Canada Ecommerce October 2018 - ECOMMERCE MARKET GUIDE - Planet Retail RNG
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ECOMMERCE MARKET GUIDE Canada Ecommerce October 2018 1
Contents
Recommendations by CPG Sector
• Food & Beverage
• Health & Beauty, Personal Care
• Household & Pet Care
• Electronics, Office & Entertainment
Market Overview
• Ecommerce Landscape
• Forecasts
• The Canadian Ecommerce Shopper
Unique Planning Factors in Canada
• Cross-Border
• North American Trade Regulations
• Population Distribution
• Last Mile Fulfilment
Retailer Profiles
• Amazon.ca
• Walmart Canada
• Canadian Tire
• Sobeys
• Metro
• Loblaw
• Shoppers Drug Mart
Appendix
2 Canada Ecommerce Market Guide
Recommendations
by CPG Sector
3 Canada Ecommerce Market Guide
RECOMMENDATIONS BY CPG SECTOR
Food & Beverages – Top Planning Concerns & Opportunities
Online grocery Shopper density Loblaw click-and-collect Walmart Instacart
penetration (2018) (pop/sq mi 2018) locations (2018) partnership
5.0% 10 700 2H18
Online grocery is young Geography limits Click-and-collect Partnerships increase to
but seeing investment fulfilment profitability penetration is growing offer on-demand delivery
Canada has a relatively low Perishable grocery delivery Click-and-collect will be a Walmart’s first Instacart
online share of total retail is already difficult due to key model to fulfil online partnership will start in
sales (5%) and online cold chain requirements, grocery orders, more Toronto and Winnipeg with
grocery penetration is even and requires high order common and profitable same-day grocery delivery
lower (1.9% of FMCG density and optimised than home delivery in from 17 Walmart locations.
products). routing to reach many areas. Prepare for more retailers
Participate in retailer trials operational profitability. Develop pack sizes and to partner with delivery
and new program launches Prioritise programs in assortments suited for providers, particularly as
to grow your internal dense urban areas that pickup, and focus on initial they seek to keep pace with
capabilities as online have a higher chance of list-building, as click-and- market leaders in grocery
grocery expands. success. collect has a high chance of delivery.
reorder.
Source: PlanetRetail RNG, Retail Insider, PCInsiders.ca, CTV News, Supermarket News, MobileSyrup, Geopolitical Futures, PayPal, eMarketer
4 Canada Ecommerce Market Guide
RECOMMENDATIONS BY CPG SECTOR
Health & Beauty, Personal Care – Top Planning Concerns & Opportunities
Amazon.ca share of
Shoppers Drug Mart Cross-border order Proposed cross-border
domestic ecommerce
new site launches prevalence (2018) sales tax threshold
(2023)
20.6% 2 63% CAD40
Amazon is the must-win Emerging online category Heavy cross-border Easier access to low
customer specialist competition from US sites ticket H&B products
The Amazon platform Shoppers Drug Mart‘s Canadian shoppers Proposed trade regulations
encourages reorders and launch of two online regularly source health, will enable Canadian
subscriptions for destinations should make it beauty and personal care shoppers to order low
commonly purchased a relevant specialist in this items from the US. ticket personal care items
personal care items. category. from the US without being
Brands should increase US-
Suppliers should prioritise Use these differentiated subject to additional fees.
Canada coordination to
initial list-building to lock in sites for brand-building and avoid internal competition Suppliers should be
longer-term spending on new product launches, that hurt margins. prepared for increased
Amazon. while larger, mass price investments to
ecommerce operators will remain competitive with US
still drive the majority of sites.
volume.
Source: PlanetRetail RNG, PayPal, eMarketer
5 Canada Ecommerce Market Guide
RECOMMENDATIONS BY CPG SECTOR
Household & Pet Care – Top Planning Concerns & Opportunities
Loblaw click-and-collect Walmart stores with Loblaw delivery reach Walmart Instacart
locations (2018) click-and-collect (2018) (share of pop., 2018) partnership
700 127 70% 2H18
Click-and-collect Flexible fulfilment is key More consumers have Partnerships increase to
penetration is growing for online orders access to home delivery offer on-demand delivery
Click-and-collect will be a Walmart offers click-and- Local players are adding Walmart’s first Instacart
key model to fulfil online collect across an increasing home delivery capabilities partnership will start in
grocery orders, more number of its Canadian through partnerships and Toronto and Winnipeg with
common and profitable stores to give consumers internal investments. same-day grocery delivery
than home delivery in another option for online from 17 Walmart locations.
