How Digital is Transforming Canada's $500 Billion Retail Industry

From mobile to social, the rapid adoption of digital technologies, devices and services by consumers is reshaping our entire economy. This digital tsunami is transforming multiple industries and ultimately creating a new order—and it’s happening faster than ever. 

The first industry to feel the impact of digital was print. Then came advertising, media and entertainment. Many other followed.

Over two decades later, digital is transforming banal industries like guest accommodations (courtesy of Airbnb, VRBO, Homeaway et al.) and local transportation (courtesy of Uber, Sidecar, Lyft  et al.). One industry after another, the story goes pretty much the same way. Innovators and disruptors use digital technologies to challenge the status quo. They find and fix inefficiencies, discover new ways to gain and service customers and whamo-presto the market leader is suddenly yesterday’s news. But there is one thing these stories have in common. Without a doubt, incumbents lose their leadership positions because of their lack of digital knowhow.

We’ve observed three factors in this trend: 

First, industry leaders don’t seem to grasp how fundamentally transformative digital technologies are and don’t see a need for digital innovation. Second, they completely underestimate how digitally sophisticated modern consumers are—and how their expectations are increasing. Third, they seem unable or unwilling to transform their organizations to adapt to this new digital world. 

One such industry undergoing significant transformation due to digital is retail. Whether it’s to check reviews, compare prices or determine availability, most consumers go online before they shop. These online interactions determine what, how and where consumers shop.

Shoppers want selection, purchasing options (online or in-store), price competitiveness and excellent online service—throughout the buying process and even post-purchase. And they want it across all digital channels and on all their devices. In the coming years, we’re betting that no large retailer can thrive, let alone survive, without seriously upping their digital game and meeting the increasingly high expectations of their sophisticated customers.

Similar to other industries that have been transformed by digital, what will separate the winners from the losers will be their digital maturity. But digital maturity isn’t an esoteric concept. It can be observed,  quantified, measured—and improved. It was this realization that led the Chasm team to start the process of examining the digital maturity and readiness of Canada’s largest retailers.

Chasm Digital Group examined 21 of Canada’s largest retailers. For each retailer, we examined a total of 231 criteria spread across four digital channels. All retailers were marked out of a maximum score of five, and their overall score placed them in one of five levels in the Chasm Digital Maturity Scale (Novice, Beginner, Intermediate, Expert, Guru).

Here are the highlights of what we learned.


Retailers by rank









9 - LOWES 


11 - WAL-MART 



14 - RONA


16 - SOBEYS 

17 - THE BAY 






Top Retailers by digital channel

  • Web: Amazon
  • Mobile: Amazon
  • Social: Chapters
  • Email: Amazon


Top retailer by category

  • Home and Fashion: Amazon
  • Grocery: Costco
  • Pharmacy: Costco
  • Home Improvement: Amazon


Other Key Findings

1. Canadian retailers lag american competitors.Of the 21 retailers we examined, the bottom 10 were all Canadian, while the top 11 are mostly Canadian branches of US retailers. 

2. Most retailers do well in one or two channels, but not all. Retailers seem to invest in a few channels, but digital mastery across all channels is much too challenging for most. 

3. Despite growth of mobile and social, web remains the top digital channel. Although mobile and social show the greatest innovation and opportunity, retailer websites still remain the core digital channel for most retailers. 

4. Grocery and pharmacy retailers are living in the digital dark ages. Despite their size, profitability and market share, grocery and pharmacy retailers behave like digital luddites. The majority of grocery and pharmacy retailers don’t offer ecommerce, any transactional capability, have little to no social presence and seem unaware of the massive consumer adoption of mobile.

5. Smaller, niche players are adapting to digital faster. Overall, we were quite surprised with the poor digital performance of the larger, more established Canadian retailers. Even though most large Canadian retailers seem to miss the mark, smaller, niche/regional players like Chapters, London Drugs and Lululemon show that size isn’t necessarily linked to digital maturity.

Canada’s retail industry is facing some big challenges. New entrants like Target and Nordstrom want a piece of the growing Canadian retail pie. Amazon is on a war path with more hiring and expansion into new categories  Store closings are the norm (SearsStaples  Radio Shack). But the biggest challenge it faces is adapting to a world that is increasingly more digital. In this new world, digital maturity is paramount, change is constant, ongoing innovation is a necessity and the cost of failure is obsolescence.


Vancouver, British Columbia, Canada, Inc. (NASDAQ:AMZN), a Fortune 500 company based in Seattle, opened on the World Wide Web in July 1995 and today offers Earth's Biggest Selection., Inc., seeks to be Earth's most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices. and other... more

lululemon athletica
Vancouver, British Columbia, Canada

We make technical athletic apparel for yoga, running, dancing, and most other sweaty pursuits. Founded in Vancouver BC in 1998, the first lululemon shared its retail space with a yoga studio. We've been growing ever since, and our technical yoga and run clothes are now available in countries all over the world. more

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Ashish Anand

Ashish Anand

Ashish Anand is managing partner and head of strategy at Chasm—a digital consultancy based in Vancouver. He is the lead author of Retail 2.0: A digital assessment of Canada’s top retailers. He has managed strategic digital initiatives for numerous organizations in Canada and the U.S. more

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