GROW YOUR BUSINESS IN CANADA VOLUME 1: ISSUE 2

Look inside to find out about the Canadian

opportunity and how you can get your

share of it!

DM ❤ E-COMMERCE How this unlikely duo can produce winning results.

CLICK & SHIP Delivering a better customer experience.

LOOKING FOR LOVE ONLINE Why the Canadian consumer is the perfect match for you.

32

THE KEY TO E-COMMERCE

SUCCESS IN CANADA

Go North is published by Canada Post.

Director, Enterprise Marketing: Donna Reid Editor: Robert Symes Proofreading: Robert Warner Layout and Design: Mediaplus Advertising

Grow you business today! Visit: CANADAPOST.CA/GONORTH

Contents Copyright 2014 by Canada Post; may not be reprinted without permission.

Welcome to Go North, a magazine about growing your business north of the border, brought to you by

Canada Post Group of Companies, Canada’s largest mail & parcel delivery network and logistics organization.

Canadians are avid shoppers – online and off. Opportunity resides at your doorstep. As the nation’s leading e-commerce parcel delivery service, Canada Post’s data and research can provide powerful insights into how Canadians behave and shop in a digital world, as well as the marketing channels that drive them online. We also provide a delivery experience that keeps customers returning for more. In this issue we’ll share some of those insights with you.

In Canada, e-commerce growth continues to outstrip expectations. Our own parcel data shows year-over-year growth of roughly 30% in major retail verticals such as fashion & apparel and health & beauty, and identifies hotbeds of growth all within reach of the border. Our research shows what Canadians buy online, how much they spend, as well as how often they buy. We even know what their expectations are after they check out. Read about our online shopping lives in ’Looking for Love Online’ (Page 4), then discover what Canadians seek in shipping and delivery in ’Click and Ship’ (Page 6).

We also know that advertising mail can play a key role in any e-commerce strategy. To some, the idea of using advertising mail to promote online sales seems an unlikely fit. If customers are online, isn’t that where you should be marketing to them? In this issue of Go North, we’re not only dispelling that myth – we’re going to show you how the mail is the perfect channel for boosting online sales. In ’DM Loves e-Commerce’ (Page 8), we’ll provide the best practices that will result in effective, money-making campaigns..

I’m confident this magazine will introduce you to the magic of possibility while educating you about the opportunities that await in Canada. When you’re ready, let us help you achieve e-commerce success north of your border.

Serge Pitre,

Vice-President, Sales Canada Post

32,800,000,000 The size of the Canadian e-commerce market in dollars. The 2012 value was C$22.3 billion.

35,158,300 Number of Canadians – a larger population than every US state and dependency other than California.

43,146 Canada’s GDP per capita in dollars – 9th amongst all the world’s nations.

72 The percentage of Canadians buying from international sites who cited a lack of products domestically as a major driver.

42 The percentage of Canadian online shoppers who buy internationally to obtain a better price.

39 The percentage of Canadians who made an online purchase over a six month period after receiving an ad in the mail. Beating out online advertising and email by a significant margin.

4 Toronto’s population ranking amongst North America’s biggest cities, behind only Mexico City, New York and LA.Sources: Canadian eShopper Experience, Canada Post Study 12-209. 2012; ‘The State of Canadian Retail’, Forrester Research 2013: CPC #12-220 DM Omnibus; Statistics Canada

5

As the market share leader in B2C shipping, Canada Post can provide a valuable perspective on e-commerce. Our parcel data reveals the hottest growth areas in online retail. We have conducted extensive research into ecommerce and can provide a comprehensive overview of the Canadian online shopper.

We tell you that, broadly speaking, Canadians have embraced online shopping with gusto:

the past three months;

It should come as no shock that young people (ages 18–24) appear to have embraced online shopping; but the most recent buyers are dominated by the 25-35 age group, many with a college or university education and healthy household income. Essentially, the Canadian online audience holds great potential for sales, fitting the age group, education and income levels long considered in the sweet spot for marketers.

When it comes to gender, stereotypes paint women as shopping leaders, but our research shows that online shopping is split equally between men and women. Some areas, such as fashion and apparel, for example, is dominated by female consumers, but men are active online shoppers. As a country with two official languages, 82% of shoppers said that their first language is English with French

French, showing more of a skew to English among online shoppers. American retailers may be a little concerned that one in every five online shoppers are French-speaking, but read on to see why that may actually work to your favour.