Be prepared with pack sizes
many areas. orders and save on last-
and subscription programs Prepare for more retailers
mile delivery costs.
Develop pack sizes and to maximise profitability of to partner with delivery
assortments suited for Focus effort on this online the heavy products providers, particularly as
pickup, and focus on initial grocery model when frequently purchased they seek to keep pace with
list-building, as click-and- working with Walmart, as it online in the household market leaders in grocery
collect has a high chance of will seek to use stores to and pet categories as home delivery.
reorder. profitably grow fulfilment delivery becomes more
options. popular.
Source: PlanetRetail RNG, Retail Insider, PCInsiders.ca, CTV News, Supermarket News, MobileSyrup
6 Canada Ecommerce Market Guide
RECOMMENDATIONS BY CPG SECTOR
Electronics, Office & Entertainment – Top Planning Concerns & Opportunities
Shoppers purchasing Amazon.ca‘s Cross-border order Proposed cross-border
CE online (2016) ecommerce sales rank prevalence (2018) customs duty threshold
36% 1st 63% CAD150
Online growth requires Discoverability is critical Heavy cross-border Easier access to higher
new channel strategies to winning on Amazon competition from US sites ticket CE items
Ecommerce is a key sales These highly-penetrated Canadian shoppers are Proposed trade regulations
channel for electronics, online categories are well very used to shopping will enable Canadian
office & entertainment suited to Amazon but also cross-border, making them shoppers to order more
categories that will drive entail heavy competition. likely to price compare to expensive products from
significant future volume. US sites for more expensive the US without being
Suppliers should invest in
ecommerce purchases. subject to additional fees.
Brands must utilise strong product content,
channel-specific strategies ratings and reviews, and Brands should increase US- Suppliers should be
to avoid alienating store- AMS/AMG to stand out on Canada coordination to prepared for increased
based customers and the crowded platform. avoid internal competition price investments to
minimise disruption to that hurt margins and offer remain competitive with US
pricing and assortment Canada-specific sites.
strategies assortments where
possible.
Source: PlanetRetail RNG, Retail Insider, Geopolitical Futures, PayPal, eMarketer, Canada Internet Registration Authority: Ecommerce Trends in Canada 2017
7 Canada Ecommerce Market Guide
Market Overview 8 Canada Ecommerce Market Guide
Ecommerce Landscape MARKET OVERVIEW
Top markets by ecommerce GMV (USD bn), 2018
Canada is the largest 10th 800
Ecommerce share
ecommerce market Ecommerce GMV X%
of total chain retail
globally 700
Canada ranks 10th globally in terms of chain
retail ecommerce gross merchandise value 600
(GMV), a long way behind its US neighbour
Ecommerce Sales (USD bn)
and global leader, China.
500
Canadian ecommerce sales will increase at a
CAGR of 11.2% from 2018 to 2023 reaching
USD20.4 billion, but will be overtaken by 400 795.1
Australia to drop to the 11th largest
ecommerce market globally.
300
Canada is the 10th largest
Just 5% of Canada’s total chain retail sales are ecommerce market globally.
456.6
through online platforms, with many smaller 200 Ecommerce share of total retail
Canadian operators yet to go online. sales is far lower compared to
other top markets.
Canada’s small population and large 100 86.5 78.0
geographic area make viable, scaled 69.2
ecommerce operations challenging. 33.5 29.7 28.2 20.7 12.0
0
China US Japan UK Germany India France South Brazil Canada
Korea
61.1% 15.5% 14.2% 17.5% 15.7% 55.8% 8.6% 19.6% 12.8% 5.0%
Source: PlanetRetail RNG. Data sourced on 3 Oct 2018: Variations may occur on data sourced from the database after this time. Sales refer to chain retail sales.
