Dive Brief:
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Many Americans are taking advantage of the strong U.S. dollar and the Canadian dollar's current slump, buying goods online from Canada.
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Americans spent $3.2 billion on Canadian e-commerce sites last year, out of total cross-border spending of $27 billion. That is expected to grow 10% this year, according to a study from PayPal and Ipsos SA cited by Bloomberg.
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As the loonie has fallen some 18% against its U.S. dollar, sales via PayPal on Canadian websites rose some 20% in 2015 from 2014.
Dive Insight:
The Canadian dollar, nicknamed the loonie, for years hung in the American dollar’s shadow, prompting some manufacturers to list a separate Canadian price and border states to reject the currency.
There’s nothing new about anyone taking advantage of their own currency’s strength to gobble up goods that suddenly become bargains. But the American penchant to turn to Canadian wares when the loonie is down has moved online, boosting sales even further. Online shopping helps ease the hassle of shopping cross-border, even for those living in border areas, as it has become a bit more difficult to cross the Canadian border post-9/11.
According to a February eMarketer survey, the top reasons U.S. customers shopped Canadian e-retailers were better prices and product availability. American shoppers are also willing to eat the extra trans-border costs tagged to ordering Canadian products, believing that the deals are worth it, according to Bloomberg.
“Across our customer base, Canadian businesses saw strong growth among U.S. shoppers in 2015,” Brent Bellm, CEO of Austin, Texas-based Bigcommerce, told Bloomberg in an e-mail.
Sales at Canadian Bigcommerce stores during the holiday shopping season rose 39% year over year even though the number of stores increased just 2.9%, he told the news service.