So what are these people buying online? Canadian category purchases follow a similar pattern to those of Americans. For buyers, the most recently purchased category was apparel (18%), books, music and movies (16%), health & beauty products (9%) and consumer electronics (9%). When looking at all purchases within a three-month period, more than one-third of shoppers made purchases of apparel products, with the same number buying books, music or movies. Health & beauty and consumer electronic purchases round out the top four, with a quarter of buyers making a purchase in each of these categories over a three-month period.

Sixty-six per cent of recent buyers had one or more of their recent purchases shipped from outside of Canada, and 43% of them purchased from the U.S.

Canada Post research shows that forty-two per cent of those who purchase outside of Canada do so because of price. Almost half of all international purchasers said they saved more than 20% on Canadian prices, even when all shipping, taxes, customs and duties were factored in. Price was particularly important to French-speaking consumers, (54% listed cheaper prices as their main reason for doing so). This should be welcome news to American retailers who fear language may act as a barrier. Canada is a bilingual nation, and English is widely understood in Quebec. While a best practice would be to offer a site and services in French, data shows that US businesses shouldn’t be discouraged from offering products in the province if they can’t provide this. Quebec remains a relatively untapped market for American retailers, and Quebec shoppers demonstrate high interest in numerous areas of retail.

Product range is the second most important driver for online shoppers. Thirty-seven per cent of people who purchased outside of Canada cited brand availability as their reason for doing so — in many cases the product was simply not available for purchase domestically. A further 19% said that their main reason was greater product selection. In some key categories, the Canadian retail landscape offers less product selection. Canadian online shoppers demand variety and choice and have demonstrated a willingness to buy internationally.

Nearly three-quarters of Canadian online shoppers were completely satisfied with their most recent purchase. That leaves more than 25 per cent with misgivings about online shopping outside of Canada – an area where retailers can make ground. For insights into how to stack the deck in you favour, read ‘‘Click and Ship’, which follows this article (Page 6).

Advertising can certainly give your company visibility. There’s good news here, too. Research shows Canadians are receptive to promotion across a range of media. Canadians want to know about deals on books, movies and music (31%), consumer electronics

the Top 5. The same channels that appeal to Americans work with Canadians, though studies have shown a continued preference for advertising through the mail.

American retailers know of the power of catalogues, but our research shows that penetration in Canada remains low. Opportunity to reach consumers in an uncluttered environment awaits. Less than 50% of Canadians have received catalogues in the past 12 months from retail sectors such as apparel and tourism. This presents an opportunity because almost half of all Canadians will retain a catalogue for later reading, and catalogues drive 38% to

and 12% to purchase by mail or phone.

These are just a few of the insights gleaned from our research into online behaviours. They demonstrate that Canadian consumers are sophisticated spenders and represent a sweet spot for sales growth. As the preferred shipper of online Canadians, and as a company that can deliver your advertising message to every community in the country, Canada Post can help you access the Canadian market. Find out more by visiting us today at www.canadapost.ca/gonorth

As the market share leader in B2C shipping, Canada Post can provide a valuable perspective on e-commerce.

Source: Canadian eShopper Experience, Canada Post Study 12-209, 2012.

4

WHY THE CANADIAN

CONSUMER IS THE PERFECT

MATCH FOR YOU

T he Canadian retail landscape is constantly shifting in our increasingly digital world.

Online sales continue to outstrip forecasts, making it vitally important

for companies to understand online habits and purchasing behaviours

of consumers. When the prize is as large as the Canadian e-commerce market – predicted by eMarketer to hit $34.8 billion by 2016 – the idea that “knowledge is power” has never been more relevant.

Looking forLoveOnline

ReturnsOur research shows that 23% of Canadian online buyers returned a recent purchase or wanted to but didn’t. Looking at the consumer universe, we estimate that 12% of all orders are returned. You might wonder what value there is in keeping these customers happy if they return a good proportion of their orders. The reason: They tend to be high spenders. On average, returners spend 25% more over a three-month period than those who don’t return. The importance of keeping these customers happy suddenly becomes a lot clearer. We also know that a good returns experience increases the likelihood that a customer will feel confident with future online purchases.

