U.S. retailers seeking to grow online shoppers are looking toward Canada, according to a report released by Borderfree.
Due to Canadians' frequent tourism in the United States and familiarity with U.S. stores, brands and shopping, the market is a top resource for retailers to tap into.
More than 23 million Canadians frequent the United States each year, and Canada is the largest cross-border online market for U.S. retailers today. It was also Borderfree's number one market for cross-border sales from U.S. retailers in 2013.
"Canadians know U.S. brands well and shop them frequently," said Michael DeSimone, CEO, Borderfree. "Between the country's high internet, mobile and social media penetration and an affluent population ready to spend, U.S. retailers looking to sell online to our neighbors to the north will find a ripe e-commerce marketplace. We've also found that targeted marketing efforts in Canada reap big rewards, as evidenced by the most recent holiday shopping season, where U.S. retailers saw significant online demand from Canadian shoppers."
Over the holidays, Canadian shoppers spent an average of 34 percent more daily than during a typical shopping day during the rest of the year, with a fivefold increase on Black Friday. Other peak shopping days include Cyber Monday and Boxing Day. The top selling categories include women's clothing, luxury goods and home goods.
Canadians who shopped with retailers on the Borderfree platform spent an average of $136 U.S. dollars last year. Peak hours for online shopping in Canada are between 11:00 p.m. and 1:00 a.m., especially on Friday nights.
In general, retail e-commerce sales in Canada reached $21.6 billion in 2013 and are expected to rise to $42.7 billion by 2018, at an annual growth rate of 12 percent.
In recent years, U.S. retailers opening physical stores in Canada have not necessarily been as successful as those in the e-commerce space. For example, Target (NYSE:TGT) recently announced that it would shutter all 133 of its Canadian stores. Target Canada never recovered from its initial blunders across the border, and Sears Canada (NYSE:SHLD) is on a continued losing streak. Sears was forced to close more than 100 stores and lay off at least 5,457 employees late last year, and it already closed 75 Kmart and 21 Sears department stores in the first half of the year. In the fall, Edward Lampert, the company's CEO, loaned Sears $400 million from his own hedge fund, ESL Investments.
-See this Borderfree press release
Target opens last three Canadian stores of 2014
Target fires head of Canadian operations
Sears Canada CEO resigns
Sears Canada to cut 1,600 jobs as it outsources, restructures
Uniqlo to open two flagships in Toronto