Canadian retailers prepare online stores for Christmas

Christmas may be six months away, but the festive season is already beginning for Canadian retailers, who are working harder than elves in a toy shop to have their online stores ready for frantic shoppers.

Retailers are making a list of Canadian shoppers, but the categories aren’t separated into naughty or nice.

A dynamic mix of demographic factors is being scoured over by companies that want to make a personal connection with consumers. In the online world of social media, that may be the key to sales success.

Retail chains executives and industry observers discussed tactics that could help bring the online shopping experience closer to the in-store experience at a panel discussion in Toronto last week.

“We’re expecting a strong online sales season over the holidays,” says Emmie Fukuchi, director of e-Business for Air Miles.

Online market sales doubled in Canada between 2003 and 2006, she adds. The Air Miles e-Business has also seen six years in a row of double-digit growth, proving many are flocking online to do their shopping.

But about half the consumers who shop online still run into service problems, says Paula Courtney, president of Toronto-based customer retention company The Verde Group.

Building complex Web stores that offer customization of products is one way retailers try to simulate an in-store experience.

Just like choosing between near-identical items off a sales rack, online retailers say customers want the ability to tweak an item to their liking.

Offering customization is Dell Canada’s approach to selling laptops online, says Anwar Sumar, director of e-business at the PC retailer.

“There is the opportunity and ability to completely customize your laptop right from the piece of art that is on the front of the notebook, to what you do to the sides, to the content and technology, to the notebook itself,” he says. “You can customize something from scratch and build it the way you want it.”

Tailoring a product to the individual shopper is one approach to making a sale. But retailers are also trying to get inside the mind of the Canadian shopper by looking at demographic and behavioural data.

The picture painted by that data is more complex than ever with Canada’s burgeoning multi-cultural cities, retailers agree. There’s consensus about a couple of things: Canadians are different from Americans, and different across the country.

Canadians are more generous than their counterparts south of the border around the holiday season, says Rick Ferguson, editorial director of Milford, Ohio-based customer loyalty service COLLOQUY.

“We asked consumers the question, ‘If you have points in a program that you want to redeem, what do you redeem them for?'” he says. “Most Americans said, ‘It’s all about me’. The Canadians had a 3:1 rating, redeeming most of their points as gifts.”

Trying to get a sense of what type of person a consumer is, proves difficult with e-commerce, Fukuchi says. Retailers are left to substitute what little information they know about a customer to offer them personalized service.

“It’s not the same as a face-to-face interaction where you can get some clues about who they are right away,” she says.

While generous as a whole, the happiest Canadian consumers come from the east coast, The Verde Group’s Courtney says. This probably isn’t a result of receiving better service from retailers, but more of a cultural approach.

Of course, location isn’t the important factor.

“Gender differences are very significant in terms of how consumers want to interact with the retailer, and when they want to interact with the person on the floor in the store,” the CEO says. “Age is a huge factor, since, for some, it is less important to engage with a physical human being.”

Another difference between Canadian and American consumers is the type of advertising that proves more successful.

Canadians are more successfully targeted by advertising that engages a discussion as opposed to an ‘in-your-face’ style. Retailers are trying to apply that approach to the Web’s social media.

Information about a product that provides more insight and doesn’t hit the consumer over the head with product information is the best approach to social media sites, Fukuchi says. Given the opportunity to create content, consumers will take the information and act appropriately.

She says it’s the concept of friend-to-friend recommendations in the offline world, applied to an online scenario. Studies consistently show consumers are more likely to trust the word of “a user of a product rather than a company.”

Consumers are now used to going online to shop for music, books and electronics, Fukuchi adds. But this coming holiday season will see a rise in new avenues of online retail.

Online retail will accelerate most in the areas of apparel, home furnishings, toys and gift products.

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