The cardinal rule is to make it easy for the online shopper. One-third of Canadians who returned a purchase did so using a pre-printed

returned a product via mail or courier, using a label they obtained online or by paying out of pocket. More than half of those surveyed strongly agreed that including a return label in the original delivery made returns more convenient. Your company should either include an option for return in the original purchase or make it extremely accessible through your online channel. It also helps if the channel of return is close at hand.

Transparency up front is also highly valued – the JC Williams study showed that more than 50% of Canadian e-shoppers agreed that a clearly stated returns policy made for a better experience. Remove any potential misgiving and secure a checkout by setting yourself in a class above all retailers. Your return policy should let buyers know that they can be 100% confident they can easily return or exchange their purchase.

Best Practice: Enable quick and easy returns through pre-printing return labels with your original shipment. Adopt and communicate a clear returns policy.

Shipping SpeedCar ads tout speed as a selling asset, but online retailers know that consumers are willing to sacrifice speed for cost. Our research of Canadian shoppers shows that 82% of recent online buyers of a shipped product chose regular shipping, with only 12% using expedited. Does this mean that speed doesn’t matter to Canadians? Speed matters, but data tells us that Canadian shoppers seek cost-effective delivery as an important option alongside faster modes of delivery.

Best Practice: Provide choice – both cost-effective and expedited.

Delivery LocationEighty-three per cent of recent online buyers with a shipment had their most recent online purchase delivered to their home, and more than two-thirds reported having someone at home at the time of the delivery. The pain point for retailers occurs when consumers are not at home. A missed delivery could result in a lengthy trip across town to a depot, which produces an inferior customer experience and hampers the likelihood of a repeat sale. The answer is to provide convenience and easy access. One-third of shoppers stated that if they are not expecting to be home during a delivery, their preferred option is for the shipper to arrange delivery to their closest post office. A further 23% preferred a card be left explaining where to pick it up (which again can include a post office). Only 18% preferred the option of leaving the package at the door – possibly due to concerns about theft.

Best Practice: Provide convenience – give your customers the option for home delivery or to a local convenient location (and with roughly 6,300 post offices we can help).

To understand how Canada Post can provide best-in-class delivery and returns options for your customers visit canadapost.ca/gonorth

Canadian online shoppers are well versed in the risks and downsides of making purchases across the border. They know the rules of the game and are prepared to go to great lengths to secure the product they want.

6

DELIVERING A BETTER CUSTOMER EXPERIENCE

Click&ShipThis article explores best practices for

providing Canadian customers with a superlative shipping experience.

Research company JC Williams identified the factors that Canadians value most in online buying. As expected, free or discounted shipping and ease of checkout were the top priorities, but a number of other areas ranked very highly, including hidden costs, returns policies, shipping speeds and flexibility of delivery.

FeesPrice is one of the most common determining factors in choosing to make a purchase, so shipping costs are critical. Major non-shipper costs associated with international purchases matter, too. For most retailers, this means the border and the duties, customs and brokerage fees that accompany it.

Dealing with an international border may lead to second thoughts, but evidence shows that opportunities far outweigh the concerns. Canadians are adept and enthusiastic international shoppers. A 2013 Forrester study on Canadian Online Retail concluded: “Canadian online shoppers are well versed in the risks and downsides of making purchases across the border. They know the rules of the game and are prepared to go to great lengths to secure the product they want.” Essentially, there’s a receptive market on America’s doorstep. Gaining access to it makes good business sense. It’s time to make your company accessible.

To make it easier for Canadian consumers, we recommend that potential fees are incorporated into the pricing when the customer pays for the order, to avoid surprises upon delivery.

Best Practice: Incorporate all potential fees into the up-front pricing structure.

Source: Canadian eShopper Experience, Canada Post Study 12-209, 2012.

9

What happens when the oldest form of marketing meets the newest wave of retail? How about a

better return on investment. Direct Mail and e-commerce may seem like uncomfortable bedfellows, but marketers are realizing that these opposites attract.