9 Canada Ecommerce Market Guide
Ecommerce Landscape MARKET OVERVIEW
Invest for Growth Must-Win
Canada is an ‘invest for
growth' ecommerce • Strong digitally addressable population growth • Large digitally addressable population
market • High mobile penetration • Well developed and scaled ecommerce
market (ecommerce = >10% of total
Retailers and brands should segment and • Small ecommerce market today, but
retail in 2023)
prioritise their top markets for digital rapid ecommerce growth through 2023
investment and future growth initiatives. • High ecommerce growth forecast
• Strong overall chain retail growth
Key considerations should include: • High credit/debit card penetration
• Low current ecommerce penetration
• Size of the digitally addressable population but strong potential for growth
and future growth potential
• Scale of ecommerce and growth potential
• Mobile penetration Indonesia Mexico Canada UK USA China
• Payment landscape (i.e. credit, cash-based)
Monitor Small & Mighty
• Political environment
Canada is an ‘invest for growth’ ecommerce
• Small and under-developed online market and • Small population but well developed online
market for retailers and suppliers:
limited growth forecast penetration
• High digitally addressable population driven
• Limited ecommerce development • Consumers have strong propensity to
by high internet penetration (90%) and
purchase online
mobile penetration (72%). • High risk markets (e.g. political turmoil)
• Ecommerce currently accounts for 5% of
total retail sales and will grow at a CAGR of
11.2% from 2018 through 2023.
• Consumers are open to shopping online
Russia UAE Singapore
but a low population density and large
geographic area makes ecommerce more
challenging.
Source: PlanetRetail RNG, Internet World Stats, Newzoo Global Market Report 2018
10 Canada Ecommerce Market GuideForecasts MARKET OVERVIEW
Top Canadian retailers by ecommerce GMV, 1P vs 3P (USD bn), 2018
1P sales dominate the 2.5
Canadian ecommerce 3P 1P
2.0
landscape 1.2
1.5
Amazon is the top ecommerce player in
USD bn
Includes Office Depot, and
Canada by a large margin with USD2.4 billion 1.0
Grand and Toy banners
ecommerce sales in 2018.
0.5 1.1
In 2017, for the first time, Amazon’s Canadian 0.8 0.8 0.6 0.5 0.5 0.4 0.4 0.4 0.4
3P sales overtook 1P. In 2018, 3P sales 0.0
account for 52% of Amazon GMV.
The rest of the top 10 Canadian ecommerce
retailers are led by Walmart and eBay, but
most of the top players have similar online
Canadian 1P vs 3P ecommerce sales (%), 2013-2023e
scale.
100%
1P sales dominate in Canada, accounting for 15%
3P 1P 22% 24%
78% of total ecommerce sales in 2018. 3P 80%
sales are slowly stealing share, driven
predominantly by Amazon and eBay.
60%
40% 85%
78% 76%
20%
0%
2013 2018 2023
Source: PlanetRetail RNG. Data sourced on 3 Oct 2018: Variations may occur on data sourced from the database after this time. Sales refer to chain retail sales.
11 Canada Ecommerce Market GuideThe Canadian Ecommerce Shopper MARKET OVERVIEW
Canadian online shoppers by age group (%), 2016 Top online categories in Canada, 2016
The Canadian ecommerce Average basket spend
shopper 6%
Percentage of shoppers who purchased category online
30%
The age demographic of online Canadian USD70 45%
shoppers is spread relatively evenly between
the ages of 18-69. 35% Apparel
Computers are the most common device used
to purchase goods online. Using mobile USD45 39%
phones to make online purchases has
relatively low penetration, but has risen from
Books, music,
12% in 2014 to 36% in 2017.
video
29%
Canadian shoppers most commonly purchase
apparel, books, music, video and consumer USD110 36%
electronics items online. Consumer Millenials (18-34 years) Gen-Xers (35-49 years)
electronics has the largest average basket Boomers (50-69 years) Pre-boomers (70+ years) Consumer
size, owing to larger ticket items. electronics
13% of shoppers purchased groceries online Types of devices used to make online purchases
(%), 2017 USD58 30%
in 2016, with an average basket spend of
USD56.
