The State of Canadian E-Commerce in 2021


Heather Hudson

March 12, 2021

When was the last time you bought something online? If you’re like most Canadians, the answer is probably something like “yesterday”, “today” or “three minutes ago”.

In 2020, the retail restrictions brought on by COVID-19 were the galvanizing forces behind accelerated e-commerce growth – which was already on the incline. Consumers stuck at home bought everything from groceries to small appliances to loungewear online in record numbers. Businesses around the globe were forced to up their e-commerce game or build a new strategy from scratch. Fast.

As we inch toward a post-COVID-19 world and begin to anticipate greater freedom in life and business, it’s clear that e-commerce will remain a popular way to make purchases. A Canada Post survey reveals that 93% of Canadians plan to either do more online shopping or the same amount.

And, according to the BCG Consumer Sentiment survey, e-commerce is expected to reach $5 trillion USD in sales in 2021. Yep, that’s trillion with a T.

What does that mean for retailers? What do consumers want most when it comes to e-commerce? And how can businesses meet their needs?

Let’s take a look at some 2021 e-commerce trends and how retailers can accommodate their customers online in the year ahead.

E-commerce in Canada: Trends for 2021

Here are just a few of the trends catching our eye for 2021.

Augmented reality (AR)

The future of shopping is closer than you think. AR “try before you buy” technology has been around for awhile as brands like IKEA and Warby Parker allow consumers to preview what their products would look like in their homes and on their faces. Google is even getting in the game with an AR-fueled cosmetics try-on experience. Retailers that can help their customers feel confident about their purchases before they make them may be in demand more than ever.

Artificial intelligence (AI)

Customer service efforts continue to be boosted by AI. The technology that brought features like chatbots and automated customer conversations make the online customer experience seamless and simple and can also predict customer behaviour and increase customer retention. IT World Canada predicts that AI will be used in 2021 in e-commerce to deliver “uber personalized guidance and recommendations” to customers. Retailers can also leverage valuable data to collect customer information and optimize their experience.

Omnichannel marketing

Retailers who blend brick-and-mortar and e-commerce shopping could see both channels grow. According to Shopify, in 2021, customers will expect to instantly receive a thank you text or email after making a purchase, in-store or online. With more AI-powered data available, retailers can predict buyer-behaviour and invite shoppers who typically shop in-store to buy online and vice versa. “The data collection and omnichannel marketing strategies are becoming endless for your average store that has a physical location and an online store. The more brands fully realize the potential of data across online and offline avenues, and personalize it, the easier it is going to be to build customer loyalty and advocacy,” reports Shopify.

Social media buying

Savvy shoppers know that they don’t necessarily need to visit a merchant’s website to make a purchase online—places like Facebook Shops allow brands to create customized storefronts and hock their wares on social media, where many people spend a LOT of time. Instagram is also rolling out a live shopping experience. And retailers may choose to sell directly to consumers via marketplaces like Amazon, Bonanza and Etsy.

Virtual consultations

While we may re-enter a world where shoppers can once again step into boutiques and showrooms, some consumers may prefer to get the white glove virtual service they may have become accustomed to during retail lockdowns. Retailers may consider retaining virtual service, events and experiences for their customers who prefer the convenience of shopping from home and buying online.

E-commerce in Canada: How to give consumers what they want in 2021

There’s no foolproof formula for succeeding in the e-commerce world, particularly when there’s so much uncertainty in the marketplace — and in the world. But if retailers want to cater to the specific needs of their e-commerce customers, there are some best practices that will be important in 2021.

Have the best platform possible. There’s never been more e-commerce competition, so retailers can’t afford to run an online store that is less than optimal. Think lightning-fast loading speeds, mobile functionality, robust search functions, high-quality images and video, rich product descriptions, instant chat, and other helpful features that make the shopping experience feel streamlined and intuitive. It’s wise to invest in making the best e-commerce site possible and commit to continually improving it.

Provide free shipping. In the e-commerce world, this is no longer a “nice to have”. According to Canada Post, 84% of consumers surveyed will shop more often with a retailer that provides free shipping. Here’s where a great relationship with a preferred shipping company will come in handy. Another wise investment for 2021.

Enable online reviews. There’s nothing more compelling to consumers than the reviews of their peers. In fact, 95% of customers read them before making a purchase. If your e-commerce site doesn’t include online reviews, this is the time to add that feature. And don’t be intimidated by the prospect of a few bad reviews—think of it as an opportunity to challenge your customer service and prove to your customers that you’re a responsive retailer who stands behind your brands.

Commit to sustainability. PayBright’s 2021 Canadian Consumer Trends Guide surveyed 2,500 consumers to understand what’s most important to them this year. More than 64% reported that sustainability was a consideration when choosing to do business with a retailer. And according to The Deloitte Global Millennial Survey 2020, protecting the planet was ranked as a top concern both before and during our most recent global health and economic crisis. Considering the climate when it comes to packaging, delivery options and product choices could be a key differentiator for retailers in 2021.

Offer payment choices. When it comes to payments, people expect options. Whether it’s allowing e-commerce customers to pay by Interac or PayPal or offering the choice to buy now, pay later (BNPL), they will appreciate it. In fact, the rapid adoption of PayBright’s Pay in 4 and Pay Monthly plans for e-commerce gathered a lot of steam at the outset of pandemic in 2020 and hasn’t slowed down since. It’s clear that consumers value payment flexibility – without hidden fees and charges – in addition to a convenient checkout process. For businesses looking to maintain or grow revenue, a BNPL payment option has been proven to increase average order value and boost conversions.

Despite an uncertain future and unstable economy, one thing has seemed to take root: the convenience and ease of e-commerce is here to stay. The job of retailers in 2021 is to make it as easy as possible for consumers to do business with them online – and figure out a few strategies to stand out from the pack.

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Heather Hudson

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