Canadians Getting Comfortable with Online Shopping

Canadian online shoppers are becoming more comfortable with buying online, according to a report by Ernst & Young, which found Canadian online shoppers spent an average of $770 in 1999.

Canada’s online retailers can look forward to substantial growth in online sales, according to Ernst & Young. Fifteen percent of Canadian shoppers online made 10 or more purchases during the past 12 months, compared to 39 percent in the US. As in the US, Canadians named shipping costs and the selection of goods as the key factors impeding the growth of online sales. According to the report, online shoppers value full customer support services, online and offline, through voice, as well as more sophisticated personalization techniques.

The report also confirms the attractiveness of the online target market yet again, indicating income level is closely linked with the number of purchases online. The greater the income, the larger the number of purchases.

Thirty-two percent of those surveyed were buying at auctions, the report found.

“Online shoppers are spending their money in new and different ways,” said Miles Faulkner, senior VP of Ernst & Young’s eBusiness team. “The popularity of online auctions indicates that entertainment and value are key to these consumers.”

The report found that 53 percent of auction buyers expect to increase their purchases, indicating future growth.

“Bricks and mortar retailers must understand that new business models are potentially the greatest threat to current retailing operations where specific product lines will come under attack or traditional profitability will suffer,” Faulkner said.

Ernst & Young’s forecasts indicate online retailing will continue its rapid growth trend in the years to come. Current non-buyers who join the ranks of Internet shoppers will contribute significantly to online sales in the next year. Eighty-five percent of Canadian non-buyers plan to purchase via the Internet in the next year. In fact, according to Ernst & Young’s report, Canada shows the largest potential of non-buyers intending to purchase online in the next year. Internationally, the respondents were slightly less: 80 percent in France, 79 percent in the US and Italy, and 75 percent in the UK.

By 2002, US online consumers will spend one-third of their total shopping money via the Internet, according to Ernst & Young. American online consumers, who currently spend 15 percent of their shopping money on the Internet, will double that expenditure to 36 percent. This trend will be mirrored by online consumers in Italy, who will also double their spending, and it will increase threefold in Canada, Australia, France, and the UK.

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