Toys, hobbies,
games
USD61 27%
Computer Tablet Mobile phone TV
88% 26% 36% 1%
Health & beauty
Source: PlanetRetail RNG, Canada Post: Growing Ecommerce in Canada, Canada Internet Registration Authority: Ecommerce Trends in Canada 2017
12 Canada Ecommerce Market GuideUnique Planning
Factors in Canada
13 Canada Ecommerce Market GuideUNIQUE PLANNING FACTORS IN CANADA
The unique factors shaping the Canadian ecommerce market
Cross-Border North American Trade Regulations
NAFTA USMCA
Population Distribution Last Mile Fulfilment
Source: PlanetRetail RNG, census.gov, Deloitte Global Mobile Consumer Survey 2017, ONS, yougov.co.uk
14 Canada Ecommerce Market GuideCross-Border UNIQUE PLANNING FACTORS IN CANADA
Canadians make more cross-border orders than shoppers from other top
The proximity of the US ecommerce markets around the globe
and ease of cross-border
trade has slowed domestic Self-reported online shopping behavior in the past 12 months
ecommerce development 4% 3% 3% 1% 4% 2% 3% 5% 8%
4% 14%
Situation: Canadian shoppers are ecommerce 23% 25% 22%
28% 29%
savvy and digitally connected. Due to the 29%
proximity of the US and the development of 37%
the ecommerce market there, Canadian 59% 42%
consumers have been able to shop from US
retailers, making it difficult for smaller, local
competitors to compete with no early-mover 95%
advantage.
74% 73% 75%
69% 67% 66%
Supplier Recommendations:
55%
44%
• For multi-national brands, push to 37%
harmonise pricing across Canadian and US
platforms that sell to Canada to avoid
arbitrage and market conflict.
Canada US China Japan UK Germany India France Mexico Brazil
• Local brands should emphasise
differentiation from US alternatives in Domestic Only Domestic & Cross Border Cross Border Only
product development and marketing –
premiumisation or deep discounting, unique “Some estimates suggest that almost half of what online shoppers in Canada
features, supplemental services, or unique,
loyalty-building brand marketing can do this. purchase is from foreign retail sites” – eMarketer, 2018
Source: PlanetRetail RNG, PayPal, eMarketer
15 Canada Ecommerce Market GuideNorth American Trade Regulations UNIQUE PLANNING FACTORS IN CANADA
The renegotiated NAFTA, while still requiring confirmation from country
Regulatory environment legislatures, will lower cross-border import barriers
becoming more conducive
to cross-border Online orders from US NAFTA USMCA
ecommerce Value requiring Canadian sales tax >CAD20 >CAD40
Situation: While not vastly different than Value requiring Canadian customs duties >CAD20 >CAD150
NAFTA, the proposed trade agreement for the
US, Canada and Mexico seeks to lower the
barriers to cross-border commerce, raising Implications
the sales tax and import duty exemption
amount for orders coming into Canada.
Supplier Recommendations:
• USMCA is a tailwind to already high cross-
border activity from the US to Canadian
shoppers, making greater assortment and Canadian Shoppers US Retailers Canadian Retailers
pricing coordination across the two • More low cost items available • Greater Canadian demand • Higher competition from US
markets a priority. ecommerce retailers for low
• Greater selection of retailers • Lower logistics expenses
cost item sales
• As local Canadian retailers see a defensive and items delivering to Canada due to
barrier decline in strength, consider new easier documentation • Greater price competition,
• Increased price competition
competitive requirements of local retailers, requirements potentially resulting in lower
potentially driving lower local
particularly on low price ranges. prices
prices
• Greater shopper base
exposure to US retailer brands
and erosion of own brand-
perception
Source: PlanetRetail RNG
16 Canada Ecommerce Market GuidePopulation Distribution UNIQUE PLANNING FACTORS IN CANADA
Canada has the lowest population density of the top ten ecommerce markets
Ecommerce investment is by sales volume
focused on urban areas,
but still serving highly Top 10 Ecommerce Markets - Population
per Square Mile
distributed shoppers 1,600
1,334
1,400
Situation: Canada’s population is 1,200 1,092
concentrated along its southern border and in 1,000 872
urban centers. Ecommerce platforms face the 800 711
dilemma of deciding which customers to 597
600
serve, faced with the expense of fulfilling 382
orders in rural areas. Given the relative 400 311
sophistication of the Canadian consumer, 200 86 64
even far flung shoppers expect some level of 10
0
ecommerce service.
