Shoppers in Canada's midsize cities driving e-commerce growth

Online shopping in Canada was driven in its early years by shoppers concentrated in dense urban areas. However, a new study shows that parcel carriers now have to deliver e-commerce packages to an increasingly diverse range of home addresses.

The number of items ordered online and delivered by Canada Post Corp. in Canada grew 16 percent for the first half of 2015 compared to the same period last year, the Canadian national postal service reported. Most industry professionals expected that rate of growth, but the study also showed that the country's midsize cities have taken over the lead on growth rates from large urban centers like Toronto and Vancouver.

A ranking of Canadian regions with the highest annual growth rates in e-commerce shipment delivery was led by London, Ont. (29 percent); Windsor, Ont. (29 percent), and Kitchener, Ont. (27 percent), all finishing ahead of traditional and more populous markets like Toronto (25 percent) and Vancouver (24 percent). The trend toward less-populated regions continued farther down the list as well, with Saskatoon and Regina, Sask.; Victoria, B.C.; Hamilton, Ont.; and Charlottetown, P.E.I. all finishing above their larger cousins Ottawa, Edmonton, and Winnipeg.

Canada Post, which reaches its 15.7 million addresses through its own network and with partners Purolator Inc. and SCI Logistics, said it is responding to these changes by allowing online shoppers to ship their parcels to post office boxes. This "FlexDelivery" service emails users when their boxes arrive at a chosen location among the country's more than 6,000 post offices.

"As Canada Post delivers two out of every three parcels, we're committed to supporting retailers to help them make the most of the online opportunity," Danielle Doiron, Canada Post's director of parcel market development, said in a statement. "To do this, we offer not only convenience-based delivery solutions, like FlexDelivery, but relevant research to help them better understand and maximize the current e-commerce growth opportunity."

For Canada Post, the challenge is compounded by the fact that a major part of Canada's population is clustered along the country's southern tier, which straddles the U.S. border. Delivering e-commerce items to consumers in far-flung locations could be a costly exercise.

The carrier's survey also revealed a change in the types of of items Canadians are buying online, with mass merchants and fashion retailers giving away some of their traditionally large lead in e-commerce parcel-volume growth (33 percent and 16 percent, respectively) to fast-growing newcomers such as toys and hobbies (21 percent), office supplies (15 percent), and sporting goods (11 percent).

Slower-growth segments included consumer electronics, telecommunications, and health and beauty, with the category of books, music, and videos finishing last with the list's only negative results (-7 percent).