Canadian e-commerce welcomed a prominent player to the field when the country’s oldest department store, Hudson’s Bay, announced a joint venture to add an online component to its retail offerings.
Hudson’s Bay, a 330 year-old company, will team with Microsoft Canada Co., IBM Canada Ltd. and Oracle Corp. to makes its move into the new economy. The three tech companies will provide software and technology for Hudson’s Bay, which owns retail chains The Bay and Zellers. Together they will launch hbc.com.
According to company president and chief executive officer George Heller, the team will strategize to improve customer relations and merchandising, build customer loyalty and internal communications. The project is expected to take about two years.
The announcement is particularly significant in that Canada has been lagging in the adoption of electronic commerce among major retailers. “I think the intriguing thing is that while it was presented as a fairly substantial announcement, it’s more substantial in the context of the notoriety and profile of the partnership members and bringing them all together,” said a Canadian retail analyst.
“Face it, they have selected three of those leaders in those areas to work with,” said the analyst. “I think the reality is that it is probably wise and should help save them some time and perhaps some money. More importantly, it all comes down to whether it actually works the way it was designed to.”
The project’s greatest importance may lie in the credibility it will provide for online retailing in Canada. Hudson’s Bay, although a different type of operation, is equivalent in its history in Canada to Sears in the United States. It is a viable part of the Canadian culture, and a household word among Canadian citizens.
Canadian E-Commerce Emerging
In just one year, the number of Canadian online shoppers buying from Canadian sites has more than doubled from 28 to 58 percent, while Canadians shopping at U.S. sites has dropped from 62 per cent to 37 percent, according to recent research from J.C. Williams consulting group and the Angus Reid Group, a global research organization.
According to the research, online shopping by Canadians is expected to more than double to $4.1 billion CDN (2.7 billion US$) this year from $1.65 billion (1.1 billion US$) last year.
While concerns about security and privacy remain major obstacles to increased online commerce in Canada, Internet users who have been online less than two years show a greater willingness to make purchases on the Internet.
The move by Hudson’s Bay to establish a strong online presence comes at a time when Canadians appear to want a greater variety of offerings. “There are an awful lot more Canadian e-tail buying opportunities now than there were a year ago,” said Michael Szego of J.C. Williams. “I think it’s natural that we’ll see this trend continue going forward as we see more Canadian retailers get online or get better offerings online.”