Veteran online shoppers will make a bigger proportion of their holiday spend on the Web this year, but new Net shoppers are still staying away in droves, according to an Ipsos-Reid Corp. poll.
The research company says Canadians expect
to make $1.1 billion in holiday purchases online. That number might rise as high as $1.4 billion when the numbers are tallied in January, a 21 per cent increase over 2001 holiday spending.
And while the 23 per cent of Internet users who’ll buy gifts online will spend more this year than last – $320 on average this year, up from $297 last year – those who haven’t shopped online in the past aren’t eager to join the fray, says Ipsos-Reid vice-president Chris Ferneyhough. The one in four Canadians who consider themselves “unskilled” Internet users will make only seven per cent of those purchases.
Ferneyhough says privacy and security still top the list of disincentives to shop online, but there are other issues – like a lack of comfort with the buying process and the cost of shipping – that can be addressed independently.
Online shoppers see free shipping as virtually an entitlement. “It’s getting to the point where that’s what online shoppers are expecting,” Fernyhough says.
Earlier this fall, monster bookmonger Amazon’s Canadian operation began offering free shipping on orders of $39 or more, forcing Chapters.Indigo.ca to follow suit. Deals like this may be conditioning shoppers to expect free shipping, says David Stark, public affairs director with Toronto-based NFO Cfgroup.
According to an NFO study released earlier this year, 17 per cent of online shoppers who abandoned a shopping cart ditched it because of shipping costs. Worse, 59 per cent of Canadians think e-tailers are using shipping costs to jack up profits, half of them “strongly convinced” this is the case.
Online retailers should present a clear statement of how shipping charges are arrived at, Stark says.
There’s more than the Amazon/Chapters contretemps to show that shipping promotions are becoming a major e-tailing differentiator. According to a U.S. survey by Jupiter Research, 59 per cent of online retailers will use free or discounted shipping and handling as a sales promo. That seems to fall in line with the desires of online shoppers – 67 per cent of women and 61 per cent of men surveyed said shipping discounts would encourage them to buy more, according to Jupiter senior analyst Ken Cassar.
Stateside, Jupiter’s expecting a 17 per cent increase in holiday shopping over last year, to US$13.1 billion. But the proportion of online spending that takes place in the holiday season is declining. Cassar says holiday sales will account for 32 per cent of all online retail spending this year, down from 36 per cent last year.
“As the channel becomes more mature, November and December get less benefit from being the last two month s of the year,” Cassar says.