Canadians are still a little cautious about e-commerce, according to a new survey by Taylor Nelson Softres (TNS), with less than two-fifths planning to do any online shopping this year.
December 21, 2005 – Among the three-fifths of Canadians who do not shop online, 42% said they prefer to shop in stores, and 16% said they want to examine a product in person before buying. Security concerns like credit card fraud and insecure online transactions deter around one-tenth of non-online shoppers.
Additionally, Canadians that do shop online have reservations about the shopping process.
“We know from previous research that shopping cart abandonment is fairly high in Canada with about one in two shoppers reporting that they did not finalize at least one online purchase in the past three months,” says Richard Jenkins, a vice president and corporate director of public opinion research at TNS Canadian Facts. “Shipping costs, customer service shortcomings and privacy and security concerns are holding consumers back from doing more of their shopping online,”
The top e-commerce Web sites in Canada tend to be off-shoots of traditional stores rather than online-only entities. Sears.ca and Futureshop.ca lead in online commerce, with Indigo.ca, Amazon.ca and Canadiantire.ca rounding out the top five.
A comparison with the top five US e-commerce Web sites indicates that the popularity of major online retailers like Overstock.com, Shopzilla.com, Apple.com and Yahoo! stores has not crossed the border (the Web sites of traditional retailers like WalMart.com and Target.com, however, are also dominant in the US).
As eMarketer Senior Analyst Jeffrey Grau notes in the Canada E-Commerce report, “Canada’s retail e-commerce sector is caught in a demoralizing supply-demand cycle that is impeding market development and leaving it vulnerable to US competition. There is little to buy online, so consumers don’t make purchases electronically. And retailers, observing low demand, have no incentive to build retail Web sites.”
Those that do buy through the Net are fairly traditional. Canadians are readers � and books were the top shopping category named by respondents in TNS’s survey, though videos and DVDs, and toys, were not far behind.
Overall, TNS estimates that online retail sales will rise to $1.8 billion Canadian by the end of 2005, an increase of about $300 million from 2004’s totals.
But as data from eMarketer demonstrates, retail e-commerce sales account for a very small percentage of overall retail sales, and modest increases in sales during the holidays, and during the rest of the year, are unlikely to change that very much.
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