DM Magazine February 2021

12 PROFILE: A Life in Business as a Marketing Family ❱

8 Canadians Track Their Spending: A Marketing Trend ❱

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VOL. 34 • NO. 2 • FEBRUARY 2021

THE AUTHORITY FOR THE DATA-DRIVEN BUSINESS

The Consumer Speaks:

Ten Trends That Could Define 2021 ❱6

ECOMMERCE

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❯❯ The Consumer Speaks:

Vol. 34 | No. 2 | February 2021

DESIGN / PRODUCTION Jennifer O’Neill - jennifer@dmn.ca ADVERTISING SALES Steve Lloyd - steve@dmn.ca CONTRIBUTING WRITERS Brian Green Steven Page Joris Kroese Lorenzo Pellegrino Jeremy Levy Billy Sharma

Ten Trends That Could Define 2021

ON THE COVER

PRESIDENT Publisher & Editor-in-Chief Steve Lloyd - steve@dmn.ca

LLOYDMEDIA INC. HEAD OFFICE / SUBSCRIPTIONS / PRODUCTION:

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302-137 Main Street North Markham ON L3P 1Y2 Phone: 905.201.6600 Fax: 905.201.6601 • Toll-free: 800.668.1838 home@dmn.ca • www.dmn.ca EDITORIAL CONTACT: DM Magazine is published monthly by Lloydmedia Inc. DM Magazine may be obtained through paid subscription. Rates: Canada 1 year (12 issues $48)

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Omnichannel Trends 2021:

Watch for Three Tech Advancements

ANALYTICS ❯❯10

How Cloud Data Warehouses Impact the Customer Journey

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Canadians Track Their Spending, a Behaviour Marketers Need to Watch

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❯❯11

How SMBs Can Survive and Thrive

The Perils of Fraud

Cross-Border Shopping comes with Merchant Concerns

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Consumer Attitudes, Behaviour

What You Need to Know for eCommerce

Twitter: @DMNewsCanada

PROFILE

❯❯12

A Lifetime in Preparation for Stalco

One Man’s First Person Account of a Journey in Business

FUNDRAISING ❯❯22

What the Research Shows When Americans Turn to Canada FEBRUARY 2021

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How Nonprofits are Cutting Off Their Noses to Spite Their Faces DMN.CA ❰

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ECOMMERCE

Omnichannel Trends 2021:

Watch for Three Tech Advancements

W

hen we look at the incoming trends for the retail sector for 2021, it’s clear just how much of an impact COVID-19 has made, as consumer expectations grow in the space of instant delivery, augmented reality and social commerce.

With each year comes a selection of new retail trends, however, 2021 is going to be a little different.

Over the past year, we’ve seen eCommerce growth accelerate as physical retail stores closed their doors (many for the last time) due to the COVID-19 pandemic.

In the current retail landscape, the need for omnichannel commerce has never been more vital.

Implementing a cross-channel sales strategy and providing consumers with the seamless experience they desire is what will put brands ahead of their competitors this year. With this in mind, these are three omnichannel advancements marketing professionals should look out for in 2021.

Instant delivery The bigger online retail has become, the faster customers have begun to expect their orders. In a recent survey, Sendcloud found that 41 percent of consumers abandon their shopping cart due to long delivery times, meaning brands and retailers will need to do more to keep customers from shopping elsewhere in the coming year.

While next-day delivery has become increasingly popular across online retailers, it’s just not fast enough for some consumers.

Currently, around 96 percent of consumers think ‘fast delivery’ means same-day delivery.

In 2021, we should expect to see more same-day and instant ❱ DMN.CA

delivery options. We’ve already seen this in action at Amazon, with their same-day and express delivery services available at certain locations, along with their Amazon Fresh grocery delivery service. In the U.S., Walmart has also introduced an ‘express delivery’ option in specific areas, where customers can place an order online and receive it via contactless delivery in two hours or less.

While fulfillment and logistics may currently be an obstacle for some brands, this is the big omnichannel trend of 2021.

Instant delivery connects online and offline channels, utilizing in-store stock that may not be shifting as fast, and leverages physical stores’ proximity to consumers. Plus, the faster customers receive their orders, the more likely they’ll be to shop again with that brand or retailer — and the sooner they’ll shop again. It’s a win-win for brands and retailers.

Augmented Reality: ‘Try before you buy’ AR was once a ‘cool’ experience offered by a handful of retailers, but with customers unable to visit physical stores throughout the COVID-19 pandemic, it’s become a necessity for many, and something that sets retailers apart from their competitors.

Ahead of the pandemic, we saw the likes of Ikea, Amazon and various luxury brands dip their toes into the waters of AR by offering consumers the chance to ‘try before they buy’. However, according to a survey by McKinsey and Company, it’s thought the pandemic has accelerated the adoption of digital technologies by around seven years.

In the past year, we’ve seen various brands and retailers adopt AR strategies. For example,

COURTESY VECTEEZY.COM

BY JORIS KROESE

“Live shopping is also likely to become more prevalent in 2021” jewellery brand, Kendra Scott introduced a virtual try-on tool, allowing users to test out jewellery remotely using AR technology.

In September 2020, Levi’s also introduced various AR solutions as part of a back-to-school campaign, which featured a group shopping feature, a Snapchat virtual closet, and remote clothing try-ons.

Even when stores do re-open for good, increased online shopping will be here to stay, so technologies like this will prove beneficial for brands’ omnichannel strategies.

On top of this, we’re also likely to see a higher level of in-store hygiene and safety precautions for years to come, meaning the need for things like virtual fitting rooms and AR makeup testing could grow even more.

Shoppable video Social media shopping has grown massively in recent years, with Facebook, Instagram and Pinterest each enabling consumers to make in-app purchases from their favourite brands. However, we expect this to expand even further in 2021, with more brands introducing shoppable videos to their social media channels.

Instagram’s shoppable function has allowed brands to add product tags to in-feed images and videos

for a few years now. However, last year, the platform introduced similar shopping functionalities to IGTV, Instagram Stories, and Instagram Live, with testing also going ahead on the new ‘Reels’ video feature.

Live shopping is also likely to become more prevalent in 2021 — and not just through Instagram.

Software such as CommentSold Live enables brands to live stream flash sales across multiple channels at once, updating a single inventory in real-time. For brands with multiple online channels, this is a great way to keep customers engaged — not only can viewers watch and interact with the live stream, but they can also add to their cart and purchase without leaving the video.

There’s certainly a lot to look forward to in 2021 when it comes to omnichannel technological advancements. The retail sector has come a long way in the last few years, and we’re excited about what the future has in store.

JORIS KROESE is the CEO and Founder of Hatch, an omnichannel where-to-buy solutions provider. Joris has been working within the eCommerce industry for more than two decades, where he has strengthened his expertise in omnichannel retail and marketing technology.

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ECOMMERCE

The Consumer Speaks:

Ten Trends That Could Define 2021

I

f you’re an online retailer right now, the future has never been so undefined. We’ve already seen massive changes in many sectors, but will they continue?

What’s normal in the new normal?

Any predictions are just that: predictions.

Fortunately, we have the voice of the consumer. And Canadian consumers are voicing their changing needs and preferences very clearly indeed. It can be difficult to stay on top of it all.

Canada Post is committed to improving your understanding of the eCommerce trends, and consumer trends, impacting your business today and tomorrow.

Our goal is the same as yours: to help keep you one step ahead of consumer expectations — and your competition.

Here are 10 notable trends that

❱ DMN.CA

can inspire your thinking and fuel your planning in 2021, and beyond.

1

Shoppers listen to other shoppers User-generated content, or UGC, is created by consumers rather than businesses. And that’s precisely what makes it so effective. Consumers devour this kind of content, whether it’s in the form of reviews, ratings, comments on social networks, videos and more.

Thirty-two percent of online shoppers state reviews and other user-generated content as a reason to frequent a specific retailer.

Shoppers appreciate retailers who showcase user reviews and other forms of user-generated content.

UGC can also say great things about your brand. You believe in

transparency and authenticity — attributes that can be absolute ‘tie-breakers’ when consumers are picking between brands.

So, if you’re not doing so already, encourage customers to share their reviews, ratings and other feedback on your website and social networks. Consider incentivizing them with an exclusive discount code or, if you’re on a budget, with a contest.

In short, user-generated content can help drive consumer engagement, establish credibility, and generate traffic — all great reasons to put it on your checklist.

2

Offering exclusive products is a powerful motivator One of the best ways to differentiate your brand is by offering a unique array of products. In fact, you could

make the case that carrying hardto-find items is more appealing to consumers than offering them a wide selection of products.

Forty-two percent of online shoppers state selling things that are hard to find elsewhere as a reason they frequent a specific retailer.

Selling exclusive products may be a tall order for some businesses, so we’re not suggesting that everything you carry must be next-to-impossible to find. Start with products that are difficult to source elsewhere. For instance, you may be the only retailer in the province, city or town that carries a particular line of products. Or create your own exclusive line.

Once you have products that stand out in a crowded marketplace you can make them a focal point of all your communications.

But what if unique products FEBRUARY 2021

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ECOMMERCE are off the table for you? You could align yourself with a local or national charity, giving back a portion of every sale to a good cause. Corporate social responsibility influences consumers’ buying decisions and will continue to do so in the future.

3

Thinking green appeals to consumers The pandemic seems to have replaced sustainability on Canada’s news sites, but that is only for the short-term. Sustainability and other corporate social responsibility objectives will be top of mind for consumers for decades to come.

Forty-six percent of consumers will shop more often with retailers who are taking steps to reduce their carbon footprint.

More than ever, consumers are aware that their buying decisions can make a positive, meaningful impact on the world.

Younger consumers are known to actively look for brands that share their values. Think about ways in which you can establish and communicate a distinct corporate social responsibility message. It may involve, for instance, cutting back on the packaging you use during shipping, or choosing sustainably-sourced materials.

Learn how you can transform online shopping experiences to meet and exceed your customers’ expectations. Contact an expert.

4

Home is where your customer is The pandemic has left many marketers searching for solutions to a host of new communications challenges. One of the top ones: How to reach and engage housebound consumers suffering from digital burnout. Direct mail may help your message resonate in an increasingly cluttered online environment.

More than half of Canadians say they will open and read advertisements that they receive in the mail in the next 6-8 months.

Sixty percent of Canadians like receiving coupons in their mailbox.

It may be time to remix your marketing mix. Canadians are working from home more than ever — and consuming direct mail like never before. This channel doesn’t necessarily replace your digital efforts. If anything, direct FEBRUARY 2021

mail’s unique combination of targeting, physicality and relevancy can amplify your digital marketing mix. If you need to deliver brand experiences right into the hands of the consumers that matter most, direct mail is worth considering.

entrench brand preferences. You also open the door to up-selling and other selling opportunities.

The top categories for subscription boxes include books, meal kits, arts and crafts and hobbies. Wine, spirits, beer, health and wellness are also on the rise.

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A little peace of mind goes a long way The increase in online shopping will continue to keep package security top of mind among consumers. It’s up to retailers to find ways to reassure their customer base.

Seventy-three percent will shop more often with retailers that ensure their packages are secure when they are not home to receive them.

Your delivery partner’s ability to meet customer expectations is an important part of your brand promise. Responding to their need for safer, more secure package delivery can be yet another point of distinction.

Canada Post offers a unique range of solutions for enhanced delivery experiences. Community mailboxes, parcel lockers and P.O. boxes enable customers to pick up packages on their own time. For even more convenience and security, our extensive retail network, together with FlexDelivery™, provides a 15-day hold on pickups — 10 more days than our competitors.

