E-commerce battle lines are being drawn this holiday season as two U.S. titans gear up for crucial business.
Discount powerhouse Wal-Mart Canada Corp. is ramping up its online selling with new Web features and tens of thousands of products, while online leader Amazon.com Inc. is putting a bigger push on its e-commerce in this country, stocking millions of products.
Other domestic retailers are sprinting to shore up their shopping sites testing but some have yet to launch e-commerce in any significant way while U.S. players step up their e-store offerings here.
Canadian Tire, which sells tires online, has started to test other products at about 30 of its 490 stores although it won't have a full program until the latter part of 2014, chief executive officer Stephen Wetmore said on Thursday.
"I think this year is at that tipping point where digitally enabled purchases are critical for any retailer's success," said Simon Rodrigue, vice-president of e-commerce at Wal-Mart Canada. "Sales for us, and sales in general, in the e-commerce space will explode as more selection becomes available to Canadians."
The jostling for virtual business takes on importance as it becomes a bigger part of shoppers' habit, threatening to leave some players in the dust. But a more crowded field is forcing merchants to offer margin-pinching services such as free shipping to gain an edge on Amazon and other heavy hitters.
"There's quite a gap," said Hermann Kircher, president of retail specialist Kircher Research Associates. "Our retailers haven't quite caught up."
Amazon's lead in Canada is noticeable: In September, Amazon sites drew 11.4 million unique visitors – up 13 per cent from a year earlier – compared with Wal-Mart's four million unique visitors – up 2 per cent from a year ago, according to researcher comScore Inc. Amazon ranked first among e-commerce sites visited, with Apple sites second, electronics purveyor Best Buy and sister chain Future Shop fourth and Wal-Mart in fifth position, it found.
Retailers are racing to keep up with shoppers' shifting buying patterns. Consumers expect to spend more than 13 per cent more online this holiday period compared with a year ago – to $249 from $220 a year ago, according to data extrapolated from a Pollara survey conducted for Visa Canada. Almost half of Canadians expect to spend between $100 and $499 online, it says.
But many shoppers cross-border shop online because there is more selection at U.S. retailers, Mr. Kircher said.
To help keep them at home, Wal-Mart has raised the bar by offering free shipping on almost any purchase (no minimum spending required) and relaunched its website, allowing shoppers to access it from mobile, tablet or desktop computers. By next year, it will offer the option of customers picking up orders at stores, Mr. Rodrigue said. "But customers told us they'd prefer free shipping to shipping to stores."
As a reflection of its focus on e-commerce, Wal-Mart has set up a separate office tucked behind one of its distribution centres, with just two picnic benches at the entrance and no sign. It's called W.E.B., for Wal-Mart E-commerce Building and, in a boardroom named "Chrome" – after the Web browser – is written "Walmart.ca War Room" at the top of a white board.
Still, with more than 100,000 products stocked on its website for sale, Wal-Mart has just a fraction of the "millions" on sale at Amazon.ca., according to each of their data. In 2013, Amazon.ca added more than 10 million items to its existing and 14 new categories, country manager Alexandre Gagnon said in an e-mail. "At Amazon.ca, our customers can discover millions of items and find an unmatched selection of everyday essentials and must-have products."
Other retailers are stepping up their endless aisle of merchandise that they carry online but not in their stores. "The extended aisle is critical," Mr. Rodrigue. Providing customers with lower prices is even more important than additional items, he added. "Our goal is to catch up as fast as possible," he said. "We're in this to win."
Best Buy Canada also has an endless aisle with almost six times as many products online – 65,000 – as in its stores, said Robert Pearson, vice-president of e-commerce. This year it broadened its online offerings to eight more categories, including jewellery, handbags, and home furnishings. And it has more than doubled the number of items online from a year ago, he said. "We're pretty optimistic with how we're positioned."