By doing over 20,000 interviews on the topic!
By: Maureen Atkinson, Senior Partner, J.C. Williams Group
Last month we had the honor of speaking at the Real Estate Forum in Toronto. This is one of the largest gatherings of its kind, where both the investment and leasing arms of Canada’s largest owners and managers of real estate get together. My challenge was to give a ten-minute talk that focused on innovation in real estate. Here is a summary of my presentation.
J.C. Williams Group has been tracking Canadian consumers’ e-commerce shopping habits since 2013. We call this survey the Canadian E-tail Report. Currently, we interview more than 5,000 Canadians a year for this purpose. Since we have a significant amount of data, boiling this information down to a 10-minute talk was challenging, but forced me to think about what is really important to know about e-commerce in Canada. Here are my choices for the top 5 learnings.
#1 The Consumer Isn’t Who You Think It Is:
The general perception is that the biggest e-commerce customer is the young millennial who is always on their mobile—they love online shopping, but they also love stores and malls so their spending tends to be split. Instead, it is the young to middle aged working mother who is the most avid user of online shopping. She doesn’t have time for experiential shopping—and often does her spending after her kids go to bed. The other big change that we have seen is that older Canadians (+55 years) have also become much more active online. So everyone is out there using these tools. For retailers, this is a wake-up call—nobody can ignore this channel.
#2 No Product is Immune:
When we first started doing our research in 2013, Entertainment (books, music etc.) and Electronics had the highest online penetration. Since then, we have seen categories of Jewelry/Watches, Clothing, Footwear and Toys significantly increase their penetration. Lately, Sporting Goods and Leisure Equipment have really moved up. When this penetration reaches the 20% level, we see disruption in stores. We saw it in Books and Music and now it’s happening in the U.S. with Sporting Goods.
#3 Customers Love Amazon:
Amazon regularly gets top marks from customers for trust and service. They are the de facto source for price comparisons. This is just as true for Canadians as it is for the U.S. and Europe. In J.C. Williams Group’s research, we find them as the number one location for online purchases. Furthermore, their Prime membership has made inroads into Canadian households with almost one-third of Canadians having access to Prime. To summarize, they are trusted, they have access to many Canadians, and they continue to innovate. They are not going away anytime soon.
#4 Food is the Next Frontier:
To date, e-commerce penetration into the food sector has lagged most other categories. Now that is about to end. Loblaws knows it. They recently announced that they are going to start testing food delivery in major Canadian markets. It had to happen. Food is one of the largest regularly purchased product categories and it is ripe for disruption. Canadian food retailers have not kept up on the e-commerce front but Amazon is about to jump into this area. We know that more than one-quarter of Canadians have bought food online, but these purchases tend to be more shelf stable products. Now, that is about to change.
#5 E-commerce Brings New Roles and Opportunities to Those Who Pay Attention:
This learning relates to how retailers have reacted to e-commerce trends and technology. This can best be illustrated by three retailers that have shown how to use online and in-store capabilities to reach their customers and demonstrate their brand. Here they are:
This online retailer’s stores are where you can try on their products, but everything is ordered online and shipped to the customer. These showrooms help the customer understand the fit and get a clear idea of the brand—then everyone is driven to their website.
This is a new concept with no inventory that Nordstrom is testing. The customer meets with a wardrobe advisor who will order products either from a nearby Nordstrom store or from their website. This is all about service and experience.
This store is relatively small and has a very narrow assortment that is focused on the online behaviour of the local neighbourhood. The full Amazon book assortment is available through store terminals and online perks (like reviews) can be accessed either through store terminals or via the Amazon app. Products are NOT priced but prices can be accessed through the app or terminals.
MY FINAL COMMENT:
It is not the strongest of the species that survives nor the most intelligent. It is the one that is most adaptable to change!
This statement most certainly applies to retail now more than ever!