Subscription boxes increase revenue and build loyalty. What’s behind the phenomenal growth of subscription boxes? Consumers love the thrill of trying new products, without the hassles of shopping. For retailers, subscription boxes represent an additional source of recurring revenue — and ongoing consumer loyalty.

Fifty-one percent of shoppers have purchased a subscription box for themselves or as a gift. Top subscription box categories: books; meal kits; art, crafts, hobbies; wine, spirits, beer; and health and wellness.

One of the fastest-growing trends in eCommerce, subscription models can be an amazing source of predictable revenue for your business and can seriously boost customer loyalty. Most models are sold monthly, enabling customers to experience your brand on a regular basis. This helps to

Loyalty is a two-way street Loyalty programs are as old as marketing itself, but that’s no reason not to create one. Like subscription boxes, a loyalty program can generate recurring revenue, plus it can make your most valued customers feel special.

Win-win indeed.

Seventeen percent of online shoppers cite a great loyalty program as a reason to frequent a specific retailer.

When considering a loyalty program, keep your customers in mind. What are they expecting?

What do they truly value? What will incentivize them to keep coming back? While points, credits and discounts are common, you don’t necessarily have to build your program around them. Your customers may be happy with invitations to members-only events, or free shipping and returns.

7

eCommerce is here to stay Over the past year, more Canadians have turned to online shopping than ever before, with millennials and Gen-Z driving the shift. While it’s reasonable to assume that some consumers will go back to their pre-COVID-19 shopping habits, not all will.

Striking the right balance between the online and offline worlds will be key.

Ninety-three percent of Canadians plan to either do more online shopping or the same amount.

Forty-eight percent report buying more items online since the start of the pandemic and 30 percent report avoiding in-store shopping.

You’ll need to monitor how and when your customers are buying in the months ahead. Your marketing spend should reflect their preferences. Also, think about how changes will affect your targeting efforts and how you’re balancing in-store and online promotions.

8

Free shipping is a must Free shipping has become table stakes among online shoppers. These days, most consumers don’t even look to see if you offer it — they just expect free shipping as par for the course.

Eighty-four percent will shop more often with a retailer that provides free shipping.

Unexpected shipping charges at checkout is a major cause of cart abandonment. So, the question isn’t can you afford to offer free shipping, but can you afford not to?

It’s so important that companies devise and test free shipping strategies. You could offer free shipping on a minimum purchase value, consider free shipping during special promotional periods, or offer free shipping to your best repeat customers.

9

Returns is more than a process — it’s a strategy As online shopping has ballooned, so have returns. Rather than looking at returns as a hassle, consider it an opportunity to further distinguish your business from the pack.

Seventy-six percent will shop more often with retailers that provide free returns.

Customers have good memories.

They won’t forget a returns process that’s complicated or costly.

So, your returns strategy should strive for optimal convenience.

Make your returns policy clear and upfront on all key communication channels — from your printed advertisements to your website.

And if you can, offer consumers free shipping on returns. Chances are your competitors already do.

10

Your customers can guide you The turbulent shifts of the last year have made it challenging to plan for the future.

There are no easy short-term answers. The best we can do is continually listen to our customers and monitor how their needs are changing. That way, we can quickly shift when they shift. Every year, Canada Post invests in delivering industry-leading eCommerce and marketing research to Canadian online retailers.

SOURCES: Canada Post. 2020 Fall Survey,

20-2014, October 2020.

DMN.CA ❰

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ECOMMERCE

Canadians Track Their Spending, a Behaviour Marketers Need to Watch

BY LORENZO PELLEGRINO

A

s Paysafe discovered when we surveyed consumers last April, COVID-19 and the social distancing measures Canada and other countries have put into place to combat the virus have impacted when, where, and, arguably most importantly, how they are spending money.

The shift to eCommerce is one clear and potentially unsurprising consequence. A third of Canadians (33 percent) are shopping online more frequently, with 15 percent of consumers in the country shopping online for the first time since the COVID-19 outbreak, and this is in turn affecting the payments methods they use. But there are other reasons habits are changing.

The potential economic consequence of COVID-19 Another easily identifiable consequence of COVID-19 is the economic impact it is having on many people. Unemployment, lack of available freelance work, reduced wages, and reduced hours are all significantly hitting many consumers’ financial circumstances as businesses around the globe combat the negative effects of COVID-19 on their operations.

With less disposable income, many will inevitably reduce the overall amount of money they spend. But could it also impact how they choose to spend money?

With some payment methods being easier than others to track spending, will this differentiator become key for consumers?

Businesses have already noticed a change in the way people are spending Businesses believe that the answer is yes. In September we surveyed 1,100 online businesses in Canada and the U.S. as well as the U.K., Germany, Italy, Austria, and ❱ DMN.CA

Bulgaria, on the impact COVID-19 is having on them, and they were clear that the pandemic is making a difference to the way consumers are making payments.

Looking at Canada, over two thirds of businesses (68 percent) told us that they have noticed a change in consumer behaviour regarding their online payment method preferences since the start of the outbreak. Of these changes, an increased use of digital wallets is the shift in payments methods that has been identified by the greatest percentage of Canadian businesses (43 percent). But other alternative payments methods, such as eCash (identified by 28 percent of eCommerce firms in Canada), are also growing in popularity.

advantages of these financial services is the ability to maintain a better view of how and when you are spending money.

But like many other trends, COVID-19 may have accelerated people wanting more control over the granular details of their spending habits. In difficult economic times, tracking expenditure allows consumers to live within their means and income, even saving to ward of future uncertainty.

“We have all heard stories of parents giving kids access to their credit cards.”

When we asked businesses why they think these changes are taking place, Canadians wanting a more seamless payments experience (43 percent) and a more secure payment method due to fraud concerns (41 percent) were the top reasons they identified.

For the latter trend, the economic impact of COVID-19 may be a contributing reason here, with consumers increasingly being concerned about financially coping if they were unable to recover the funds. But interestingly, an almost as significant reason — proposed by over a third (37 percent) of businesses — is that Canadian consumers are using payment methods to track their spending more accurately.

This is not necessarily a new phenomenon. We have seen the rise of digital banks in the past half a dozen years, and one of the main

Payments as an assessment of spending behaviour So how do alternative payments fit into this consumer objective?

Limiting spending by moving away from bank cards and especially credit cards is one method. Itemizing purchases more clearly as per a digital wallet is another. Prepaid methods (i.e. a loadable source of funds where the amount credited cannot be exceeded) that prevents you from overspending or budgeting via a digital wallet is another.

In this instance a consumer may budget themselves $150 a month to spend on takeout food; if they only use their prepaid payment method to pay for food deliveries and only upload $150 at the beginning of each month, they won’t exceed the limit they set themselves.

One other example of this would be using an eCash product as a form of “pocket money” or

spending control between parents and children. We have all heard stories of parents giving their kids access to their credit card details through games that offer app-based purchases, and the child running up huge bills. By uploading cash to a prepaid card, or giving the child cash that they can upload to a prepaid card themselves, parents can be assured that the child won’t intentionally or accidentally overspend when gaming.

Moving forward Overall, the impact of COVID-19 will continue to affect consumer spending for the foreseeable future and potentially permanently.

Consumers have told us that they plan to spend more money online even when COVID-19 is no longer a factor in their lives, and that the criteria they use to decide which payments methods has changed. For businesses, expanding the options available in their online checkout to retain and acquire new customers will only grow in importance.

Canadian consumers are increasingly gravitating towards online retail and eCommerce, with alternative payment methods like digital wallets and eCash solutions seeing significant growth, partly due to their ability to better track and control expenditure. Amidst economic uncertainty, could APMs help get Canada back on track?

LORENZO PELLEGRINO, CEO, Skrill, NETELLER &

Income Access, at Paysafe. Prior to assuming his current role, Lorenzo was the Executive Vice President of Digital Development for Optimal Payments plc from 2012 to 2015.

FEBRUARY 2021

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ECOMMERCE

The Perils of Fraud

Cross-Border Shopping comes with Merchant Concerns

I

nternational fraud protection leader ClearSale released an extensive analysis of its five-country study on consumer attitudes commissioned from Sapio Research titled, 2021 Global ECommerce Consumer Behavior Analysis. The analysis shows merchants how online shoppers in the U.S., U.K., Canada, Mexico and Australia decide which eCommerce stores to buy from and which to avoid.

“With so much growth in online shopping worldwide this year, we want to help merchants understand customer attitudes so they can meet the expectations of their ideal customers, whether those are American Baby Boomers, Mexican millennials or Gen Z Australians,” said Rafael Lourenco, ClearSale Executive Vice President.

The study was conducted in early March 2020 surveyed more than 1,000 frequent online shoppers

TORONTO BUSINESS DISTRIBUTION April 2021

in each country. The survey asked shoppers for their opinions about online security and data privacy, their concerns about online fraud and where they prefer to shop, among other topics.

Among the survey findings, 52 percent of all consumers order from overseas merchants as well as in-country retailers and 50 percent are most likely to shop on a phone or tablet. “These numbers show that merchants that don’t accept cross-border orders and provide a good mobile experience are missing out on half of their potential customers,” Lourenco said.

The survey also found that consumers worry about fraud but don’t have patience with merchants who reject their orders by mistake. ❯❯ 78 percent of all consumers say they feel as safe or safer shopping online than in stores, even though 42 percent have

❯❯

been victims of online fraud.

39 percent of all consumers say they’ll never shop again with a merchant that declines their order.

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The Animal Guar dian Society

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Greater Toronto Chapter

ASSOCIATION PARTNER

t’s been over 30 years since Kathy Asling found an old puppy on the street. She 8-weekAs an animal immediately called possible link to rescue group the pup’s every in her local newspaper. owners and ran an advertisement microchip pets. You cannot we know how important it is to predict what will A reporter who Kathy to write happen in the saw the ad called future so we always advise a cover responsible pet an appointment Although no owner story. owners to for was ever located, procedure. It’s better this quick and painless 5 minute make calls to adopt the she received almost puppy. (or less) to be safe than 200 options sorry. With other adopters and conducted She instinctively screened out there, we also expensive prospective know that home visits. Kathy not to proceed but had names decided on with micro-chipping many pet owners decide and their pets because provide a loving numbers of several families she a home price. That is why TAGS initiated home to a dog. felt would saving of the a cheap way to The next day she local shelter and a good amount microchip, visited started ‘match of people who had making’ by contacting the The revenue goes toward money (instead of paying $90 called her looking and up). a good cause the need through to adopt.

The Animal Guardian – helping dogs & cats in Society.

How We Use Your Money 100% of your donations goes to helping the program as we animals in our have far is the veterinary no paid staff. TAGS’s largest expense by bills. We want are healthy, and to be sure that sometimes this all our dogs means expensive or surgeries that medications cost hundreds or even thousands In addition, all TAGS dogs are of dollars. spayed and microchipped prior to adoption. or neutered, vaccinated to receive some While TAGS is donations of dog fortunate purchasing quality food, we also spend Identifying the dog food to feed need for someone money Other expenses to our dogs in of good dogs from to step up and include the production foster care. save the lives being put to death, and promotional created the name of training, educational material.

The Animal Guardian Kathy and her daughter To donate visit of 1987 the first Society (TAGS).

Durham Region our In March org based or see our donationwebsite at www.animalguardi Kathy set out to meet with individualsrescue was formed. an. information at https://www.canad guide her into Canada Helps developing a program who could mentor and ahelps.org/en/dn/1 integrity and ethics 3492 that that would promote would operate with our community humane education and find homes to for displaced animals.