Supplier Recommendations:
• Ecommerce players will apply pressure on
manufacturers to drive unit profitability
despite high expense of serving some
geographies. Suppliers should continue
emphasising larger pack sizes, ecommerce-
optimised packaging, and solution bundles
to drive basket size and help profitability of
individual orders.
Source: PlanetRetail RNG, Geopolitical Futures
17 Canada Ecommerce Market GuideLast Mile Fulfilment UNIQUE PLANNING FACTORS IN CANADA
Both local and multinational players operating in Canada are expanding
Canadian retailers are delivery coverage and adding other fulfillment capabilities, like click-and-collect
expanding fulfilment
capabilities, especially in Online
Retailer Delivery C&C
grocery Grocery
Situation: All traditional retailers and
pureplay operators are investing heavily in ✔
fulfilment infrastructure, particularly
emphasising click-and-collect when a store
network is available for use. ✔ ✔ ✔
Supplier Recommendations:
✔ ✔
• Manufacturers must consider how to drive
impulse and basket-building through click-
and-collect as in-store traffic declines.
✔ ✔
• Retailer margins will be under as they
increase ecommerce investments and serve
shoppers with home delivery. This pressure ✔ ✔ ✔
will be passed onto manufacturers, who
should consider assortment, pricing, and
packaging strategies to improve online ✔ ✔
profitability.
✔ ✔ ✔
Source: PlanetRetail RNG
Canada Ecommerce Market Guide
18Retailer Profiles 19 Canada Ecommerce Market Guide
Amazon.ca RETAILER PROFILES
Amazon Canada Key Forecast 2018 2023e
Amazon.ca sets the Ecommerce Sales (USD mn) 2,490 3,913
standards for the Canadian Retailer Share of Total Canada Ecommerce Sales 19.0% 20.6%
ecommerce market Ecommerce Rank in Canada 1 1
Situation: CAGR, 2018-2023e 9.5%
Amazon.ca utilises its extensive ecosystem Ecommerce Share of Total Retailer Sales 83.3% 85.0%
strategy in Canada, rolling out shopper-centric
programs to drive loyalty to the platform.
However, Amazon.ca is relatively immature
compared to Amazon’s other markets due to 2013 2016 2018
proximity of the US and ease of use for
Canadians of the Amazon US platform.
Amazon continues to expand its digital ecosystem in Canada
Supplier Recommendations:
• Consider US to Canadian pricing 2012 2017
2014
harmonisation strategies to minimise the
negative effects of Amazon cross-border
sourcing in its 1P business.
• Enact distribution restrictions and controls
related to marketplaces early within
Canadian sales channels to minimise FC Investment:
unauthorised or undesirable 3P listings on • Adding a new British Columbia FC to reach 10 total
Amazon.ca. in market
• All FCs currently clustered around commerce and
• Strategically partner and lean-in with population hubs of Toronto, Vancouver, Calgary, and
Amazon programs when they launch. Ottawa
Source: PlanetRetail RNG, Canadian Grocers
20 Canada Ecommerce Market GuideWalmart RETAILER PROFILES
Walmart Canada Key Forecast 2018 2023e
Walmart Canada Ecommerce Sales (USD mn) 875 1,411
engaging with multiple Retailer Share of Total Canada Ecommerce Sales 6.7% 7.4%
partners to fulfil from Ecommerce Rank in Canada 2 2
supercenter network CAGR, 2018-2023e 10.0%
Situation: Ecommerce Share of Total Retailer Sales 5.2% 7.2%
By the end of FY18, Walmart.ca will become Walmart grocery fulfilment investments
the 2nd biggest ecommerce player in Canada,
overtaking Staples and eBay, thanks to the Fresh grocery Home delivery Click-and-collect
retailer’s investments in new distribution
centres, flexible fulfilment options and third-
party partnerships. A more expansive
assortment via 3P seller hosting will also draw
greater traffic.
