Deloitte: Canadian retailers are losing the omnichannel war against U.S. rivals

Canadian retail’s slow adoption of mobile and analytics technology is magnifying the growing threat it already faces from U.S. competitors, new research suggests.

According to the 2016 Omnichannel Customer Experience Index just released by consulting firm Deloitte Canada, American retailers are outpacing their Canadian counterparts in delivering an omnichannel shopping experience to consumers who now demand – and increasingly expect – more choice and convenience than ever before.

For the study, Deloitte partnered with American firm Applause Inc. to test how well dozens of vendors in Canada and the U.S. deliver digital customer experience (CX) in 14 retail categories ranging from furniture to footwear. The retailers were rated using 71 omnichannel criteria across channels such as mobile, online, in-store and even wearables. (All retailers included in the study are anonymous as Deloitte did not disclose any company names.)

Canadian retailers’ slow adoption of mobile and analytics technology is costing them customers to U.S. rivals, Deloitte says.

Mobile still remains a hard sell for Canadian retailers, Deloitte found. Its report suggests they continue to lag American firms in allowing customers to use mobile apps, access mobile inventory data and complete their purchases via mobile devices.

“Mobile is the widest point in the omnichannel divide between Canadian and U.S. retailers,” Deloitte’s report states. “It’s important to understand how consumers use or want to use mobile in a particular (retail) category and the extent to which it influences shoppers’ behaviour.”

Overall, Deloitte concludes “U.S. retailers (are) outpacing their Canadian counterparts’ omnichannel offerings in most categories.”

Deloitte says Canadian companies fare just as well as U.S. firms during the initial “path to purchase” phase, when merchants help consumers discover, research, test and validate potential purchases. But American retailers outshine Canadian ones in providing various ways for shoppers to do things like complete purchase transactions or obtain customer support.

Cross-border shopping

Jennifer Lee, national retail and consumer analytics lead at Deloitte Canada.

Many Canadian consumers cross-border shop (either online or in person) because U.S. retailers provide a far better omnichannel experience, said Jennifer Lee, national retail and consumer analytics lead at Deloitte Canada. She presented the findings during the Data Marketing conference in Toronto on Monday.

Lee said weak omnichannel offerings in Canada play a strong role in the fact that about 90 per cent of Canadians cross-border shop compared to just 54 per cent of Americans.

The Deloitte study describes the ideal omnichannel situation as “the complete integration of web, mobile and physical stores – a seamless, cross-platform experience” that includes “consistent inventory information and shopping basket availability across all channels.”

The report says omnichannel CX should “also provide significant post-purchase support with features such as product recommendations or allowing product returns with digital receipts.”

Deloitte cited home improvement as the one sector of retail that’s doing omnichannel the right way. Home improvement retailers outperformed all other merchant categories in both Canada and the U.S. based on the study criteria.

Deloitte commended home improvement retailers for providing shoppers with accurate and timely inventory data, easy instructions and support for DIY renovation projects, mobile apps, multiple delivery options, online and mobile coupons, personalized customer profiles and wish lists, and in-store scanners to check prices or pay for items.

Grocers fared worst

Other Canadian retail categories that fared well in omnichannel CX were department stores, mass merchant/warehouse, hardware, beauty and sporting goods. The worst Canadian CX performers were grocers, pharmacies and jewelry stores.

Deloitte’s report advises Canadian retailers to boost their use of mobile tech and advanced predictive analytics, describing the latter as crucial to “forming key customer insights, identifying growth opportunities and determining the smartest omnichannel investments for their company.”

Deloitte warns that Canadian retailers which fail to do so “could find themselves losing customers to their U.S. counterparts or new market entrants that deliver a superior omnichannel offering.”

Nordstrom, Marshalls and Wayfair are just some of the American retailers that have established physical stores or separate online divisions in Canada in recent years.

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Christine Wong
Christine Wong
Christine Wong has been an on-air reporter for a national daily show on Rogers TV and at High Tech TV, a weekly news magazine on CTV's Ottawa affiliate. She was also an associate producer at Report On Business Television (now called BNN) and CBC's The Hour With George Stroumboulopoulos. As an associate producer at Slice TV, she helped launch two national daily talk shows, The Mom Show and Three Takes. Recently, she was a Staff Writer at and is now a freelance contributor.

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