Vision Statement Perhaps the most relationships with difficult task in the early days ❯ To sustain the was creating operation of our Animal Controls. a foreign word, program and Rescue in those continue to serve and the constant days was and protect the from death and our community. animal citizens research labs becamestruggle to save animals of emotionally and ❯ To never see a task that proved physical draining. any animal abused, to be this was not the It abandoned or unwanted. job for one person. soon became evident that left ❯ To continue Kathy needed help.

Now 30 years to provide medical later and thousands homed, she has care and training animals in our of dogs successfully yet care. to rework closely with to stop! Kathy and her corps ❯ To construct of volunteers a shelter that will animal shelters, community to provide safe housing humane societies, for animals until improve the lives permanent homes and the of canine citizens. ❯ To ensure that Today, TAGS is are found. a charitable non-profit our shelter offers not receive any a centre for learning and education organization and government funding. to does public donations ❯ To see no animal our community.

We are entirely for funds. Other reliant on put to death in TAGS needs other than monetary municipally run shelters because donations, pet care items like they are overlooked beds and blankets, good quality dog of space. or due to lack leashes and collars, food, dog We also need other ❯ To encourage winter coats, dog those items toys, etc.

The Animal Guardian like building materials and dedication to animalswho profess their love and services.

Society’s microchip to take a stand a popular tradition, participate in the to educate and offering inexpensive clinics have become pet owners in the ❯ To see the day cause of rescue.

Toronto and Durham microchip services for when rescue will no longer be necessary, as all Region area. animals will have 2 safe, loving homes.

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“Any merchant who wants to understand their customers’ behavior can use this information to improve their customer experience and reach cross-border customers more effectively,” Lourenco said. The full analysis of the eCommerce customer survey is available at https://offer.clear. sale/global-ecommerce-consumerbehavior.

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“Here we see the importance of letting customers know that your store has fraud protection, as well as the need to avoid false declines that drive customers away and reduce average customer lifetime value,” Lourenco said.

The survey also found differences in consumer behavior between countries. For example: ❯❯ 72 percent of Mexican online shoppers and 60 percent of Australian online shoppers order from both overseas and in-country merchants, compared to only 37 percent of U.S. and U.K. shoppers. ❯❯ 64 percent of Mexican shoppers read merchant reviews before making an online purchase,

GTA

but only 34 percent of U.K. shoppers do.

Australian and U.S. shoppers are the most likely to abandon a purchase if asked to create a customer account.

2021 GTA GIVING

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The Animal Guar dian Society

I

t’s been over 30 years since Kathy Asling found an old puppy on the street. She 8-weekPerhaps the most immediately called possible link to difficult the pup’s every in her local newspaper. owners and ran an advertisement relationships with Animal task in the early days was creating Controls.

A reporter who Kathy to write saw the ad called a foreign word, and the constant Rescue in those days was a cover from death and Although no owner story. research labs becamestruggle to save animals was ever located, emotionally and calls to adopt the a task that proved she received almost physical draining. puppy. to be 200 this was It soon became adopters and conducted She instinctively screened not the job for evident that prospective one person. Kathy home visits. Kathy Now 30 years but had names needed help. decided on later and thousands and provide a loving numbers of several families she a home homed, she has yet of dogs successfully to stop! home to a dog. felt would work reThe next day she local shelter and closely with animal Kathy and her corps of volunteers visited started ‘match shelters, humane people who had making’ by contacting the community to improve called her looking the lives of canine societies, and the the Today, TAGS is to adopt.

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4

2021 GTA Giving

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Guide

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foundationmag.ca

t’s been over 30 years since Kathy old puppy on Asling found an the street. She 8-weekimmediately called possible link to the every in her local newspaper. pup’s owners and ran an advertisement A reporter who to write a cover saw the ad called story.

Kathy Although no owner was ever located, calls to adopt the she received almost puppy.

200 adopters and conducted She instinctively screened prospective home visits. Kathy but had names decided on and provide a loving numbers of several families she a home home to a dog. felt would The next day she local shelter and visited started ‘match people who had making’ by contacting the called her looking the to adopt.

Identifying the need for someone of good dogs from to step up and save the lives being put to death, created the name The Animal Guardian Kathy and her daughter of 1987 the first Society (TAGS).

Durham Region In March It is our mission based Kathy set out to to companion animals provide re-homing and medical meet with individualsrescue was formed. care to displaced and guide her into education, behaviour to support the community developing a program who could mentor and in areas of humane counseling, the integrity and ethics that promotion of ownership, and that would promote would operate with the needs of animals.responsible pet our community humane education and find homes to for displaced animals.

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Telephone: 905-263-TAGS

(8247)

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t’s been over 30 years since Kathy old puppy on Asling found an the street. She 8-weekimmediately called possible link to the every in her local newspaper. pup’s owners and ran an advertisement A reporter who to write a cover saw the ad called story.

Kathy Although no owner was ever located, calls to adopt the she received almost puppy.

200 adopters and conducted She instinctively screened prospective home visits. Kathy but had names decided on and provide a loving numbers of several families she a home home to a dog. felt would The next day she local shelter and visited started ‘match people who had making’ by contacting the called her looking the to adopt.

Identifying the need for someone of good dogs from to step up and save the lives being put to death, created the name The Animal Guardian Kathy and her daughter of 1987 the first Society (TAGS).

Durham Region In March It is our mission based to Kathy set out to companion animals provide re-homing and medical meet with individualsrescue was formed. care to displaced and guide her into education, behaviour to support the community developing a program who could mentor and in areas of humane counseling, the integrity and ethics that promotion of ownership, and that would promote would operate with the needs of animals.responsible pet our community humane education and find homes to for displaced animals.

We welcome your To donate visit feedback and Please feel free our website your questions. to contact us org or see our at www.animalguard General information with any questions or comments donation information ian. about our program https://www.canad you at Canada Helps or volunteering: have. ahelps.org/en/dn/1 tagsinfo@animalguard 3492 ian.org foundationmag.ca

Telephone: 905-263-TAGS

(8247)

2021 GTA Giving

Guide

5

PLUS…When the GTA GIVING GUIDE is published, Foundation Magazine’s website will feature the editorial stories from all participating charities. Each story will have a live link to allow visitors to get more information about your non-profit.

In addition, Foundation Magazine readers will be able to download a digital copy of the Guide to keep on their computer or mobile device, which means added exposure to an ongoing audience of potential new corporate sponsors, donors and high net worth individuals.

For more information call Steve Lloyd, 905-201-6600 x225 or steve.lloyd@lloydmedia.ca

TORONTO’S CORPORATE PATHFINDER TO CHARITABLE INVESTMENT FEBRUARY 2021

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ANALYTICS

How Cloud Data Warehouses Impact the Customer Journey

BY JEREMY LEVY

A

cross many different industries, 2020 has been about reacting to an unpredictable series of events — a global pandemic followed by a recession that made consumers more pessimistic than they were in 2008. This year has somewhat darkly reinforced the truism that nobody can predict the future.

What marketers can do, though, is observe the landscape and project where their business ought to be going. Marketing teams help their product-focused peers shape the future with insights from customers. Looking forward to 2021, analysis is the watchword. Close analysis of user data can give marketing teams superpowers, elucidating the best customer acquisition and retention strategies. The more marketing teams know about their best customers, the more likely it is they will be able to replicate those customers through similar marketing campaigns.

The future of customer analytics The analysis of user data to make business decisions about marketing and product is Customer Analytics. To understand how analytics can revolutionize marketing look first at a base-level analytics product like Google Analytics. It became ubiquitous among web marketers in large part because it was so easy to install. All it took to start gathering insights about web traffic and how customer segments converted through the funnel was a single line of code embedded in your company’s website.

Now Google Analytics is even easier: if you own a WordPress or ❱ DMN.CA

Squarespace or Shopify site, just click the box that toggles analytics on and off. My mother is proficient enough with the internet to conduct this level of basic analysis.

As a new baseline has emerged, marketers have engaged data teams within their organizations to glean far more granular insights from user data stored in a cloud data warehouse.

Cloud data warehouses (CDWs) have broken through to the mainstream in 2020, most significantly with Snowflake’s IPO in September. The proliferation of CDWs underpins every use case of user data, from analytics to production. With each passing year, CDWs become cheaper and easier to operate, accelerating the value a marketer can get from their data. The insights gleaned from analysis of that data will become a standard necessity for marketers.

Customer Analytics platforms that connect directly to a CDW and integrate easily with Snowflake, Google BigQuery and others will provide marketers visibility into the customer journey at every touch point. Next year, we’ll see significant movement toward those sorts of integrations, and within the next five years we will have moved past questions of access to greater and more specific and actionable insights.

A marriage of marketing channels The COVID-19 pandemic has significantly altered how companies engage with their customers in ways well beyond the advent of no-contact delivery.

This year has driven nearly every interaction online. As the virus subsides and our lives revert to a

pre-pandemic rhythm, customers will still expect a cohesive experience irrespective of the channel — on their laptops or mobile devices, in-store or by phone. Omnichannel marketing, with all that entails, is the new normal. Companies large and small will invest huge sums into digital transformation, including artificial intelligence and predictive analytics to support omnichannel marketing goals.

If your business has the cash or credit to spare after a difficult year, look to align all major communication channels and make sure your data stack is adequately indexing and categorizing each potential customer interaction.

Over time, email opens, chatbot sessions and app engagement reveal patterns of behavior that can distinguish your best customers and identify those most likely to churn. It’s then up to the marketing team to get the most lifetime value out of those customers.

Beyond the horizon By the end of 2021, most companies will not have utilized customer analytics to their fullest potential, but once you’ve established a CDW and woven insights from user data into your marketing and product decisions, what is there left to do? Look beyond the limits of today’s analytics platforms and start to plan for what’s on the horizon.

There are two distinct ways customer analytics can improve for marketing teams — reducing the time necessary to gather actionable insights and making it easier to integrate those insights into your business.

The former is nearly possible.

Viewing complex user data in real-time will allow companies to see how even the smallest changes can impact the customer journey. Combined with machine learning, these capabilities will unleash more insightful analytics — proactive, predictive, and prescriptive. Predictive analytics allow organizations to anticipate customers’ needs and deliver content through hyperpersonalized marketing tactics.

The real game changer, though, will come when the analytics platform can be trained to adapt to the insights it reads. If the purpose of Customer Analytics is to drive revenue, the analytics engine can steer your business to your bestperforming customers and replicate the best-performing user experience across all channels. It might be five or more years from now, but imagine telling your analytics platform what your goal is and having it light up the correct path.

Data analytics frees marketers from rote trial-and-error based change. The data accelerates that process and tells us what the right decisions to make will be. Technology will continue to improve and marketers will acquire better tools to track the efficacy of their campaigns, but the ultimate guide to better marketing in 2021, or any year, is to listen closely to the customer.

JEREMY LEVY is the CEO and Co-Founder of Indicative, a Customer Analytics platform for product and marketing teams. He is a serial entrepreneur and a veteran of New York City’s Silicon Alley. Jeremy Co-Founded Xtify, the first Mobile CRM for the Enterprise, acquired by IBM in 2013. He also Co-Founded MeetMoi, a pioneering location-based dating service for mobile sold to Match.com in 2014.

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ANALYTICS

How SMBs Can Survive and Thrive

BY BRIAN GREEN

W

hile small and midsized businesses (SMB) are as diverse as society, there is one thing they all have in common: the need to sell goods or services.

During this COVID-19 pandemic, the vast majority of SMBs have had to make changes to how they interact with customers in order to reach a vastly changing market.

