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Canadian retailers outgunned by US e-commerce giants

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With US-based e-commerce giants aggressively wooing Canadian buyers with various promotions, established retailers in Canada are being advised to strengthen their online presence.

“I think [Canadian] retailers have been complacent until now. [But] things are changing with the influx of US competition,” said Doug Stephens, a retail analyst.

In fact, the pressure is mounting for well-known local retailers like Canadian Tire and Hudson’s Bay Co to improve their online offerings so that they can go head-to-head with US firms.

Moreover, US ecommerce companies such as Amazon, which launched a one-hour home delivery service in New York City last month, have the competitive edge in terms of experience and technology.

In addition, these online marketplaces hold greater appeal to Canadian buyers due to the perks they offer, noted Craig Patterson from Retail Insider, a Vancouver-based blog.

“Free is huge and if Canadian companies aren’t offering free shipping then they’re going to have a challenge competing against American websites,” he explained.

Canadian retailers are also at a disadvantage because they do not have sufficient distribution centres that could enable them to offer same-day shipping without suffering a decline in revenue.

Another stumbling block is the fact that local retailers are still using outdated computer systems that are not capable of handling a surge in online orders, noted Retail Category Consultants’ founder, Sally Seston.

“It’s a huge expense to make that leap into the technology, to be in the position of where you need to be to add these services,” she added.

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