Strategy: Colour Me Canadian
The Canadian dollar’s strength makes marketing by catalog to Canadians a prime expansion opportunity for U.S. catalogers these days. For many, it’s a logical way to grow, provided the prospecting universe is sufficient for the offer. Mailing and distributing merchandise into Canada has become almost seamless thanks to services such as the one offered by Canada Post Borderfree. Here’s what you can expect, and how you can get started test marketing and building a Canadian housefile as part of your overall circulation strategy.
Sizing Up the Market
There are approximately 33 million people and 12.5 million consumer households in Canada. Similar to the United States in many ways, Canada has an affluent, high-tech and urban society. Almost 20 percent of the total Canadian population resides in the province of Quebec, where French and English speaking people are split about 70-to-30. There are three groups in Quebec: French unilingual, English unilingual and bilingual. Language laws are a touchy issue. Therefore, when mailing to Quebec, select only English-speaking addresses. Avoid sending an English-language catalog to a non-identified English speaker. Although this reduces the size of the potential universe, it’s the safe thing to do.
What to Expect
Based on the fact that the Canadian population is about one-tenth that of the U.S. population, a U.S. catalog company should be able to generate 10 percent of its annual sales in Canada. Naturally, it’ll take several years to generate this amount of revenue. But it’s a good goal.
The chart “Canadian vs. U.S. Prospect List Results” (click thumbnail below to enlarge) is a comparison of typical results, e.g., response rate and average order size, for Canadian vs. U.S. response rates from prospect lists in Canada, which often are 25 percent to 40 percent higher. Response rates tend to be higher for several reasons: Canadians haven’t yet been inundated with catalogs; there aren’t as many catalogs to choose from; and there’s a favorable currency exchange rate right now. If you have a good merchandise offering, response should be strong.