The affinity between Direct Mail and e-commerce is supported by statistics. According to recent research study by Canada Post, ads that arrive in the mailbox are the most effective channel for stimulating purchases online: over a six-month period, 39% of Canadians made an online purchase as a result of receiving an ad in the mail. Email and online ads tied for second place. Even social media, the current darling of the marketing world, can only muster 8%. The same 2013

company website as a result of something they received in the mail.

The ability of offline media to drive online traffic may seem counterintuitive. When consumers are online, few things could be easier than clicking a banner ad that can immediately drive traffic to a website. But click-through rates often disappoint and people have developed an uncanny ability to filter out online advertising as “noise.”

A proliferation of channels competes for attention. We are inundated daily with marketing messages through email, banner ads, TV commercials, radio, newspapers, magazines and billboards. Direct Mail reaches consumers in their homes and businesses, where they are more likely to read it, and stands out from the din. Amid the noise and haste, Direct Mail offers a reprieve and affords the consumer time to absorb the message. Perhaps that’s why it is such a powerful driver of action.

The 2012 Direct Marketing Association response rate report showed Direct Mail generates a response rate that is 30 times greater than email. Not only are the response rates higher, they result in purchases with great frequency. Not only does Direct Mail outperform other marketing channels on response, but it lifts their effectiveness when used in partnership with them. Multi-channel campaigns are proven to deliver wider overall awareness of your business and increase the

likelihood of a consumer response through every channel. Search engine marketing (SEM) on its own may pick up people searching for solutions online, but Direct Mail can raise awareness of a need, and your company, and result in better SEM campaign results.

Of course, there is no guarantee Direct Mail will increase online sales. Like any marketing campaign, success requires a sound plan, effective execution, a commitment to track results and willingness to adapt and respond.

Here’s how the traditional components of marketing success apply to e-commerce retailing:

TargetingThe beauty of Direct Mail is its ability to target a particular audience. You may already have valuable information about your customers that allows you to send relevant communications when and where they need and want them. Data and list options have made e-commerce mail prospecting highly effective. Demographic and lifestyle data can map neighbourhoods where ideal targets live, while lists can identify the neighbourhoods with frequent online shoppers.

OfferThe offer should drive people to your website. The call to action must motivate consumers to visit your site. Discounts, giveaways and contests can all be effective. Add value by offering access to content, such as videos, newsletters, or other resources – whether shoppers buy a product, or not. Above all, include your website or marketing URL on your Direct Mail piece. If customers have to spend time searching for you online, you risk losing them.

CreativeDirect Mail provides an excellent branding opportunity. Communicate what your business represents. Provide consumers with an interactive, full-on sensory experience, then watch brand engagement and recall soar. Canada Post research shows that 53% of Canadians remember a mail piece two weeks after receiving it.

Find out how Direct Mail can grow your business in Canada. Visit www.canadapost.ca/gonorth

8

Canada Post, Direct Mail Omnibus, CPC# 12-220, January 2013.

39% of Canadians made an online purchase after receiving an ad in the mail.

HOW THIS UNLIKELY DUO CAN PRODUCE WINNING RESULTS

Sources: Canadian eShopper Experience, Canada Post Study 12-209, 2012; DMA Response Rate Report, Direct Marketing Association, 2012. CPC# 12-220 DM Omnibus

10 11

In this magazine we provide insights into how Canadians behave and buy online. We demonstrate that there is a highly lucrative

and largely untapped marketplace on your doorstep. Wondering how can you access this opportunity to grow your business? Look no further than Canada Post.

Who Are We?If you are doing business in Canada, we are your natural partner.

since then, we’ve been trusted by companies to keep the wheels of business moving. Our strength lies in our diversity – whether you require marketing help, extensive shipping options, or e-commerce integration, we have the answer to your needs. Many of America’s biggest and best companies use our services every day. We have the

expertise and tools to help you navigate the border seamlessly and establish a highly profitable customer base in Canada.

How can we help?DeliveryIn shipping and e-commerce, Canada Post is an industry leader, with a range of delivery options that provide the utmost in consumer convenience.

Our success is based on the same grounds that produce positive business results – a superior customer experience. Every delivery is a special delivery for us. No one else delivers more B2C parcels to Canadians than we do. Canadian online shoppers identified Canada Post as their preferred shipper for a reason.

