Google Canadian eCommerce June 6, 2011 from eCommerce-Camp-Toronto

Google Confidential and Proprietary 1

eCommerce in Canada
Where Are We Now And Where Are We Going

Sara Scurfield
sscurfield@google.com

Google Confidential and Proprietary

eCommerce Retail Sales in
Canada are about 1% of Total
Retail Sales

Source: Retailing in Canada, Euromonitor, April 2011

But Expected to Double by 2015

Spend in Billions
$30.9
$27.4
$24.1
$21.1
$18.5
$16.5

2010 2011 2012 2013 2014 2015

Source: eMarketer, Feb 2011 Canada Google Confidential and Proprietary 4

77%
Of Canadians
are Online

82%
Of Canadian
Internet Users
Shop Online

57%
Of Canadian
Shoppers Buy
Online

Source: eMarketer, Feb 2011 Canada

In 2010, Online
Shoppers
Averaged 6.5
Purchases

= 6.9 = 6.1 = 7.4
Source: Ipsos Reid Interactive Digest, February 2011
HH $75K+

One Canadian in Three Who Bought Gifts This
Past Holiday Bought Them Online


Top Three Categories Bought Online At The Holidays

Toys/Games

Books
35% Apparel
33% 28%

DVDs/Video


How Much Do Canadians Buy?

The Average Annual Spend
Per Online Buyer is $1446
Source: eMarketer, February 2011, Projected figure for 2011

What Does The Future Hold?


In Q1, eCommerce Sales in the US were
8.6% of Total Retail Sales
eCommerce Growth Rate is Almost
Double That of Overall Retail

Multi Channel Retailers Starting to Re-
gain Share vs. Pure Plays in Q1

Source: ComScore, State of the U.S. Online Retail Economy in Q1 2011, May 2011

Other Trends From Our Neighbours To The South

Books/Mags, Computers/Peripherals, & Video
Games saw Q1 growth rates higher than 15%

Consumer Electronics is the first category where
online shopping is hurting the bottom line due to
price transparency.

Mass Merchandisers & Drug Stores attract site
visitors with eCommerce, Rx and Health
information
No such drivers to supermarkets in the US. In
the UK, Tesco (grocery) is growing their e-Comm
business.

And Never Underestimate the Power of …

49% of all
purchases in Q4
2010 offered
"free shipping”

61% at least
somewhat likely to
cancel their entire
purchase if there
was no free shipping


And Some Trends Right Here in Canada…

1. Keeping it Local
- Group Buying a Hit In Canada
- Strong Multi Channel Retailing:
Clicks to Bricks, Store Level Inventory online & Mobile

2. Mobile
10% of Search Queries in Canada now coming from Mobile Phones.
Top Retailers with Top Apps- Promoting loyalty, extending customer
service

3. US Retailers Want a Piece
- US Store shipping to Canada (JC Penney, Abercrombie,
Bloomingdales)
- Border Agnostic Shoppers, strong CDN Dollar, go where the deals are
found


Google Talked To Canadians About Shopping

• Google Commissioned Ipsos OTX MediaCT to conduct research to better
understand consumers’ shopping behavior in:
• Home Appliances
• Home Furnishing Items
• Home Improvement / Gardening Items
• Clothing & Apparel

• Qualified Respondents Are:
• Canadian residents
• Ages 18-64
• Past Six Month Purchasers of categories listed above

• Each respondent assigned to one product category they qualified for &
answered surveys specific to their category

• Interviews conducted in April, 1,000 respondents.

15

What Did We Find?

6%
Purchased Online

Highest at 8% for Home Appliances;
Lowest at 4% for Home Improvement/Gardening
Source: Google Canada Retail Study, Ipsos/OTX, April 2011 Google Confidential and Proprietary 16
Q1E. How did you purchase your (CATEGORY)? (n=1003)

4 in 10 Category Purchasers Went Online
to Search For Information

Q2A. Which of the following sources did you use to gather information about the (CATEGORY) you most recently purchased? (n=1008)
Q2B. And, which of the following sources did you turn to first when you began your information gathering process?) (n=586)

Where Are They Going Online?

Store or Retailer Websites 67%
Search engines 48%
Brand or manufacturer websites 39%
CATEGORY websites 28%
Review websites (e.g., CNET, ConsumerReview) 22%
Price comparison websites (e.g., Bizrate, Nextag) 15%
Online-only retailer websites (e.g., Amazon,
Overstock) 14%
Auction websites (e.g., eBay) 10%
Blogs, message boards or chat rooms 8%
Social networking sites (e.g., Facebook, Myspace) 7%
Coupon websites (e.g., Groupon, LivingSocial) 6%
Online video sites (e.g., Youtube, Yahoo! Video) 6%
General interest websites or portals (like AOL, MSN) 5%
Other websites 5%
Q3A. Which of the following online sources did you use as you researched and gathered information about the (CATEGORY) you most recently purchased? (n=404)

And How Useful Are Those Sources?

Extremely / Very Useful

1 Store or Retailer Websites 70%

2 Search Engines 68%

3 Online Video Sites 67%

Q3B. Overall, how useful do you think each of the following online sources were to you as you gathered information about your (Category)? (n=404)

One in Ten Who Used Search Bought Online

Q3D_1. Now we would like to know how each of the following sources helped you as you researched and gathered information
about the (Category) you most recently purchased. You may choose more than one statement for each source if you feel it applies.

2 in 10 Mobile Information
Gatherers Bought Online

Q3D_1. Now we would like to know how each of the following sources helped you as you researched and gathered information about the (Category)
you most recently purchased. You may choose more than one statement for each source if you feel it applies)

These Tablets Were Made for Shopping
• 6% of Canadians own a tablet and half
spend between 2 to 6 hours a day on
their device
• Triple-digit growth in
tablets by end of 2011,
estimated 1.5M devices
“ 41% of consumers
who planned or were
considering buying an
iPad cited
shopping as a
primary reason for their
interest”*
*US Data

Source: eMarketer, How the iPad is Transforming Retail, April 2011 (US Data); NPD Group, Tablet Sales Poised to Surpass eReader, May 2011;
IDC - Canadian Media Tablet 2010–2014 Forecast: A First Look at the Hottest Devices in ICT, Jan 2011

Key Takeaways

Canadians Shop Online! Break Down the
1 Barriers Like We’re Doing

2 Think Local

3 Think Mobile … and Tablet too.


Thank You
Sara Scurfield, Account Manager - Retail
sscurfield@google.com

Alexandra Cohn, Industry Analyst – Retail
acohn@google.com


Google Canadian eCommerce June 6, 2011 from eCommerce-Camp-Toronto

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