21 new instore pickup locations in 1H18,
Supplier Recommendations: bringing total to 105 locations, plus 7
Building a new Home delivery - started same-day pickup locations via external partner,
• Walmart should be a priority retail partner 300,000 sqft fresh grocery delivery in Toronto and Penguin Pickup, in Toronto.
as an alternative to Amazon, but requires grocery distribution Winnipeg via Instacart in 2H18.
coordination of ecommerce teams in areas centre in British 22 new grocery pickup locations in
like price matching and seller acquisition Columbia. Sustainable grocery delivery via Regina, Halifax, Moncton, Victoria &
competition due to the interplay of the Food-X in Vancouver. Orders are Quebec City in 2H18. Will include mobile
marketplaces. This will expand its delivered by Food-X in reusable check-in feature for users to check in 30
fulfillment capacity, bags. mins before their scheduled pickup time.
• Using the US as a leading indicator, reaching more areas
Walmart.ca will heavily leverage stores for and enabling faster 3rd party partners aid faster and Pickup Towers dispensing a shopper’s
click-and-collect and look to define online delivery speeds. more innovative last-mile delivery online orders inCanadian Tire RETAILER PROFILES
Canadian Tire Key Forecast 2018 2023e
Canadian Tire leveraging Ecommerce Sales (USD mn) 115 153
brand equity while Retailer Share of Total Canada Ecommerce Sales 0.9% 0.8%
investing in fulfilment Ecommerce Rank in Canada 26 26
Situation: CAGR, 2018-2023e 5.9%
Canadian Tire, one of Canada’s largest Ecommerce Share of Total Retailer Sales 1.0% 1.2%
retailers, is challenged to compete with
foreign rivals that are driving ecommerce Leveraging its extensive store network
investment in Canada. However, its deeply
entrenched brand affinity with the Canadian Fulfilment Loyalty
shopper and its market-leading loyalty
program can be a differentiator as it adds
ecommerce capabilities.
Supplier Recommendations:
• Optimise placement for the most critical
and highest viewership online banners, and
consider how Triangle Rewards impacts Home delivery – started from select stores in 2H17
online traffic. and has since expanded to ~20% of Canadian Tire Loyalty program – revamping its iconic loyalty
stores. Home delivery is also offered at other program, Triangle Rewards, which is a free loyalty and
• Partner early and collaboratively on its click- Canadian Tire banners, including Mark’s and Spot credit card program with 11 million members, to cover
and-collect strategy, and encourage a high Chek. more of its instore and online banners (shown above),
data sharing to understand growth by
Click-and-collect – With 1,706 stores across and offer enhanced customisation.
fulfilment model, including home delivery
and click-and-collect. Canada, the 3rd largest network behind Sobeys and The move follows similar changes to rival (Loblaw)
Loblaw, Canadian Tire has an opportunity to win in loyalty programs, allowing customers to earn and use
click-and-collect but has been less aggressive in points flexibly across banners in the store portfolio.
expanding it compared to rivals like Loblaw.
