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Is Cross Border Online Shopping Becoming Canadian Retailers Biggest Threat?

With Black Friday just around the corner and Remembrance Day behind us Canadians are now approximately 2 weeks into their annual 6 week holiday spending spree where we spend more than we earn. Traditionally what this has meant is that retailers ramp up their advertising dollars increasing their digital, print, radio and television media buys in order to ensure they get their share. For the most part these ads are designed to drive foot traffic into retail stores. This is after all part of the Christmas experience which many of us curse and yes some actually enjoy it. This trend is slowly changing with the emergence of online shopping. There is even an online version of “Black Friday” dubbed Cyber Monday which falls the Monday following Black Friday. This is a good thing in the sense that it does drive people away from their computers and mobile devices for at least one day as shoppers know that another mega deal shopping day is right around the corner which they can do from home.

One plus for Canadian retail is that many US online shopping sites do not ship to Canada which traditionally has benefited large retailers who do have a presence in Canada such as Old Navy. Well this has changed. Leading up to the 2014 holiday shopping season I was approached by a Canadian company called myUsaddress.ca which in a nutshell provides shoppers with a US mailbox so you can shop anywhere in the US and they charge you $29 to ship to your door in Canada. What does this mean for Canadian retail? I am first going to provide a few stats to set up my stance. Canadians spend $15.3 billion annually shopping online. An ISPOS Reid survey found 82% of Canadians are making purchases online with an average annual spend of $954 annually per person. So you can understand the impact that companies like myUsAddress could have on the Canadian retail landscape as a significant chunk of this spending will be going south of the border. This isn’t all bad especially if you are a consumer; Big box retailers will have to increase their product line to compete and one would guess prices will go down. But there is a down side. If 82 per cent of Canadians are shopping online what does this mean for smaller local retail?  Many retailers such as those in downtown Kingston have unique product lines that separate themselves from the big box stores. Product lines that in some cases shoppers are going online to find, and often end up on international online shopping sites to place their orders as they do not realize that they could very easily just head downtown. In order to do this they need to know where to go and what is available. Many shop online for convenience but a significant chunk go online to find products they can’t find at home.

How can local retailers combat this inevitable change in consumer shopping habits? The first thing I would do is ensure that you have a suitable website that properly illustrates your product line. If it is in your budget invest in a site that allows customers to make purchases online just as easily as they can with the national retailers. If you shop around you could have a full functioning online shopping site in the five to ten thousand dollar range. This will allow your customers to make purchases just as easily as they can with the online superpowers. An example of a local company who has done a great job of this is http://www.fitness-solutions.ca. The next thing I would do is embark on an online advertising campaign. Think about it these are online shoppers we are dealing with so the only way to really reach them is with an online campaign. While online shoppers are surfing national shopping sites such as Metroland Media’s Save.ca and WagJag you have every opportunity to reach your local audience with an IP targeted impression campaign targeted to your local market with ads on sites just like these not to mention the 50 other sites you can target. You can purchase 20,000 impressions on the Metroland network for $300. If you feel you need a more targeted approach you can take this to another level and look at an audience extension or a retargeting campaign that reaches customers searching for your specific product line even if they go so sites not owned by Metorland. I would back this campaign up with a content marketing strategy such as our In Your Neighborhood platform to increase product and brand awareness. Of course a daily deal on a site such as WagJag is also an excellent option to bring people in.

If you take anything away from this blog it should be that online shopping is on the rise and isn’t going away any time soon. More Canadians are cross border shopping especially now that they can do it from home on their computer or mobile device. As a Canadian retailer regardless of your size you need to have a plan to combat this because if you do not your sales will start to decline and you run the risk dying a slow death as a business owner. Make sure you have a strong web presence supported by a digital advertising strategy so you can get your share.

Follow me on twitter @geoffjosey

Previous blogs

https://geoffjosey.wordpress.com/2014/09/20/print-advertising-is-dead-i-guess-i-missed-the-memo/

https://geoffjosey.wordpress.com/2014/09/03/tis-the-season-if-you-work-in-advertising/

https://geoffjosey.wordpress.com/2014/08/23/online-advertising-its-about-more-than-just-the-click/

https://geoffjosey.wordpress.com/2014/08/17/multimedia-blog/

https://geoffjosey.wordpress.com/2014/08/17/have-local-business-interests-get-involved-in-the-community/

https://geoffjosey.wordpress.com/2014/08/12/using-twitter-as-a-business-tool/

https://geoffjosey.wordpress.com/2014/08/07/extreme-couponing-in-canada/

https://geoffjosey.wordpress.com/2014/09/27/why-all-small-and-medium-size-businesses-need-a-content-marketing-strategy/

https://geoffjosey.wordpress.com/2014/11/06/the-modern-day-print-advertising-rep/

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Tis the Season If you work in advertising

So the kiddies are back to school and Halloween which is the second biggest holiday as far as retail sales are concerned is just around the corner but for an advertising rep regardless of what media you work for the Holiday season starts now. Selling a monthly direct mail product like I do I am always a month ahead so for me it is already October. For most reps in my industry they just sell for today. What I mean by this is picking up ads for next week’s paper, selling 50 more radio spots, locking their client down for another 20,000 impressions for this month’s renewal on their online campaign you get the idea. The Christmas holiday season requires proper planning if you are going to find success so you need to be thinking at least 3 months ahead. What most media reps will do is hit the street in November or even December and start selling their holiday promos such as special sections, holiday greetings, Boxing Day promos the list goes on and on. This is after all the busiest time of the year for the retail industry so you want to grab every penny you can especially since we all know what happens in the first quarter which begins in January. In order to get your fair share before the competition does you need to hit the ground running in the first part of September which is right now. The timing is perfect, the dreadful July and August in terms of sales has come to an end business is picking up and virtually all retailers and business owners know the cash flow is going to increase significantly. This is the perfect time to go out and get it. Top advertising managers who have known this for years start this process in the summer (July) when things are slow and brainstorm product ideas, prospect lists, deadlines, rate cards etc. So once September hits they have their plan in place all they need to do is execute. While their reps are on the streets selling their holiday advertising most other managers are just starting to think about Christmas with the plan of having their attack ready for the streets in November. Well I am sorry to say the big advertising dollars are already spoken for and all you are going to get are the scraps such as holiday greetings.

As an advertising rep you want to get a significant chunk of holiday budgets not the leftovers. How many times in November do you hear “this is a great idea but my Christmas advertising dollars are already spent”? Get out on the streets this week and start presenting your holiday promotions to your top customers with the largest budgets so you can beat the competition to the punch. And If you are a business owner and haven’t started thinking about your holiday advertising  you are about to as I will be knocking on your door this week.

Twitter@GeoffJosey