The most common challenge they face has been the adoption and implementation of technology to help them sell digitally, and effectively creating a multichannel — or omnicommerce — approach to their go-to-market strategy.

The businesses that have found an efficient way to do so are reinventing themselves amid a pandemic and finding new ways to be successful.

Omnicommerce encompasses the myriad of channels through which a business can sell, and a customer can buy. These can be physical face-to-face interactions, entirely digital engagements or interactions that combine physical and digital experiences.

Some examples of how the COVID-19 pandemic is compelling traditional businesses to enable new omnicommerce experiences include: ❯❯ Table service restaurants.

These offer customers the option to order online for pickup and delivery. This solution is payment-enabled web app that incorporates a menu, and can communicate orders to the kitchen while also connecting with delivery services; ❯❯ Main Street retail stores.

Many of them now sell via a web store or social media, and the solution is payment-enabled shopping cart and social media buy buttons; ❯❯ Custom window distributors.

These businesses replace phone collections with e-invoicing and that includes a pay button and tracks invoice payment status ❯❯ Beauty salons.

Customers can make appointments online and pay digitally in advance.

These businesses can offer FEBRUARY 2021

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an integrated point-of-sale (POS) solution that supports appointment booking, online payment and customer loyalty/ rewards; and Home fitness equipment.

These sellers make large purchases more affordable for consumers; this is buy-nowpay-later program for online purchases, enabling consumers to spread their purchases out over several months.

Some SMBs are having to accommodate all of these experiences to succeed, and others only a sub-set.

Regardless, it can be a daunting task for any small business to enable these experiences without bringing increased cost and complexity into their business.

Especially if the SMB attempts to use multiple technology providers to enable these new commerce experiences. Doing

so can make tasks such as inventory management, financial reconciliation and protecting customer data much more difficult: and ultimately create new headaches for the business owner.

The power of one As omnicommerce moves to the forefront of SMB success, the value of working with a provider that can enable a broad range of payment experiences through a single platform is growing in importance.

Providers in the competitive “smart” POS space in Canada, including Clover, the cloud-based POS platform from Fiserv, are focused on enabling the omnicommerce experiences each specific businesses — from pizza restaurants to barber shops — need to succeed. These can include in-store sales, e-invoicing, eCommerce, social media, appointment scheduling, employee management, customer

management, gift and loyalty solutions and many other valueadded services.

Essentially, with such a platform the SMB can get everything they need to run their business from one system: while benefiting from the simplicity of a single account, streamlined inventory management and data analytics.

The ways in which SMBs do business have forever changed due to the pandemic. Today’s SMB must engage their customers through new channels, accept multiple forms of payment and create new experiences that build value for the consumer in the simplest manner possible.

Omnicommerce has been essential to their survival in 2020 and will be catalyst for any business hoping to thrive into the New Year.

BRIAN M. GREEN is President, Merchant

Services, Fiserv Canada.

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PROFILE

A Lifetime in Preparation for Stalco One Man’s First Person Account of a Journey in Business

For the Pages, it's a family affair in making the business work.

PHOTOS COURTESY STEVEN PAGE

BY STEVEN PAGE

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Steven Page was born and raised in Toronto, Ontario.

He is a serial entrepreneur with 28 years experience in successful entrepreneurial ventures, 20 years specifically in the Natural Products/Nutraceutical industry. ❱ DMN.CA

hen I was 9 years old, I sold soda pop that I stole from my parent’s basement for 10 cents a can. I think the retail price was around 35 cents but since I had no cost of goods, it was straight profit.

When I was 16, having just gotten my driver’s license, I needed to figure out how to start making money in the summer months, so I decided to start my own courier company “Page Boy Courier Service.” It was pretty straight-forward: I bought a beeper and called all of my father’s friends, who were professionals, and asked them if they would use me to do their deliveries.

Back in the early ‘80s, email was non-existent, and the facsimile (fax) was in the making but not yet a “thing”. Letters, contracts, agreements, and almost anything else with an urgency to be delivered, was done so by courier. Page Boy Courier ran successfully for three summers, earning me a lot more money than many of my friends who had “real jobs.”

At 19 years old, I started selling garbage bags, paper towels and toilet paper in bulk, doorto-door. I had been so successful at sales, that the owner of the company asked me to be his partner, and together, we set-up a national franchise program to enlist and train university FEBRUARY 2021

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PROFILE students to run their own summer businesses selling home supplies door-do-door under our banner name “Student Supplies.”

My partner and I started running seminars at universities in Toronto and Montreal in an attempt to recruit students, and in our first year we sold 10 franchises to students in Toronto and Montreal. We negotiated a deal with a major bank to provide our franchisees with Student Venture Capital Loans which would not only fund our franchise fee but would also fund the student’s opening inventory. Students were trained and given order pads and branded T-shirts and sent off to sell to homes in their respective territories. Our most successful students were earning over $10,000 each summer, which was huge money at that time. Student Supplies continued to grow over the years and built up a data base of tens-of-thousands of happy customers who liked to buy in bulk while supporting students.

After graduating university, my partner and I decided to set up a year-round home supplies company that would service all the customers we had accumulated through our student franchise network over the previous years.

From the onset, my days were spent running our warehouse and distribution center, and in the evenings, I called customers to solicit orders. We worked hard, and only four years later we sold the company to a major competitor who continues to operate the business to this day.

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hen I was 25 years old, someone tried to recruit me to join a multi-level marketing company selling water filters. Water filters were clearly a hot commodity.

Rather than join that company, I decided to start my own multilevel marketing company called “Clearbrook,” which also sold water filters that were manufactured in Birmingham, Alabama. The business exploded out of the gate, and we sold over $1million worth of water filters in our first 30 days in business! I thought I had made it big-time, however, little did I know that margins and commission structures of MLMs were things I really didn’t FEBRUARY 2021

understand. Instead of making millions, we were living on cash flow and barely breaking even.

The realization that I had not hit it big was certainly deflating, but I managed to pick myself up and reflect back on what I had learned in the process.

In 1994, noticing the very healthy vitamin industry, I pivoted and started looking for successful US vitamin companies that I could bring to Canada. I connected with a company called Body Wise International in Carlsbad, California. Within a few months, I had a joint-venture partnership in place with Body Wise USA to open and run Body Wise Canada.

Body Wise Canada quickly became one of Canada’s preeminent brands of high-quality, innovative products for good health, athletic performance, and weight loss.

In keeping with the vitamin theme, in 2000, I had a vision to open a very hip chain of retail stores that would not only sell a huge selection of reputable and professional vitamin brands but one that would also provide professional guidance and individual recommendations to customers by way of in-store, natural health care professionals.

I sold my stake in Body Wise and founded “elements” — a “before-its-time” concept in the natural supplements world, earning accolades by industry professionals, as well as a design award for our retail store concept.

Three retail locations were quickly erected in high-traffic areas in Toronto. The “secret sauce” was that each store was anchored by an in-store natural health clinic where customers could discuss their unique health needs with our naturopaths, who could then make recommendations of products that were sold in the store — a one-stop shop and first of its kind.

With a private equity firm already committed to backing us, elements was primed and ready to expand to 85 locations across Canada exactly when the .com explosion hit the world. Suddenly my super-cool chain of bricks and mortar stores was considered an antiquated concept as money started pouring into the .com space.

I then considered the successes and challenges that I had experienced along my journey

Stalco grew from shipping hundreds of orders a day to shipping thousands.

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PROFILE and decided to go back and focus on what I knew best: Bringing successful American direct-toconsumer brands into Canada including Suzanne Somers, Channoine Cosmetics & Shark Tank inventor Kevin Harrington to name a few.

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n 2010, a contact, who works in the call center business, asked if I would be willing to help a client who was having trouble shipping products to Canadians. This posed a conundrum: I had the expertise and infrastructure to easily assist this company with Canadian shipping, however, I only offered shipping and fulfillment to brands that I held an equity stake in, and whose Canadian sales I profited from. Now I was being asked to accept a fee for service.

After mulling it over, I realized that I could leverage my existing distribution overhead to take this company on as a fee for services client, rather than taking an equity stake. I took on the client and set up a turnkey service for them where my company would take care of everything related to importing their product, regulatory approval, fulfillment and shipping, leaving the client to focus on what they knew how to do best — sell.

The client’s business exploded in Canada and I realized that I had a lucrative business model sitting in my lap. I could be a service provider and, at the same time, I could amortize my existing overheads related to the products and brands in which I had equity.

This was a pivotal moment for me. I realized there was a huge opportunity to set up a Third-Party Logistics (3PL) company to provide turnkey services to American companies wishing to expand into Canada. This was the birth of the Stalco brand and the origins of my 3PL business. In essence, I successfully took a distribution platform that I had in place since 1994 and leveraged it to build out a service-based company that offers comprehensive 3PL services in Canada.

Stalco quickly grew from fulfilling and shipping hundreds of orders per day to fulfilling and shipping tens of thousands of orders per day.

❱ DMN.CA

Page and family dog Seymour take time to relax and enjoy their lives.

For example, Utah-based Xyngular Corp., which produces and markets the CORE4 products which are part of a proven and healthy weight-loss system, knew that historically, Canada had been a very successful international market for US-based direct selling companies. In fact, because of Canada’s close proximity to the US and its very similar demographics, the company’s distributor base was rapidly recruiting leaders from Canada and quickly realized that shipping from the US to Canada was not a sustainable long-term solution to service our Canadian Distributors or their customers.

There were a lot of things to consider when establishing distribution in Canada. Xyngular loved that Stalco is a “one stop shop”. Stalco specializes in the health and beauty industry and manages all of our Health Canada regulatory requirements and ongoing protocols. In addition, Stalco manages all of the logistics of importing and transporting

inventory to its distribution center, as well as providing standard third party fulfillment and distribution services. As a client of Stalco, Xyngular was also able to leverage Stalco’s low cost and creative shipping solutions.

With Stalco’s support, Xyngular was able to quickly automate the processes between its order management system and warehouse management system (WMS), allowing the company to seamlessly push order information to Stalco and receive package-tracking information back from them. Xyngular also has online access to Stalco’s WMS for complete real-time visibility of inventory levels, and other useful reports, to monitor and manage its business and ensure adequate inventory levels at all times. Stalco managed and facilitated the crossborder movement and regulatory/ compliant receiving of inventory from Xyngular’s suppliers into Canada.

Stalco operates and processes

orders seven days per week, which has served Xyngular well in achieving an overall average of 2-5 day delivery throughout Canada. To facilitate the quickest order processing turnaround times, Stalco works closely with the company on forecasting and pre-kitting inventory as required. Stalco also serves as its Canadian returns processing center managing the receiving, reporting, and restocking of eligible inventory.

In 2016, Stalco, spurred by demand from its clients (who wanted to service all of their North American customers from one warehouse, rather than having one in Canada and one in the USA) launched shipping services to the US, knowing that to succeed in the US market Stalco had to be able to offer competitive shipping rates and delivery times to customers.

With this in mind, we built out a solid platform to ship to the US, which today has grown to exceed 50,000 orders per week.

As I continued to look for ways to expand our offering, we launched a white-label on-demand inventory platform. We formulated and stocked 28 different health & beauty products that eCommerce marketers could purchase on-demand under their own custom brands. This platform tookoff and continues to be a significant and unique differentiator for Stalco. We label and ship over 40,000 health & beauty products per week through this platform.

