Canadian Online Retailers Missing out on Sales: Study by NFO CFgroup

For Every Purchase That Is Made Online, Another Is Not Completed

TORONTO, October 8, 2002 � Although Canadians spent $2 billion at retail Web sites in the first half of this year, an NFO CFgroup study suggests that they would have spent more if their online shopping experiences had been better.

About 40 per cent of Canadian Internet users claim that they abandoned at least one virtual shopping cart on a Canadian retail Web site during a three month period earlier this year. And for every purchase Canadians made online, another was not completed, according to the Shopping Carts and Shipping Costs marketing research study.

�Many Canadian e-shoppers click on items they want, add them to their carts, get to the final step � shipping and payment details � and bail out,� said David Stark, public affairs director of NFO CFgroup. �We wanted to understand why.�

Although browsing or comparison-shopping tops the list of reasons for online shopping cart abandonment, the study found that just 21 per cent of e-shoppers surveyed mentioned it. Shipping costs account for 17 per cent of people aborting their purchases. Poorly designed Web sites and privacy concerns also cause e-shoppers to ditch their carts.

�With six in ten online Canadians believing that the shipping fees they pay are inflated, it would seem that shipping charges are an irritant for a number of online shoppers. Perhaps they
believe that e-tailers have lower operating costs than their offline counterparts, and so should be able to absorb shipping fees into the product cost,� said Stark.

�At the very least, online retailers should make it clear that their shipping costs are not inflated if that is the case. Statements like �we make no money on shipping� or �you will only be charged what it costs us� would likely clinch more sales,� Stark added.

Shopping Carts and Shipping Costs is part of NFO CFgroup�s State-of-the-Net series of studies on the Internet marketplace in Canada. For the study, a survey was conducted using the firm�s
national weekly Internet omnibus service, NFO Fast Feedback. E-mail invitations were sent to 2,600 members of NFO CFgroup�s Internet panel comprising 50,000 Canadian Internet users who have agreed to participate in survey research from time to time. In total, 985 online interviews were completed between May 16 and 23, a 38 per cent response rate. The survey results are nationally representative of the online Canadian adult population and are considered accurate to within 3.2 percentage points, 19 times out of 20.

NFO CFgroup is one of Canada’s most prestigious full-service marketing, opinion and social research organizations. The company is part of NFO WorldGroup (NFOW), numbering among the world’s largest providers of research-based marketing information and counsel, and a world leader in Internet based research. NFOW is a member of The Interpublic Group of Companies.