with attractive deals, exclusive offers, provide the products people desire and offer an excellent browsing experience both on a desktop and on mobile, their odds will be good.

To date, the Canadian retailers who have great mobile sites and application are Amazon.ca, Best Buy, Home Depot, Toys R Us and Walmart. As far as advice for Black Friday and Cyber Monday newbies, Petrovic suggested, "Be there [retailers] when consumers are searching for your products and services. And, shoppers should use search [engines] more often to find the offers that exist out there and to connect with savvy retailers."



The UPS survey was completed online between November 5th and 8th, 2012 with a sample of 1,446 Canadians. The margin of error for a representative sample of this size is considered accurate to within 2.53%, 19 times out of 20.

The RBC online survey was conducted by Ipsos Reid and involved 3,375 Canadians across the country between Oct. 1 to Oct. 10. The poll is accurate to within plus or minus 1.9 percentage points of the entire Canadian population.