In 2018, with trade tensions escalating enormously between China and the USA, we recognized an opportunity to further leverage our US shipping platform to assist companies in eliminating their duty costs. By leveraging something known as “Section 321 Customs Clearance,” companies are able to ship orders of less than $800 in value directly to their US customers from outside of the US, without incurring any duty or sales taxes, and without sacrificing shipping times or rates.

Our American clients jumped all over this concept and it took off right out of the gates. Our duty elimination platform continues to be a major driver of business growth. We work with a wide array of clients from multi-billion-dollar corporations to smaller, ownerFEBRUARY 2021

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PROFILE

Left to right: Shawna, Steven, Spencer, Skylar and Sydney.

operator Shopify shops.

Any fulfillment company that wants to play in the B2C fulfillment space must support eCommerce from all sectors of today’s world. For fulfillment companies, that means marketing themselves in a way that underscores the most important services they offer to their eCommerce clients, such as sameday order processing, fast delivery times and inexpensive/competitive shipping rates.

Stalco is a leader in the space with a broad service offering that includes fulfillment throughout Canada, the US and globally. Our service offering is robust and as a one-stop-shop includes everything an eCommerce company may need to manage the logistics of shipping their products from the manufacturing source right through to the end consumer.

Stalco achieves this by going the extra mile with clients and getting actively involved with the inbound logistics of picking up a client's inventory from anywhere in the world and ensuring it arrives at our facility where it will be received, stored and ready for day-to-day eCommerce fulfillment.

Fulfillment represents a critical component in the success of any FEBRUARY 2021

direct selling company. A company can have the best product, packaging and marketing in the world, but if their fulfillment is weak, the result, no matter how great the product, will be a bad customer experience. By outsourcing fulfillment, a direct selling company can concentrate on all critical items, such as product quality, packaging, customer acquisition, retention, pricing etc., while allowing an experienced fulfillment company to ensure that their customers get their orders in a fast and hassle-free manner. In addition, outsourcing fulfillment will almost always give a direct selling company access to better shipping rates and processing times than would otherwise be achieved on their own.

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echnology has played a very important role in Stalco’s success in the eCommerce fulfillment space. Stalco has leveraged technology to make it easy for an eCommerce company to integrate its shopping cart platform into its warehouse management software, so that orders can be automatically transmitted (in real time) and tracking codes passed back to the

eCommerce store. In addition, Stalco has leveraged technology to build-out custom software applications that make it easy for eCommerce stores to manage customer returns, which can represent anywhere from 5-10 percent of total eCommerce order volume. The ability to rapidly collect and process customer returns is a critical component for eCommerce companies to keep their customers happy and to avoid credit card chargebacks and negative reviews.

In the last quarter of 2019, I started to consider expansion opportunities for Stalco and began to think seriously about the possibility of strategic acquisitions.

To this end, I met with a number of companies, one of them being Canada Cartage. During our first in-person meeting, Canada Cartage was adamant that their fulfillment divisions were an integral part of their expansion plans and they would not consider selling them. However, a few weeks after that meeting, I received a call from them asking if I was interested in selling Stalco. I made it clear to them that I had no interest in retiring but that I was open to hearing with they had to say. Canada Cartage came

back with a very appealing offer that was based on them acquiring 100 percent of Stalco at an attractive price but leaving Stalco completely untouched to operate as an independent company, with me as CEO and the rest of my management team in their current key positions. On December 31st, 2020 the sale closed and we rang in the new year with lots of excitement and optimism for the future.

Today, Stalco employs more than 120 people and ships millions of packages across Canada, the USA and globally. In the fulfillment business, it is important to scope the opportunities and then pounce on them.

Looking back, the lessons I learned as a young boy selling soda pop in a basement stayed with me all my life. And I’m glad they did.

STEVEN PAGE was born and raised in Toronto, Ontario. He is a serial entrepreneur with 28 years experience in successful entrepreneurial ventures, 20 years specifically in the Natural Products/Nutraceutical industry. Page’s real entrepreneurial career started when he was in University when he co-founded a national franchise opportunity for university students called Student Supplies which was subsequently acquired and continues to operate today.

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ECOMMERCE

Consumer Attitudes, Behaviour

What You Need to Know for eCommerce

T

he past year or so has changed how we shop and how we think. As the world changes and as consumer behaviour changes with it, as merchants we must start to ask ourselves, very seriously, will our eCommerce strategy, tactics and technology be ready for 2021 and beyond?

As online merchants, Canadian businesses saw significantly more new-to-online customers in 2020, as well as an increase in sales from existing customers. This led to a very good year not just here, for most companies, but around the world and in North America in particular. eMarketer estimates that eCommerce sales reached a whopping $3.914 trillion in 2020.

What the eCommerce industry needs to know about how consumer attitudes and behaviour are evolving is a crucial element to future success. But as new demographics of online shoppers emerge, this sets the stage for difficult, interesting and important questions. While as merchants we may know to varying degrees our customers, do we now know what those customers think? Where do consumer attitudes stand right now? And how do these attitudes

and spending patterns vary between countries, ages, and genders?

One of the most extensive and revealing in-depth studies has been conducted by the eCommerce systems provider ClearSale, which partnered with Sapio Research to answer these questions and more. Whether your target buyer is here at home, or a 60-year old American women or millennials in Mexico, this research gives us new information on topics like: ❯❯ Why people shop online ❯❯ How important security is to your market ❯❯ What your customers think about eCommerce fraud This report, along with insights from ClearSale partners, provides deep insights on consumer behaviours and attitudes on how to build a better, more secure online shopping experience that delivers precisely what customers want.

In everything from openness to mobile shopping to the likelihood of boycotting a site after a false decline, there are distinct differences between each country’s shoppers that merchants should know and reflect in their online store.

Age and sex influence risk aversion in online shopping. In

Key Takeaways 2021 Global Report on Consumer Behaviours ❯❯

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The shift to online shopping will last beyond 2020 for 20 percent or more of global consumers Merchants should worry more about false declines than fraud; for every $1 in losses due to credit card fraud, merchants lose $13 to false declines.

High frequency/high spending shoppers are more likely to shop with overseas merchants – 69 percent+ Only 40 percent of eCommerce shoppers have their credit card within easy reach while shopping, so merchants should welcome mobile wallets and other payment options.

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pursuit of a good deal on an item, 35 percent of men are willing take more fraud risk. The cut-off age for a high level of concern about fraud in online shopping is 55. And that’s just a small nugget from the bigger (and deeper) picture.

1. The Big Picture of Consumer Behaviours The research revealed there are overarching trends and noteworthy items that apply to online consumers in general.

Here’s what was learned by zooming out to look at overall consumer attitudes and behaviours with online shopping. Fifty-nine percent of respondents who shop online once or twice a week say they have been shopping more frequently in the last six months.

Even infrequent shoppers are going online more often; among shoppers who only buy online once a month, almost 30 percent said they have shopped more frequently in the last six months. Only 14 percent of consumers are shopping online less often.

What are some of the reasons for these shifts? For those shopping online more often, people were staying out of stores and shopping from home during lockdown periods.

“In many ways, retail has been reinvented,” says Neil McHugh, Senior Principal Product Manager Neil McHugh at Oracle CX (a ClearSale partner). “In the last six months, multiple studies have indicated five to seven years’ worth of growth in just the last four months in the eCommerce space.”

But what of those who are shopping less? Financial anxiety and soaring unemployment figures

are a likely explanation for the 14 percent of respondents who are putting fewer items in their carts.

Are these changes here to stay?

“These changes will shift back to some degree,” says ClearSale’s Senior Director of Marketing, Sarah Elizabeth, “But certain Sarah Elizabeth segments will find themselves with a permanent increase in eCommerce volume.”

Consumers have learned to love the convenience of online shopping — and delivery — for heavy and bulky items, as well as for non-emotional, everyday purchases such as cleaning products and beverages for example. This concurs with the results of a survey by McKinsey that showed projected growth in online sales of items like groceries, household supplies, over-thecounter medicine, snacks, personal care products, and tobacco.

Not all industries will see the same level of consumer behaviour in 2021. To gain some extra insight, we spoke with McHugh for deeper, industry-specific insights and predictions.

Consumer electronics is experiencing a huge explosion.

“For a while, we were seeing some market saturation,” says McHugh.

“People weren’t as worried about buying the latest or newest.

But with the pandemic’s drive to eCommerce combined with everybody being home more, there’s an uptick in consumer electronics.”

Fashion and luxury are industries where consumers will expect more and more personalization. “But that means they’ll have to give more data,” adds McHugh. “So there has to be a certain confidence level there.

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ECOMMERCE But that can also help in areas like inventory and returns.”

Automotive is going to see a huge increase in B2B, according to McHugh: “There’s an incredible amount of green space in automotive B2B, and we anticipate it will grow exponentially over the next three years. So how do we ensure that B2B eCommerce clients are protected as well?”

Travel and airlines have been heavily impacted by COVID, but this eCommerce segment may see people deciding to use their loyalty points for other purchases. “People are looking to use their incentive points in non-travel ways,” adds McHugh. “So, there is some level of opportunity there for an eCommerce boost.”

How consumers are shopping today Does your website suit how customers browse and buy from your store? Fifty percent of consumers are most likely to use a tablet or mobile phone when visiting your online store, so a bad mobile experience immediately impacts half your potential market.

Can your customers pay the way they want to? Only 40 percent of eCommerce shoppers have their credit card within easy reach while shopping, so accepting payments via e-wallets and other methods can help keep more of those customers in the checkout flow.

In fact, alternative payment options have seen a boost in usage during the pandemic and may help

speed up the transformation of some shopping experiences.

For example, the Halifax Wanderers, the Canadian professional team, is working with payment processing company Sona to develop Ryan O'Leary an app with a rechargeable mobile wallet for in-stadium ordering. Ryan O’Leary, CEO of Sona explains, “Instead of waiting in line at halftime with everybody else, fans can grab their device, go to the mobile app, and order right from the stands. Then the food is brought out to them — no cash, no credit, no waiting in line.”

McHugh adds, “One of the big trends we’ve seen in eCommerce over the last couple of years is people want payment options. Just offering PayPal is fine for some, but not for everybody. So flexibility is important, while still being tight on security and fraud prevention.”

Easy, one-touch payment experiences are especially appealing to younger demographics, which is why it is important for eCommerce merchants to put themselves in customers’ shoes when developing their storefronts and identifying the right payment options to offer.

However, with the increase in mobile wallets and mCommerce can come an increase in fraud risk, according to McHugh.

“People are conscious of security on their home PCs and laptops,” he notes, “but there isn’t the same mentality with mobile. And yet, people have their banking apps on there, their insurance app on there, their Amazon account — all these things that are tied together. And they’re not thinking about their data security.”

Fraud and the consumer experience Sharing their precious financial information on the web is still a concern for online shoppers. A full 90 percent of respondents say security is very important to them when shopping online.

“People are looking for personalized experiences,” says McHugh. “But to have that personalized experience, you need to give people your information. So you can’t have a conversation about personalization in eCommerce without also talking a out fraud and security, because people are concerned about it.”

That concern directly impacts shopping behaviour. Seventy-nine percent of respondents would be more likely to buy online if the merchant had fraud protection and 46 percent would shop online more frequently if they were not afraid of fraud.

Reports of large-scale breaches and legislation like the EU’s General Data Protection Regulation (GDPR) have heightened focus on data privacy.

As online consumers weigh the risks of online activity, 51 percent believe that fraud protection is

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ECOMMERCE more important than data privacy.

Interestingly, while 42.25 percent of respondents have experienced an incidence of online fraud, 78 percent say they feel “just as” or “a lot or somewhat” more safe shopping online compared to brick and mortar. While that might sound counterintuitive, most consumers have not had to bear the consequences of online shopping fraud — and therefore may have a false sense of security.

