From:
www.thestar.com/NASApp/cs...9048863851
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U.S. stores eye Web sales in Canada
Growing online market appeals
J.C. Penney sending catalogues
Nov. 9, 2006. 07:39 AM
DANA FLAVELLE
BUSINESS REPORTER
American department store giant J.C. Penney is ramping up its marketing efforts in Canada with more catalogue deliveries to promote its Canadian website, according to Canada Post.
Meanwhile, U.S.-based online shoe retailers are reporting sharply higher sales in Canada, the post office also said yesterday.
And a U.S. firm that has been testing the Canadian market with an online site is planning to open its first physical store in Canada, said officials at Borderfree, the post office's cross-border shopping service.
"What we are seeing, partly because of the strength of the Canadian dollar, is very, very strong growth among American retailers online," Borderfree president Patrick Bartlett said in a telephone interview.
While Canadian consumers make more purchases on Canadian websites than on foreign-owned services, according to Statistics Canada, Bartlett said a growing number of U.S. retailers are eyeing the Canadian online market.
The postal service, which helps foreign retailers set up seamless cross-border sites, is actively soliciting new U.S. clients.
Borderfree's message is simple but appealing in the United States where slumping house sales threaten to dampen consumer spending this Christmas. In contrast, Canadian consumers are feeling confident and ready to spend, said Borderfree marketing manager Paulina Sazon.
The post office says American retailers like what they're hearing.
J.C. Penney, which quietly opened its website to Canadians late last year, plans to drop half a million catalogues on Canadian doorsteps this holiday season to promote the business, Sazon said. The department store operator is one of 135 cataloguers now delivering in Canada, she said, up from 35 two years ago. Research has shown catalogues help drive online sales.
Three U.S. shoe retailers that use Borderfree's service, puma.com, naturalizer.com and shoebuy.com, are all reporting sharply higher sales in Canada this year, Bartlett said.
As well, American outfitting firm Cabela's has announced plans to open its first Canadian store, in Montreal, after testing the market electronically, the post office noted. Cosmetics giant Sephora followed a similar formula, starting with an online store and then opening a chain of mall-based stores across Canada.
And it's not just the Borderfree effect, he said. The service provides shoppers with a landed price in Canadian dollars, making it easier to order from U.S. sites.
Other established U.S. retailers, like Lands' End, which has its own Canadian infrastructure, is enjoying stronger Canadian sales this year as well, Bartlett said.
"Clearly, Canadian retailers, like Chapters (Indigo), Future Shop and Sears dominate the space," Bartlett acknowledged, referring to some of the biggest Canadian owned online retail sites in the market.
Indeed, research by Statistics Canada shows consumers prefer to shop Canadian sites. Last year, consumers made 57 per cent of their online purchases at Canadian sites and spent 63 per cent of their online dollars there, the federal agency said.
As well, two Canadian Web operators, Sears Canada and Canadian Tire Corp., score in the top 10 most visited retail sites in Canada, according to ComScore Media Metrix Canada, which tracks online traffic.
However, many other Canadian retailers have yet to open fully interactive sites, especially in the clothing category, Borderfree's Bartlett said. Canadian consumers still buy fewer items online than Americans and have just started adding more than travel, tickets and books to their online shopping lists, he noted.
"We believe one of the critical reasons Canadians don't buy more online is lack of supply," Bartlett said.
Despite this, Canadians are spending more online as time goes by, according to Statistics Canada. In five years, online spending jumped from $1.1 billion in 2000 to $7.9 billion last year, the federal agency reported last week — a 618 per cent increase. Still, online spending represents just over 1 per cent of the $729 billion Canadians spent on all goods and services last year, the agency noted.