Retailers Stock Online Shelves
Stores finally offering more goods as Canadians slowly take to e-commerce
Saturday, December 02, 2006
More Canadian consumers have visions of Christmas shopping online than ever before as this country shows signs of following its neighbour to the south in embracing cyber commerce.
In its eighth-annual Visa Canada gift-giving survey, the credit card giant found that 23 per cent of Canadians plan to shop at e-retailers this holiday season, up from last year's 18 per cent.
"We've seen a steady rise in the number of Canadians shopping online, but this was the biggest jump in six years," said Zack Fuerstenberg, director of new channels for Visa Canada.
Increases in online shopping have been tiny in recent years, tallying around one per cent a year. But Fuerstenberg said despite continuing fears surrounding online security, consumers are showing an increasing willingness to turn to cyberspace for their needs.
Part of that shift is thanks to an increase in online offerings as Canadian retailers begin catching up with their counterparts south of the border.
"There are certain categories that haven't been as active in the Canadian market, but we are now seeing a change in the composition of what people are buying," said Fuerstenberg. "That's a key issue."
And it's good news for Scott Sanderson, co-founder of Shop to It (at www.shoptoit.ca), a comparison shopping site that caters to Canadian consumers.
"I would expect our growth to be in the neighbourhood of 100 per cent this year over last," he said. "Last year we had 300,000 unique hits in the month of December, and we are forecasting more than 600,000 for this December."
Sanderson suggested that Canadian consumers would be more enthusiastic online shoppers if the offerings and services met their needs.
"We are still really far behind the adoption rate we see in other countries," he said. "I think it is because we don't have the content and people get frustrated."
According to Statistics Canada, total e-commerce sales in this country increased by 38.4 per cent in 2005 over 2004, to a total of $39.2 billion. That marked the fourth year running that e-commerce saw an increase of 38-per-cent or more.
Sanderson said Canadian shoppers run into stumbling blocks, such as U.S.-based sites that don't have delivery to Canada, or shipping and duty fees that are higher than expected.
"Canada has great demographics, we spend money very well, we have all kinds of broadband access, and we do more searches [per user] than the U.S.," he said. "Our users are very Internet savvy.
"This is less about security and less about trust than it is, 'does it work for me?' "
Jeff Leiper, Ottawa-based research director at the Yankee Group, said Canadian retailers haven't been as aggressive as U.S. retailers overall, and that applies to the Web as well. He said the size of the market has been one factor discouraging e-commerce in Canada.
"It costs a lot of money to set up an online store. And serving a market of 30 million people may not be viable for a niche product, while it is viable in a market of 350 million," he said.
While traditionally such items as electronics, CDs and books have dominated online offerings, Fuerstenberg said the reality in Canada is that half of the e-commerce volume is in intangibles like travel.
In the U.S., the long tradition of catalogue shopping has transferred to the Web, taking with it such categories as clothing and shoes that until now have been underrepresented in Canadian e-commerce.
"It has always been a bit of a riddle," said Fuerstenberg. "E-commerce sales in the U.S. are gigantic; in Canada they are tiny.
"We found a lot of the practices in multi-channel retailing are not there yet in the Canadian market -- basic things like the ability to return your goods to a physical endpoint.
"That takes a lot of logistics, a lot of investment, and a lot of Canadian retailers aren't there yet."
Future Shop is one example of a Canadian retailer that has successfully married the convenience of online shopping with the added assurance that come from having a local store to deal with if anything goes amiss.
Its online e-commerce site (futureshop.ca) is seeing a 30-per-cent year-over-year increase in site visits.
"This is very healthy growth," said Thierry Hay-Sabourin, general manger for Futureshop.ca. "This year we are expecting a strong increase in sales of flat-panel TVs, digital cameras, digital audio like MP3 players, video games -- almost every category is performing well online."
Hay-Sabourin said growth is being fuelled by Future Shop's option of online ordering with in-store pick-up. Buyers also can return merchandise they order online to any Future Shop store, or send it back.
The much smaller Canadian market makes it less cost-effective for retailers here to offer the range of goods and services available online from American retailers, but Fuerstenberg said some categories that didn't even make the Canadian e-commerce marketplace are now starting to show up.
"There has been a big shift," said Fuerstenberg. "We are now seeing product categories like apparel that were almost not really present in Canada."
Quebec and Ontario shoppers plan to boost their online shopping dollars this Christmas season, while British Columbians are pulling back -- spending $97 less than last year's $291, according to the Visa Canada survey.
Topping online Canadian shoppers' wishlists are electronics, which have knocked books from last year's first place to third this year. Clothing has moved up dramatically, with shoppers anticipating this year it will be the second most likely present purchased online.
Toys aren't a huge online item, with just nine per cent of shoppers indicating they'll orders toys from an e-retailer, compared to 19 per cent who plan to buy CDs online.
gshaw@png.canwest.com
STOCKING MARKET
It's better to give than to receive in B.C., according to a Visa Canada survey.
That's because British Columbians plan to spend less per recipient than their counterparts in every province west of Quebec, and much less than they did last year. But if you're a spouse or life partner, that stocking's going to bulge more in B.C. than in any other region.
Average amount to be spent on holiday gifts per recipient, 2006
B.C. $82
Alberta $84
Sask./Man. $85
Ontario $101
Quebec $68
Atlantic Canada $75
National average $85
Average amount to be spent on holiday gifts for spouse/partner, 2006
B.C. $253
Alberta $240
Sask./Man. $190
Ontario $240
Quebec $185
Atlantic Canada $223
National average $225
Ran with fact box "Stocking Market", which has been appended to the end of the story.
© The Vancouver Sun 2006