Source: PlanetRetail RNG, Canadian Tires, Red Lion
22 Canada Ecommerce Market GuideSobeys RETAILER PROFILES
Sobeys Key Forecast 2018 2023e
Sobeys looking to Ocado Ecommerce Sales (USD mn) 85 100
technology partnership to Retailer Share of Total Canada Ecommerce Sales 0.7% 0.5%
advance grocery offering Ecommerce Rank in Canada 33 35
Situation: CAGR, 2018-2023e 3.2%
Sobeys, Canada’s 2nd largest grocer, recently Ecommerce Share of Total Retailer Sales 0.4% 0.4%
announced a partnership with UK online
grocer Ocado, known for its leading online
grocery ordering, automated warehousing, Sobeys and Ocado are partnering to
fulfilment and home delivery system. build an automated warehouse that
serves Ontario by 2020
Supplier Recommendations
• Optimise packaging for compatibility with
automated grocery fulfillment centres and
robotic capabilities. Capabilities:
• Ocado’s high volume automated FCs are • Ocado Smart Platform software
best suited to urban areas with high order to power system
volumes and shopper densities, namely • Robotic order assembly
Toronto, Vancouver, and Ottawa. Brands
• Average 50 item order assembly
should plan for these shopper types when
time in under 5 minutes
developing ecommerce strategies with
Sobeys. • Most recent Ocado FCs in UK
deploy 1,100 robots
Source: PlanetRetail RNG, Ocado.com
23 Canada Ecommerce Market GuideMetro RETAILER PROFILES
Metro Key Forecast 2018 2023e
Metro building in-house Ecommerce Sales (USD mn) 5.9 19
capabilities and leveraging Retailer Share of Total Canada Ecommerce Sales 0.05% 0.1%
3rd party partnerships Ecommerce Rank in Canada 79 61
Situation: CAGR, 2018-2023e 26.7%
Metro, one of the largest Canadian grocery Ecommerce Share of Total Retailer Sales 0.04% 0.1%
retailers, is a relatively new entrant to online
grocery, but is growing the fastest due to Tackling fulfilment through a combination of in-house investments and 3rd
partnerships with several last-mile delivery
providers, developments of in-house logistics party partnerships
and fulfilment capabilities and the acquisition
of meal-kit service company, MissFresh. In-house logistics and delivery capabilities 3rd party delivery partnerships
Supplier Recommendations:
• Review inventory planning and distribution
capabilities in anticipation of tighter
timeframes as Metro continues to expand
its 3rd party delivery partnerships.
• Seek early partnerships with emphasis on • A new USD400 million automated fresh
data sharing to understand competitive distribution facility in Toronto is slated to
positioning and to inspire future product open by 2023. • Meal Kits – Acquires MissFresh to enter ready
development. • Launched Metro To Home, a last-mile delivery meals market.
solution for manufacturers and retailers of • Last mile delivery – partners with 3P delivery
• Focus on product content, including appliances and other large and/or heavy items. provider Pigeonship, and PUDO, and Penguin
product titles and descriptions that are Pickup in 2H18 to offer same-day grocery
optimised for search performance, to be delivery and click-and-collect.
well-positioned as the platform grows.
Source: PlanetRetail RNG, Metro, CTV News, Supermarket News, MobileSyrup
24 Canada Ecommerce Market GuideLoblaw RETAILER PROFILES
Loblaw Key Forecast 2018 2023e
Loblaw can leverage a large Ecommerce Sales (USD mn) 56 96
store network and an Retailer Share of Total Canada Ecommerce Sales 0.4% 0.5%
advanced home delivery Ecommerce Rank in Canada 39 38
reach CAGR, 2018-2023e 11.3%
Situation: Ecommerce Share of Total Retailer Sales 0.1% 0.2%
Loblaw, the largest Canadian grocer and Ramping up its ecommerce business through click-and-collect and an Instacart
general merchandise retailer, has focused on
expanding its click-and-collect sites and
delivery partnership
Instacart delivery partnership, as Amazon and Fulfilment Loyalty
Walmart step up investment. Loblaw is also
investing in new loyalty programmes to
deepen customer engagement.
Supplier Recommendations
• Top suppliers will support couponing
PC Insiders – new subscription-based loyalty
initiatives with Instacart, due to Loblaw’s
programme, which builds on Loblaw’s existing free
relatively advanced relationship with the
Click-and-collect – plans 500 sites in FY18, loyalty program, PC Optimum.
intermediary in Canada.
bringing the total to 700, with opportunity for Shoppers get discounts and reward points across
• Early click-and-collect partners will be able more locations across its 2,416 store network. several of Loblaw’s banners both online and
to shape their brands’ placement and the instore, including free shipping, 20% back in
Home delivery – expand partnership with
data access from this offering. points, and 20x the regular PC Optimum points on
Instacart from 11 to 16 cities by end of 2018.
all beautyboutique.ca orders.
Loblaw expects to offer home delivery to 70% of
Canadians by end of 2018, up from 50% in 2017. By consolidating the program, Loblaw aims to gain
a single view of the customer.