As Rafael Lourenco, Executive Vice-President at ClearSale notes, “In a card not present transaction, the financial liability is on the merchant side, not with the consumer.

In that situation, banks reimburse Rafael Lourenco consumers easily. With brick and mortar transactions, the financial liability is on the bank or card issuer, not the merchant. Banks are less open to reimbursing consumers for transactions at brick and mortar retailers, as a card would have needed to be present for the transaction to take place.”

However, the security consumers may feel with online shopping is not all-encompassing. If you’re not a big brand name or one of their trusted sites, you’ll need to make it clear to consumers, upfront and center, that you take their data privacy seriously. For merchants, delivering on this promise of fraud protection comes with a catch-22: Stronger fraud protection often means more legitimate orders are falsely declined. And false declines bring costs to the merchant that go far beyond just the loss of the transaction.

False declines come at a high price for E-Tail merchants Most automated fraud programs are built on fraud scoring and fraud filters designed to catch and autodecline any order the program thinks might be fraudulent; we describe the process here. But research shows this cure may be worse than the disease.

Up to 90 percent of declined transactions are actually legitimate orders. This means an enormous amount of revenue is lost due to over-zealous fraud programs. In fact, for every $1 in losses due to credit card fraud, merchants lose ❱ DMN.CA

$13 to false declines.

And that’s just the tip of the iceberg. Merchants often take another hit in the way consumers react when they are falsely declined. Thirty-nine percent of respondents say if a merchant declines their payment, they will never place an order with that merchant again. And 28 percent say they go to social media to express their displeasure, potentially causing irreparable damage to the merchant’s brand name.

“False declines cost merchants more than lost order revenue,” explains Lourenco. “They create a negative customer experience and can drive customers away for good, so merchants lose lifetime customer value.”

2. Consumer Behaviours Online

by Spend

Merchants must balance site security and fraud protection with the need to make their online shopping experience as frictionless as possible. Customer experience is a key differentiator for online merchants, and false declines are just one of the factors that impact how consumers feel about shopping on your site. End-toend protection against a broad spectrum of eCommerce fraud can protect your revenue and serve your customers better. Now that we’ve seen the big picture, let’s look at more segmented data and dive deeper into precisely what your market thinks.

themselves to shopping online once every few months.

Does geography play a role in who spends the most? For big spenders, U.S. and Mexico top the charts, followed by Australia and Canada, with the U.K. trailing.

Expectations for these consumers have been set by the seamless online shopping experiences they’ve had on sites like Amazon. Once consumers have seen one-click checkout, personalized product recommendations, shipping time visibility and other features, they notice the difference when these features aren’t offered.

The good news is that when it comes to online spending, shoppers spread the wealth across categories. Whether they spend $2 a month or $1,000, consumers are equally likely to make online purchases of beauty supplies, books, electronics, fashion, home goods, pet supplies, and sporting goods/leisure.

Unsurprisingly, the smallest category right now is travel. Keep in mind this metric doesn’t consider income — only how much people spend online. Most people who spend a lot online do so frequently: once or twice a week. Only 10 percent of big online spenders limit

In essence, eCommerce merchants must ensure that every aspect of their customer’s experience, from site speed to filtering options are intuitive, pleasant, and convenient.

As O’Leary of observes, another must-have for a positive customer experience is speed and reliability of transaction processing: “Merchants need current technology that’s going to make it faster for consumers to pay, and a level of support and training on how to use that technology.”

Where and how consumers shop online (by spend) Because high spenders are old hands when it comes to online shopping, they also feel more comfortable

online shopping in general, and they extend that comfort level to buying from overseas merchants.

Those spending $260U.S. or more had the most confidence in overseas merchants: No matter where in the world you operate, 52 percent of consumers order from both overseas and local websites. This means that for half of your high-spend customers, the origin of your site is not the most important factor.

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of friends, and all their likes and dislikes, the answer would clearly be no. But when each piece of information is shared, not at once, but accumulated across individual posts, restaurant check-ins, likes, etc. it doesn’t feel as intrusive.”

3. Consumer Online Shopping Behaviours Baseball, apple pie, and “add to cart”: Americans shop online most frequently, followed by the U.K. But America is big, and its eCommerce market is complex. The U.S. and U.K. are trailed by Mexico, Canada, and Australia when it comes to their monthly average spending. spent online and concerns about fraud and data privacy, but our findings reveal a mixed, and sometimes conflicting, picture.

As consumers spend more, their concern about fraud increases — but their concern about data privacy does not.

The lure of a low price seems to be one reason for this conflict.

Forty-six percent of respondents say getting a good deal on quality items is more important than a secure website. (And yet, 89 percent of those same people say security is “very important” to them when shopping online.

Evidently, it’s only important until it costs them money.) Only 26 percent of the low spenders would take the risk for a good deal. Logic would tell us that those with the lowest amount of money to spend would be more interested in getting a good deal, no matter what. But in fact, it’s the opposite. Lower spenders are willing to walk away from a great deal if the website doesn’t give them confidence.

Why are people less concerned about data privacy as they spend more? It can likely be explained by the “boiling frog” effect: Put a frog in a pot of boiling water and it will immediately jump out — but put the frog in a pot of cool water and slowly increase the temperature, and the frog won’t notice it’s slowly boiling to death. Similarly, slowly ask people for small bits of information over the course of many years, and their inner alarm never sounds.

Lourenco explains: Because higher spending/frequent FEBRUARY 2021

shoppers have typically experienced positive service levels across multiple online merchants, they have a low tolerance for what they perceive as poor treatment.

Forty-five percent of high-spend eCommerce shoppers say they would complain on social media after a false decline, and the same percentage would never shop with that merchant again. Shoppers on the lower end of the spending scale seem much more forgiving:

Only 21 percent would go to social media. However, that may also be because these shoppers may have less of an online presence — and in fact these consumers may very well be telling their friends and family in person about their poor treatment.

“Had you asked people in the past if they would be willing to share online their family’s information, home address, their geo location at all times, their circle

Where and how consumers shop online by country The market may be international, but U.S. and U.K. consumers tend to stick fairly close to home. The availability of a large variety of products at a range of price points from domestic merchants may explain why consumers in these regions are the least likely to order from overseas. Consumers in Mexico, Australia, and Canada, on the other hand, have no such

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There are also significant differences in what device people use to shop. Mobile shopping has made much more headway with U.S. consumers than Canadian ones: 63 percent of U.S. consumers are most likely to use a mobile device when shopping online, compared to only 39 percent of Canadians.

This variance is not due to a lack of access, however. Smartphone penetration in Canada currently stands at 83.14 percent, not far behind the United States’ rate of 89 percent. Check the Canada Profile: The Guide to ECommerce in Canada (page 22). Explore some of the challenges involved with eCommerce in Canada, the risks of online payment fraud and some tips for preventing fraud, while selling into Canadian market.

Australians show a similar reticence to Canada. Despite a smartphone penetration rate estimated at close to 80 percent in 2020, only 25 percent of online sales in Australia were being made through mobile devices in 2019, and 63 percent of Australians still prefer desktops or laptops for eCommerce transactions.

Fraud and the consumer experience by country Interestingly, consumers in Mexico and the U.S. are aligned not only in the amount they spend online, but in their perceptions toward security. Forty percent of Mexicans and 28 percent of Americans think retailers are “overly cautious” when it comes to data security.

This metric in every other country is in the teens. This difference may be attributed to a common belief among Mexican and U.S. consumers that online shopping is “a lot or somewhat safer” (46 percent for Mexico and 45 percent for US). Consumers in Australia, Canada, and the U.K. are only at 25 percent, 28 percent and 27 percent respectively.

They’ll still perform a certain amount of due diligence, however: 64 percent will read website reviews before shopping (U.K. shoppers are least likely to do this – only 34 percent will bother looking up reviews.) The question is: What amount of due diligence on behalf of the merchant is acceptable to the consumer? Americans, for ❱ DMN.CA

one, value convenience but are willing to accept some electronic monitoring and assessment as they shop if it keeps them safe. Most even say they’re OK with using two-factor authentication.

In the U.K., eCommerce merchants are particularly cautious when it comes to data security, in no small part due to the massive potential fines for GDPR violations.

“In Europe, fraud and personal protection have become mandated by law,” explains McHugh. “And if you break that law, your company will get fined millions of dollars a day. So merchants will be diligent no matter what.”

about the whole thing. Those polite Canadians, though? They take serious offense when falsely declined and are much more likely than Americans to boycott a retailer after a false decline or fraud experience. Australians are also likely to hold a grudge.

Despite women often being portrayed as more frequent shoppers, men actually take the lead when it comes to eCommerce: Men shop online more frequently, and that frequency has increased more for men (44 percent) than for

While country and gender showed little variation in how people buy online, age segmentation reveals significant differences. Notably, people over the age of 55 are much less likely to buy beauty supplies

Requiring registration prior to checkout, however, is where many shoppers draw the line. If you ask Australian or American shoppers to create an account, they are more likely to jump ship (or abandon cart). Mexicans are pretty unflappable about a fraud experience, but false declines?

Not so much. As merchants contemplate accommodating additional payment methods, it’s important to keep in mind the heightened regulations as a result of the EU’s General Data Protection Regulation (GDPR).

Effective in September of 2019, the Payment Services Directive 2 (PSD2) of the GDPR requires that Strong Customer Authentication (SCA) be applied to all electronic transactions in the European Economic Area (EEA).

And what of false declines?

Americans are fairly understanding

women (36 percent).

By a significant margin (14 percent), men are more confident in making purchases from overseas merchants: In pursuit of a good deal on an item, 35 percent of men are willing take more risk than women with a site that doesn’t offer top-flight security measures: Men also spend more during their online shopping forays; over 50 percent spend over $65 per month.

Previous research by Sapio revealed where men’s online dollars go: Men make more technology-based purchases than women (49 percent vs. 31 percent).

Because men are a bit more cavalier when it comes to eCommerce fraud, they also have less patience for fraud prevention efforts and are much more likely to take to social media if a victim of a false decline. Women, on the other hand, are more cautious —

online and are much more likely to buy home goods. This may be explained by the fact that people over the age of 60 are less likely to buy decorative cosmetics or fragrances via traditional shopping, so it’s no surprise this would affect online numbers as well.

In general, people over 55 shop online less frequently and stick to local sites. This is not particularly surprising, as personal computer use only became widespread in the mid-1980s: Older members of the 55+ group may not even have a computer or may have only obtained one after retirement.

Because of this unfamiliarity with the digital landscape, only 31 percent of the 55+ group feel “very confident” purchasing from overseas merchants. In fact, 29 percent feel very unconfident.

Conversely, when asking people under 55, only 12 percent do not

4. Consumer Behaviour

by Gender

and much more forgiving if an eCommerce merchant’s caution causes them to be falsely declined.

That being said, more than a third of women would still post a negative comment on social media, so merchants should still make sure their fraud prevention is as accurate as possible while still being robust.

5. Consumer Online Shopping

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feel confident shopping overseas.

In short, any international merchants looking to woo the 55+ market has work cut out for them when it comes to making sure sites are both secure and re-assuring.

Fraud and the consumer experience by age In keeping with their cautious natures, older consumers embrace merchants’ efforts when it comes to fraud prevention and data security. Only 10 percent of shoppers over 55 think retailers are “overly” cautious with data security, as opposed to 30 percent of shoppers under the age of 55.

