Retailers are gearing up for an e-commerce battle this holiday season after discount giant Wal-Mart Canada Corp. entered the cyber fray, taking on the burgeoning e-titan Amazon.ca.
The push by a growing numbers of chains to pump up their domestic Internet sales raises the stakes for the entire sector. With consumers racing to find deals and convenient shopping venues in uncertain economic times, major retailers are vying to draw customers and stop them from shopping at established U.S. e-tailers.
Wal-Mart Canada’s launch of its new website this fall adds to the growing pressure on merchants to get cyber-selling right.
The discounter has big e-tailing ambitions. “This is Wal-Mart – there’s no limit to how high is high,” said Gino DiGioacchino, senior vice-president of e-commerce at Wal-Mart Canada. “The opportunity here is not only to offer the customer what they see in-store online. Our real opportunity is really going beyond that [offering]that’s existing in the store.”
Dubbed the endless aisle, e-commerce provides retailers with the chance to bolster their business by peddling a vast array of products online, more than they could ever squeeze on to their shelves. But U.S.-based Amazon.ca has nabbed a lot of customers here as it rapidly branches beyond its roots in books into a wide range of merchandise.
In the crucial holiday period, domestic retailers including clothier Mark’s Work Wearhouse and department-store chain the Bay have hopped on the e-commerce wagon, girding to convert browsers into customers even as U.S. chains step up efforts to gain cyber-business here.
“It appears the market has tipped,” said Jim Okamura, online retail specialist at Okamura Consulting in Chicago. “Everyone’s been anticipating Wal-Mart finally going live with their e-commerce capabilities. Obviously it sends a signal to the rest of the industry: if you’re not there or you’re not in some development stage, you’re probably feeling very behind the ball now, if you weren’t already.”
U.S. retailers have cashed in on their Canadian counterparts’ late arrival to online selling, said Jeffrey Grau, principal analyst at digital researcher eMarketer. “Such a large percentage of Canadian online spending goes across the border to U.S. retailers,” he said. Companies such as fashion specialist L.L. Bean and department-store Nordstrom Inc. are offering a range of online promotions to lure Canadians.
Mr. Grau’s data confirm that the appetite for online shopping is picking up in Canada. By year’s end, Canadians will have spent $18.5-billion in retail e-commerce, up 12 per cent from last year, according to eMarketer predictions. By 2015, the figure is projected to be $30.9-billion.
On “Cyber Monday” – Nov. 29 – the Monday after the U.S. Thanksgiving weekend, when online retailers offer some of their best bargains, Canadians spent 15.4 per cent more than they did a year earlier, according to Moneris Solutions, the country’s largest credit-card processor. (Its figures don’t include Amazon.ca, among other U.S. players.)
Wal-Mart’s move online is part of a wider strategic effort by U.S. parent Wal-Mart Stores Inc. to become a heavyweight in cyber space, pitting it against Amazon.com .
Mr. DiGioacchino is leading the Wal-Mart Canada charge, having come from Home Depot Canada, an early e-commerce adopter. Wal-Mart’s online sales so far have beaten internal targets, he said. About one-third of the products that it plans to sell online are available for sale right now. “Our early days, coming out of the gate, have been great. It’s really starting to build.”
The retailer is looking for a lift. In its third quarter, its Canadian same-store sales rose 0.9 per cent, and average purchase value rose 2.2 per cent, but store traffic slipped 1.3 per cent.
Wal-Mart is wooing holiday shoppers with an e-commerce focus on two major gift-giving areas: toys, which Amazon.ca does not carry in Canada, and electronics. It recently started to pilot jewellery, Mr. DiGioacchino said. Shipping charges vary, but movies, music and video games ship for 97 cents. Amazon.ca touts free shipping on purchases of $25 or more, down from $39 last year.
In the next year, Wal-Mart will rev up its e-commerce offerings in home furnishings, hardware, sporting and seasonal goods and apparel, Mr. DiGioacchino said.Report Typo/Error