Source: PlanetRetail RNG, Retail Insider, PCInsiders.ca
25 Canada Ecommerce Market GuideShoppers Drug Mart RETAILER PROFILES
Shoppers Drug Mart Key Forecast 2018 2023e
Shoppers Drug Mart Ecommerce Sales (USD mn) 0.4 0.6
establishes premium Retailer Share of Total Canada Ecommerce Sales 0.003% 0.003%
online experiences Ecommerce Rank in Canada 113 113
Situation: CAGR, 2018-2023e 5.8%
Shoppers Drug Mart is a subsidiary of Loblaw Ecommerce Share of Total Retailer Sales 0.004% 0.005%
and a leading beauty and pharmacy retailer in
Canada. In an effort to diversify its online Shoppers Drug Mart diversifies its online destination with two new online sites
banners and capture a bigger share of the
fast-growing health and beauty online Shoppersdrugmart.ca - features hundreds of Wellwise.ca – features healthcare products and
segment, the retailer has launched 2 new mass and luxury private label and international personal care items targeted at the aging population,
health and beauty websites, wellwise.ca and health and beauty brands. as well as an auto-subscription service that ships
shoppersdrugmart.ca. frequently-purchased items to shoppers’ homes.
Supplier Recommendations
• Health and Beauty suppliers should vie for
premium positioning as these platforms
define the development of the category
online.
• Match assortment to banners and target
shopper segments.
Source: PlanetRetail RNG, ikea.com
26 Canada Ecommerce Market GuideAppendix 27 Canada Ecommerce Market Guide
Further Forecasts APPENDIX
Canada Ecommerce Sales (USD bn) and Share (%) of Total Chain Retail Sales
25 7.0%
6.4%
6.2%
5.9%
5.7% 6.0%
5.5%
20
5.2%
4.9%
5.0%
Ecommerce Sales (USD bn)
Ecommerce Share (%)
15
4.0%
3.0%
10
19
18
17
16
14 2.0%
13
12
5
1.0%
0 0.0%
2017 2018 2019e 2020e 2021e 2022e 2023e
Ecommerce Sales (USD bn) Ecommerce Share (%)
Source: PlanetRetail RNG. Data sourced on 3 Oct 2018: Variations may occur on data sourced from the database after this time. Sales refer to chain retail sales.
28 Canada Ecommerce Market GuideFurther Forecasts APPENDIX
Top 10 Retailers by Ecommerce Sales (USD bn) in Canada
4.5
3.9
4.0
3.5
3.0
2.5
2.5
2.0
1.4
1.5
1.0 0.9 1.0
1.0 0.9 0.8 0.8
0.7 0.6
0.5 0.5 0.5 0.5 0.5 0.5
0.5 0.4 0.4
0.5
0.0
Amazon Walmart eBay Staples Well.ca Office Depot Staples - Shop.ca Costco Apple
Sycamore
2018 2023e
Source: PlanetRetail RNG. Data sourced on 3 Oct 2018: Variations may occur on data sourced from the database after this time. Sales refer to chain retail sales.
29 Canada Ecommerce Market GuideFurther Forecasts APPENDIX
Canada Chain Retail Sales by Channel (USD bn), 2018-2023e
350
300
56
54
250 52
50
48 19
46 18
17
16 22 23
200 14 21
13 20
18 19 27 27
24 26
21 23
26 26
150 24 25
23 23
27 28
25 26
23 24
100 30 30 31
27 28 29
37 38 39 40 41 42
50
44 44 44 45 46 47
0
2018 2019e 2020e 2021e 2022e 2023e
Grocery Hyper/Super & Mass Health & Beauty Home Specialists Food Service / QSR Cash & Carry/Club Discounters Ecommerce Other Channels*
Other Channels*: Other category Specialists, Apparel Specialists, Department Stores, Convenience, Leisure, Consumer Electronics
Source: PlanetRetail RNG. Data sourced on 3 Oct 2018: Variations may occur on data sourced from the database after this time. Sales refer to chain retail sales.
30 Canada Ecommerce Market GuideMore ways to grow your business
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