McHugh agrees: “ECommerce sites catering to older consumers need to not only make their site ultra-secure, but also should spend time/money to ensure their site looks reputable as well. “Younger consumers have grown up with a comfort level around having personal information online. Older folks grew up in an age of privacy, so security is a big deal. In general, older consumers tend to be direct with their feedback as well.”

“Older consumers may have a longer standing relationship with certain merchants, so being flagged as a false decline may feel

like a betrayal. ‘How dare you, I’ve been your customer for 33 years!’”

Digging deeper in the reasons why, O’Leary of Sona notes there is a difference between fraud (which can happen to anyone and is a known possibility when doing business online) and a false decline (which feels more personal, especially if it comes from a longstanding merchant).

There is a surprise in this data, in that older consumers are actually more forgiving than the younger cohort if fraud does happen; only 5 percent would write off that retailer. There is also a marked difference in the likelihood to make a negative social post.

How merchants can keep consumers happy and safe Now that we’ve taken you inside the minds of consumers, what should you DO with this information? Unless you are targeting a very narrow audience (i.e., Mexican men under 55 looking for a great deal on a fragrance purchase), the data confirms that for a majority of likely shoppers on your site, fraud protection will be among their top concerns — and therefore should be yours as well.

Regardless of the markets you serve, there are best practices you can apply that will help you find the sweet spot between reducing friction in transactions while protecting against fraud: ❯❯ Be cautious when it comes to automated fraud filters. Not only do they fail to account for human variance (for example, your best customer shopping while on vacation in a foreign country), but if they are layered incorrectly, they may cancel each other out. ❯❯ Site design and functionality can make a massive difference not only to the customer experience, but to the perception of security.

Even something as simple as letting customers know they’re going to a secure checkout can help allay fears. ❯❯ Once a customer enters their shipping and billing information, give them the opportunity to save that information with a secure password. It will make their future shopping more secure while also saving them time and effort. ❯❯ Manual review of flagged orders can vastly reduce the risk of costly false declines.

The key is to partner with a fraud protection company who is customer-focused and can make the identity verification process fast and pleasant.

It’s also important to make sure you work with a fraud protection partner that understands the concerns and motivations of your distinct customer segments and knows how these attitudes manifest in behaviour. Fine-tuning your customer experience to the preferences and expectations of your shoppers makes fraud prevention much more accurate and less likely to harm that experience.

For more information, or to obtain the full 2021 Global Consumer Behaviour Analysis report, contact ClearSale at www.clearsale.com This report is largely based on the report and is used with credit to the authors and the contributors.

RAFAEL LOURENCO is Executive Vice President and Partner at ClearSale, a card-not-present fraud prevention operation that helps retailers increase sales and eliminate chargebacks before they happen.

SARAH is a Senior Director of Marketing at Clearsale and has developed deep knowledge about fraud prevention.

RYAN O’LEARY is CEO of Sona.

NEIL MCHUGH is Senior Principal Product Manager at Oracle CX.

Responsive, active audience. Traffic and leads.

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What the Research Shows When Americans Turn to Canada

W

hen US-based eCommerce businesses look to expand internationally, Canada is the logical next. For any eCommerce merchant interested in growing its footprint in North America, we’re the significant option.

ECommerce was growing rapidly there even before the COVID-19 pandemic. But the pandemic and its associated stay-at-home orders triggered an eCommerce explosion which is converting millions of Canadians into permanent and enthusiastic online shoppers. What does that mean for your business?

Canada has close cultural and economic ties to the U.S., the Canadian eCommerce market varies in typical Canadian consumers’ buying habits, as well as key opportunities for eCommerce merchants.

Internet and eCommerce penetration in Canada As is true in the U.S. and other developed countries, Canada has ❱ DMN.CA

become an online culture. Eightyseven percent of the population — nearly 30 million people — are internet users. Seventy-nine percent of the population uses a mobile device. A little more than half of the Canadian population (52.7 percent) are eCommerce customers.

Compared to eCommerce shoppers in the U.S., Canadians are equally as likely to buy fashion, electronics and technology, and books online. But Canadians are less likely to purchase sporting goods, pet supplies, and beauty supplies online.

ECommerce growth in Canada The eCommerce market in Canada has been growing steadily for the past half-decade or more.

Total retail eCommerce revenue in Canada grew from about $22 billion in 2017 to $28.4 billion in 2020. By 2024, eCommerce revenue is projected to exceed $36.5 billion.

How COVID-19 has affected the eCommerce market in Canada Like most of the world, Canada went into lockdown in the spring of 2020 in an effort to arrest the spread of the coronavirus that causes the disease COVID-19.

Brick-and-mortar retail shopping came to a halt throughout most of the country, inspiring more consumers than ever before to try eCommerce.

The result was a massive surge in online sales that one observer called a “digital tipping point” for the country. Online revenue doubled between March 11 and the beginning of April 2020, with all sectors seeing a combined uptick of 99 percent.

During the coronavirus pandemic, online sales increased in the following categories: ❯❯ Sporting goods (+105 percent) ❯❯ Furniture and home décor (+106 percent) ❯❯ Food and restaurants (+160 percent) ❯❯ Appliances, electronics, building

materials, and DIY (+161 percent) Meanwhile, the apparel category grew by a mere 21 percent, perhaps because that category already saw a significant amount of online sales.

As late as June 2019, Canada’s eCommerce market was considered “developing.” With the explosive growth in sales and customers brought on by COVID-19, however, it appears as if the Canadian eCommerce market has fully arrived. More and more Canadians, it seems, have experienced the ease of online shopping; many of them have become eCommerce customers for life.

ECommerce shopping habits and demographics in Canada A Canada Post survey of 5,000 eCommerce shoppers in Canada revealed some interesting trends.

Broken down by age group: 37 percent of Canadian online shoppers are baby boomers

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❯❯

❯❯

(between the ages of 53 and 72).

25 percent are members of Generation X (between 38 and 52).

28 percent are millennials (between 24 and 37).

The average annual household income for online shoppers in Canada is $102,306 (in Canadian dollars). According to the Canada Post survey, online shoppers in Canada are: ❯❯ 49 percent male and 51 percent female. ❯❯ 41 percent urban, 38 percent suburban, and 21 percent rural.

Canada Post also reported on the online shopping frequency of its survey participants. ❯❯ 37 percent said they shop online occasionally, two to six times per year. ❯❯ 24 percent said they shop online frequently, seven to 12 times per year. ❯❯ 16 percent considered themselves “power” shoppers, making 13 to 24 online purchases per year. ❯❯ 10 percent qualified for the “hyper” category, reporting 25 to 40 purchases per year. ❯❯ 8 percent were “hyper-elite,” having made 41 or more online purchases per year.

The hyper and hyper-elite segments represent only 18 percent of all Canadian online shoppers, but they account for 60 percent of purchases.

However, Canada Post found that 32 percent of Canadians say they’ll shop online more in the coming year.

In March 2020, ClearSale commissioned Sapio Research to survey over 1,000 Canadian consumers who shop online at least once every few months.

Among other things, the study discovered that: ❯❯ 49 percent of Canadian online shoppers spend less than $65 (U.S. dollars) online per month. ❯❯ 44 percent spend between $65 and $259 each month. ❯❯ 7 percent spend more than $260 (compared to 20 percent of Americans).

The most common comment from Canadian consumers says they shop online because of the wider FEBRUARY 2021

selection. The next most popular reason for shopping online is because it saves time.

exact opposite is true; 15 percent say they buy from the U.S., and 39 percent say they buy from Canada.

Key Benefits With its high internet penetration rate and technology adoption, the benefits of doing business in Canada are similar to the benefits of selling in the U.S. or any other developed country. The customers are online; it is simply a matter of understanding their preferences and shopping habits.

Companies based outside of Canada can be buoyed by the fact that a major portion of eCommerce spending by Canadian consumers — 45 percent — goes toward non-Canadian websites. One-third of the total is spent in the U.S., with most of the rest going to Asia and Europe.

When asked why they shop from foreign merchants, a plurality of Canadians (41 percent) cited lower prices. Other reasons included: ❯❯ Selection (23 percent) ❯❯ Free or discounted shipping (17 percent) ❯❯ Ease of shopping (7 percent) ❯❯ Brand name recognition (7 percent)

The challenges of eCommerce in Canada As we noted above, merchants can't expect to directly transpose their eCommerce operations from the U.S. or other markets to Canada. Selling profitably in Canada requires overcoming some unique challenges, such as competition with Amazon.

As have consumers in the U.S., Canadians have fallen hard for the ease, selection, and low cost of shopping on Amazon sites. Amazon.ca is the most popular online store in Canada by a wide margin.

Interestingly, Amazon competes with itself in Canada.

Amazon.com (the company’s U.S.-based site) is the secondmost popular online shopping destination for Canadian consumers.

20% of Canadian online shoppers spend less than $65 a month Data from a 2018 survey conducted by the Canadian Internet Registration Authority and reported on by eMarketer indicates that Canadians prefer to shop across borders for less expensive items and shop domestically for big-ticket purchases. When the order value is less than $100 (Canadian dollars), 42 percent of survey respondents say they buy from U.S. sites, and 15 percent say they buy from Canadian merchants. When the value exceeds $500, almost the

eCommerce purchases, and most merchants oblige. However, in a country as large and as sparsely populated as Canada, getting purchases to consumers quickly and affordably isn’t always easy.

And the notoriously inclement weather of Canada doesn’t help.

38% of Canadians won’t order again after a payment false decline

Internet shopping and research habits Canadians tend to use the internet more to learn about products and brands than for actually purchasing products. As of January 2018, 73 percent of Canadian internet users said they had looked online for details about stores or businesses. Only 46 percent said they had bought a product or service online on a weekly or monthly basis.

The impact of COVID-19 on spending Canadians are buying more online due to COVID-19, but overall, they are spending less on retail shopping.

According to a recent Deloitte report, Canadian consumers are focused on the essentials.

“Looking ahead, 21 percent of Canadians expect to spend more on groceries,” the Deloitte analysts wrote. “A whopping 69 percent say they’ll make up for that by reducing spending on entertainment, while 44 percent will cut their spending on apparel and footwear — though perhaps this isn’t entirely surprising as an entire nation is asked to stay at home unless absolutely necessary.”

Canadian consumers expect low-cost or free home delivery for

ECommerce fraud in Canada The explosive growth in eCommerce activity in Canada we discussed earlier will undoubtedly be accompanied by a similar increase in eCommerce fraud. We already see some signs of it.

Between 2010 and 2015, the cost of card-not-present (CNP) fraud on Canadian cards skyrocketed from $176 million (Canadian dollars) to $537 million (according to the Canadian Bankers Association Payment Card Partners Working Group). Visa reported in 2017 that 74 percent of all fraud perpetrated on Canadian accounts was CNP fraud.

Consumer attitudes about CNP fraud Compared to 13 percent of Americans, 26 percent of Canadians say online shopping is somewhat or much less safe than brick-and-mortar retail (according to the ClearSale survey).

This level of caution may reflect the slower rates at which Canadians have adopted online shopping. Still, it underscores the need for any business entering Canadian eCommerce to provide an overtly safe and secure experience. Canadians, in general, appreciate fraud prevention efforts. Seventy-seven percent of survey respondents told Sapio Research they would be more DMN.CA ❰

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likely to shop online from vendors that offer fraud protection. When CNP fraud occurs, merchants (in Canada and everywhere else) are typically subject to chargebacks.

A chargeback is initiated when a cardholder notices an unauthorized payment on their account. The cardholder will notify their card-issuing bank. If the bank determines the claim is legitimate, the bank will refund the payment and debit the merchant — usually with an additional fee.

