Online shopping in Canada grew substantially over holiday season, report says

TORONTO ? Online shopping was the winner this holiday retail season, based on a report that says many traditional retailers will need to up their game in order to prevent Amazon and eBay from siphoning away sales in the future.

“E-commerce has become a more preferred shopping channel among Canadians because these digital platforms offer convenience and comfort for shoppers,” said the report this month from BMO Capital Markets analyst Peter Sklar, who compared share of Canadian Web visits during the holidays between online only retailers and bricks-and-mortar retailers with internet divisions, such as Canadian Tire and Walmart.

“E-commerce platforms of the publicly traded Canadian bricks-and-mortar retailers, for example Canadian Tire and Rona, still represent an immaterial share of Canadian web visits in this past holidays relative to Amazon, Walmart, and eBay,” Sklar noted.

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Broader data also confirms that the holiday 2015 period was robust for online retail. November and December 2015 were record-breaking months for online sales in Canada, according to MasterCard SpendingPulse, which tracks consumer payments and estimates for credit, debit, cash and cheques. Online sales taken into account 9.7 per cent of total retail sales in the two-month period, the highest watermark yet for Web sales in Canada. In December, online sales taken into account to 9.9 per cent of total retail sales, up from 8.6 percent in 2014.



In the meantime, overall Canadian retail sales growth, excluding automotive and gasoline, grew two percent year over year over the holidays, MasterCard noted.

To gauge the potential future impact on sales of the Canadian bricks-and-mortar retailers, Sklar looked at Amazon’s listing of top-selling items on Amazon.ca throughout the holidays.

Amazon Canada’s top sellers during the holidays were within the technology category, for example headphones, HDMI cables and television sets, but Sklar said it is inevitable the internet giant will begin to encroach on the operations of legacy retailers.

Amazon’s list included items that wade into the same territory as Canadian Tire’s product offering: automotive items such as leather care kits, household goods such as vacuums, and sports and outdoor equipment such as basketball hoops.

“Although Amazon’s current categories do not substantially overlap using the Canadian publicly owned bricks-and-mortar retailers (except apparel), as the company continues to broaden its categories, we expect that at some stage in the near future, this can have a noticeable effect on a broader range of incumbents such as Canadian Tire,” Sklar said.

In December 2015, Amazon’s share of aggregate Web visits involved 2.7 per cent in contrast to 2.45 percent in December 2014, the BMO report noted. Throughout the same period, aggregate online appointments with eBay dipped to at least one.2 per cent from 1.6 per cent in Dec. 2014, and Walmart’s aggregate online visits fell to about 0.9 per cent from about 1.2 percent a year earlier.

hshaw@nationalpost.com

Twitter.com/HollieKShaw