When you work with us, you’re working with a company that has more pick-up and drop-off locations coast-to-coast than all other providers combined. We have the largest retail network in Canada and if our agents cannot complete a delivery, it can be rerouted to one of our 6,300 locations. A network as extensive as ours lends itself to

customer service. Rarely do you have to travel far to pick up parcels or packets. Our network also provides best-in-class return solutions, providing online shoppers with convenient drop-off points for returns.

We also offer a means to deliver parcels to a post office of choice, one that is most convenient for the consumer. This, and community mailboxes, allow easy pick-up if a consumer knows they will not be at home during regular delivery hours.

Finally, our suite of user-friendly tracking services improve your customers’ online shopping experience by providing them with end-to-end visibility. Allow customers to see each stage of the shipping process and follow their package as it enters Canada from sorting through to delivery.

MarketingAs Canada’s Direct Mail experts, we can connect you with consumers, targeting those most likely to read it – in their homes and where they work – and those most likely to respond. Direct Mail with Canada Post offers two distinct, but rewarding solutions – Unaddressed and Addressed Admail™.

Unaddressed Admail™ can most closely be compared to USPS’ Every Door Direct offering. It allows businesses to target all mailable addresses in a given area, an ideal prospecting tool to drive customers to new locations, or a branding tool. To use Unaddressed Admail, all you need is an idea of where you want to market and an ideal profile of who you want to target – no addresses or lists are required to execute your mailing.

Addressed Admail will be more familiar to American Direct Marketers. Through an internal database or list, businesses can target customers with precision. With Canada’s most complete, up-to-date and accurate mailing lists, we can help you identify your target addresses in advance. The diversity of our lists ensures we have one tailored to your needs – from targeting Canadian businesses to identifying people most likely to buy online, and just about everything in-between.

Find out how we can help you grow your business in Canada. Contact us today at gonorth@canadapost.ca,or visit our companies online at canadapost.ca/gonorth

The Keys toCanadaOur strength lies in our diversity – whether you require marketing help, extensive shipping options, or ecommerce integration, we have the answer to your needs.

HOW CANADA POST CAN HELP YOU SUCCEED

Studio

Type Mgr.

Proofreader

Print Mgr.

Art Director

Copywriter

Creative Dir.

Acct. Mgmt.

Client

BY DATEAPPROVALS

CANADA POSTNORTHBOUND 2014 MAGAZINECPC_14_0007_PNONE100%1” = 1”7.75” X 10.5”7” X 10”

4-15-2014 2:15 PMOPTIC PREPRESS

LASER%Typesetting: Optic Nerve

This advertisement prepared by PUBLICIS

Art Director:Copywriter:

Print Mgr:Client Serv:

Colour:Fonts:

JOHN FINNJIM GARBUTTPAT MCKEENBRODIE MCNABB4CTT SLUG OTF, FRUTIGER LT STD

100%

Client:Project:Docket:

Client Code:Built At:

Scale:V.O.:

Safety:

Date:Artist:

Output At:

Trim:Bleed:

100%

7.75” X 10.5”8.25” X 11”

CYAN, MAGENTA, YELLOW, BLACK

CPC_14_0007_P_CART_A

FINALS TO PRODUCTION

REVs

4PDF

AD NUMBER/COMPONENT:

Title:Pubs:

Region/Layer Code:

DUE DATE: MAY 9

PRODUCTION NOTES

WHEN CANADIANS ADD TO CART, GET IT THERE WITH A COMPANY...CANADA POST MAGAZINE

WHEN CANADIANS ADD TO CART,GET IT THERE WITH A COMPANY THAT

KNOWS CANADA.As Canada’s national mail and parcel delivery service, Canada Post is trusted to deliver

more parcels to more Canadians than anyone else. And with over 6,300 locations acrossour country, no one else lives as close to Canadians as we do. So when you’re shippingmerchandise north of the border, trust the largest parcel delivery provider in Canada.

TMTrademark of Canada Post Corporation. canadapost.ca/gonorth

Delivering the online worldTM

S:7”S:10”

Ad size: 7.75”Ad size: 10.5”

B:8.25”B:11”

CPC_14_0007_P_CART_A.indd 1 5/13/14 2:51 PM