Chargeback fees can range from $50 to $100 or more per transaction. The more chargebacks a merchant incurs, the higher their fees will be. In some cases, banks will remove a merchant’s ability to accept credit card payments entirely.

41% of Canadians will shop from foreign vendors for lower prices To prevent chargebacks and other fraud-related damages — such as harm to their reputation — eCommerce merchants doing business in Canada have four basic options for fraud protection: 1. Fraud Filters Fraud filters are provided by eCommerce platforms and are designed to identify potentially fraudulent orders and stop them from being processed. Fraud filters can function a number of ways, such as by: Limiting how many sales can be submitted to a website during a given time period; using an address verification service (AVS) to ensure shipping and billing addresses line up; flagging or blocking transactions that occur during specified timeframes; checking for errors with the card verification value (CVV) submitted; flagging ❱ DMN.CA

high-dollar sales that fall outside the merchant’s typical range. Looking for IP address mismatches is also vital.

While these common filters can prevent a high amount of fraud, they may also stop even more legitimate transactions.

When a fraud prevention measure denies a legitimate transaction, it is called a false decline. We explain the risk of false declines in Canada below.

2. Manual Review An alternative to automatic fraud filters is manual review, which is just what it sounds like: a team of individuals reviewing each transaction (or a selection of transactions) to detect fraud.

Human fraud experts tend to be better than machines at understanding context. Trained fraud experts can look at each situation individually instead of blindly adhering to preset rules.

However, manual review is very time-consuming and resource intensive.

A drawn-out manual review process can annoy customers who are eager to complete their orders.

3. Machine Learning/ Artificial Intelligence Software that relies on machine learning or artificial intelligence (AI) can provide a fast and reliable way to screen out fraud. These applications rely on mathematical algorithms and data to identify fraud trends and patterns. Because no humans are involved, machine learning is scalable and consistent, applying the same level of scrutiny to every transaction. Unfortunately, like “unintelligent” fraud filters, machine learning can be inflexible. Algorithms can also miss new types of fraud that haven’t yet made it into the algorithm’s database.

4. Fraud Managed Services Fraud managed services is a “best of all worlds” approach that combines cuttingedge automated technology (including advanced fraud filters and machine learning) with expert manual analysis. At no point is an order automatically declined. Instead, when the automated system flags an

order, the order is passed on to the team of experts who use their knowledge of human behaviour and the latest fraud trends to make a final call. The human analysts can flag new trends for insertion into the AI’s algorithm, thereby helping the machine learn faster.

The risk of false declines in Canada False declines are a risk anywhere merchants use automated fraudprotection rules. In fact, false declines can be much more costly to businesses than fraud — up to 13 times as much. This is largely because false declines tend to drive customers away from shopping sites, into the hands of competitors, sometimes never to return. In high-risk industries, merchants may tighten up their fraud rules, only to lose even more money to false declines.

In the ClearSale survey of 1,000+ Canadian online shoppers: ❯❯ 38 percent of respondents said that they would never order from that merchant again if a merchant declined their payment. (Compared to 33 percent of Americans, who appear to be slightly more forgiving.); ❯❯ 38 percent of respondents said that they would never order from that merchant again if a merchant declined their payment; ❯❯ 25 percent said that would likely post a negative comment on social media after having a transaction denied by a merchant; and ❯❯ 46 percent said they would not even try one more time if a merchant declined their payment. Instead, they would move on to another merchant.

While Canadian consumers are wary of fraud and dislike false declines, they still expect a smooth and easy checkout process. Eightyone percent of Canadians said they would not proceed with a purchase if they were asked to send copies of documents to confirm an order. Sixty percent said they would not proceed with an order if they were asked to call customer service to confirm, and forty percent of Canadians said they

have abandoned a purchase online because of a checkout process that was too long or too complicated.

What fraud analysts look for in Canada In markets like Canada, fraud analysts typically see the same fraud trends over and over again.

The fraud experts at ClearSale tell us that account takeovers — the unauthorized use of someone else’s personal information online — appear to represent most of the eCommerce fraud in Canada. Typical indications of an account takeover include the use of anonymous proxy servers and mismatches between the country and area of the IP address and the billing address.

Fraud analysts also keep their eyes out for high-risk email addresses and high-velocity patterns between transactions.

Analysts report a clear increase in cases of “friendly fraud” in Canada. Friendly fraud occurs when the customer makes an online purchase with their own credit card and then requests a chargeback from the bank or financial institution after receiving the item or service in question.

Another trend analysts have noticed in Canada (and now spreading to the United States) is that companies may experience extremely high volumes of suspicious transactions under the same billing customer but with different receivers and shipping information. In some markets, cases like these might be seen as clear fraud, but they may also indicate authentic resellers.

These are the kinds of cases in which human observation and active analysis of the different variables and the visualization of patterns is necessary. Otherwise, many of these legitimate transactions could be categorized as fraud attempts.

To be successful in the Canadian market, merchants need a fraud prevention solution that stays one step ahead of the most sophisticated fraudsters while eliminating false declines and giving customers a seamless shopping experience.

SOURCE: ClearSale Special Report on Canada

2021 FEBRUARY 2021

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How Nonprofits are Cutting Off Their Noses to Spite Their Faces

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GoFundMe Statistics, one out of five donors also share a campaign following their donation. Each gift averages around $15, which in many cases can equate up to 50 percent of a campaign’s donations by volume. Another reason is that Crowdfunding is emerging as a promising alternative to complement traditional fundraising efforts. The GoFundMe crowdfunding platform has raised over $3 billion dollars since its launch in 2010. Mini-donations (donations between $0.25 and $10) were the most common amounts.

Mobile and mini-donations now go hand-in-hand Mini-donations have tremendous potential for charitable fundraising, especially via mobile giving technology allowing young donors to give directly from their smartphones. With a target audience of 3.5 billion mobile smartphones users globally, mini-donations are now a must for all charities.

People are more likely to donate money if there’s an easy way to do it.

Here is another reason to counter high credit card transaction fees. Through easy-to-use smartphone apps, like ApplePay, and platforms like Google One* and Spotfund**, the act of giving has been further simplified and can be as easy as a tap on your smartphone.

Finally, while large donations may still make up the lion’s share of your revenue, the future of philanthropy is giving us clear signals towards the power of mini-donations. As your organization prepares for the year ahead, the most important takeaway from this is to not ignore mini-donations.

I have been advocating that for years. Remember, not all donors like to receive the same types of communications, just like not all donors want to 13-07-04 10:43 AM give the same way. Mini-donations give your donors the power of making a difference with their dollar and their voice. Don’t shut them out.

BILLY SHARMA is the principal of BKS Fundraising/Designers Inc. in Toronto. *

Google’s new application called One Today, allows people to donate $1 to different organizations, while getting the complete information about how your donation will be used up front. This is a huge stumbling block for nonprofits usually, as people are afraid that their money won’t actually get spent on making a real difference. One Today aims to change that. Additionally, One Today has a social component to it, letting you set a cap to how much money you’ll match if your friends donate to a cause.

** Spotfund, New Mobile App, lets you donate only $1, $2 Or $3 to causes and current events.

// 26

FUNDRAISING

How Nonprofits are Cutting Off Their Noses to Spite Their Faces

BY BILLY SHARMA

T

he donation amounts most discouraged by charities are those very small gifts or mini-donations. Minidonations are $3 or $5 or $10 amounts. Nonprofits vigorously discourage them right in their donation forms by stating in black and white: Receipts will be issued only for donations of $20 or $XX (depending on each charity).

However, what these small gifts lack in size, they make up for in impact, both for nonprofits and for the wider mass of donors who may have been touched by the charity’s vision in a targeted direct mail or a social media appeal.

So why are mini-donations being ignored or shunned by nonprofits?

Most claim it’s too much of a hassle to deal with them. To which I ask: Really? Is your staff who are in charge of accepting and documenting gifts too busy to even acknowledge them? As it is, most nonprofits are guilty of not acknowledging all gifts in a timely manner. Some charities take weeks to acknowledge a gift.

That shameful practice is further being compounded by also discouraging mini-donations.

The power and importance of mini-donations For nonprofits, a $1 or $3 gift won’t change much, but 500 or 1,000 of ❱ DMN.CA

these mini-donations of $1 or $3 could make a big difference to your organization financial bottom line.

Think about that.

When UNICEF (United Nations International Children’s Emergency Fund) ran an ambient campaign in New York selling contaminated bottled water in vending machines, laced with malaria, cholera, typhoid, dengue, hepatitis, dysentery, salmonella, and yellow fever — things that people in poor countries drink every day from lakes and cesspools — they raised enough donations of $1 each to provide safe drinking water to 500,000 people globally.

More importantly, these mini donations generally come from an audience outside your standard donor pool, so you are not only attracting new donors, but you are adding to your organization’s finances.

Most charitable organizations’ donor bases consist predominantly of older donors aged 50+. And statistically, it’s shown that these donors prefer to pay by traditional means: i.e., cheque or credit card.

And the larger the gift size, the more likely it is to be donated via these traditional methods.

Another reason that charities give is a high credit card transaction fee. I will deal with this point shortly. And there is that age-old question: Why can’t all donors, big or small, be thanked instantly via email?

Just look at what the Global Report on Fundraising says about North American donors: ❯❯ Sixty-eight percent prefer to be thanked for their donations by email, 20 percent by print letter, 5 percent by print postcard, 3 percent by social media message, and 3 percent via text message.

Now let’s look at who these minidonation givers are. Generally, teenagers are the ones who give mini-donations since they can’t afford to give your charity a $100 or $1,000 gift.

Yes, these are the same people who participate in a mass march for the environment or for women’s rights or other issues. These people could be your most loyal devotees in the future.

And then there are also those old loyal donors who once gave to you, but are now retired and can’t afford to give you a large amount any more. What your charity is doing by not accepting mini-donations from these two groups, is rejecting their heartfelt offer.

Another important point is that mini-donations, like impulse based donations, are rising in popularity. These mini-donation gifts are so small, that many donors give them without a second thought. Think of them as impulse items in a supermarket or store, where chewing gum or a candy bar costing a few dollars is proudly displayed at the checkout counter, because they sell easily and produce a healthy profit for the store.

Now back to that point of the effect of a high credit card transaction fee. My answer: To facilitate credit card transactions, third-party platforms like Stripe and Paypal are also still on the rise.

They enable quick, easy donations, on the go, and their transaction fees are much lower than previous, traditional methods.

Younger donors are more prominent members of the giving landscape today. They’re donors who are tech-savvy and who care deeply about where their money is going, regardless of whether it’s $10 or $1,000. You should cultivate

them by accepting mini-donations.

Understanding the true impact of mini-donations With smaller donations growing in popularity, the platforms people are giving on are beginning to shift. These stats show the impact of mini-donations. After the 2010 earthquake in Haiti, over $30 million in mobile donations were pledged through text message donations alone.

GLOBAL TRENDS IN GIVING Demographic Fundraising Statistics: 1. The average donor is 64 years old and generally makes 2 charitable gifts a year.

2. Generational differences between donors depend on the media and the message. So, while older donors are more likely to give because of direct mail, younger donors are more likely to make a donation because of social media marketing.

3. Thirty-one percent of worldwide donors give to organizations located outside of their country of residence.

4. Sixty-seven percent of worldwide donors also choose to volunteer locally in their communities, and 56 percent regularly attend fundraising events.

Source: 2018 Global Giving Report

But the true power of minidonations comes not just from their volume, but also from the power of sharing. According to CONTINUED ON page 25 FEBRUARY 2021