A survey by polling firm Ipsos-Reid on online purchasing during the recent holiday season has produced a surprising result: Canadians’ online gift purchasing dropped slightly in 2003, for the second year running, although Americans
continue to increase their spending on the Web.
“”We’re seeing an increasing divergence between the two markets,”” said Chris Ferneyhough, the Calgary-based vice-president of Ipsos-Reid who wrote the report. The Ipsos-Reid survey, based on a sample of 1,000 Canadians aged 18 and over, found that the Internet attracted virtually no new online shoppers this winter, and the average amount spent per shopper dropped about $20.
It was the second year running that Ipsos-Reid reported a decrease in online holiday shopping. The firm has been conducting its survey for four years, and in 2000 and 2001 Canadians bought more online, but last year the trend reversed.
Overall, Ipsos-Reid concluded Canadians spent $972 million online this holiday season, down from $990 million in 2002 and $1.1 billion in 2001. As for why that happened, Ferneyhough said, “”anyone’s guess would be as good as mine.””
Ipsos-Reid’s research indicates that only about 46 per cent of Canadians have bought items online, while in the U.S. the figure is about 75 per cent, he said.
The drop in online shopping does not reflect a decline in over-all holiday spending. Maureen Atkinson, a senior partner at the Toronto-based research and consulting firm J.C. Williams Group, said that while her company’s annual survey of holiday sales in Canadian stores will not be published until February, she expects a modest increase, likely in the three to five per cent range. “”It will definitely be growth,”” she said.
Atkinson said the reported decrease in online spending is surprising, especially given e-commerce icon Amazon.com’s move into Canada in the past year.
Jim Carroll, a prominent Internet commentator and co-author of The Canadian Internet Handbook and other net-related books, also said the findings were surprising, but offered some possible reasons behind them. “”We’ve never been the sort of mail-order catalog culture — we’ve never had that culture here to the extent the Americans have,”” he observed.
Carroll said Canadian businesses have not emphasized e-commerce as much as their U.S. counterparts.
Ferneyhough said the fact that Americans can find most of the items they want to buy online offered by domestic retailers, while Canadians often find themselves buying from U.S. suppliers, might be another way of explaining Canadians’ lower level of interest in online shopping. “”If you’re an American and you’ve got a week before Christmas and you buy something from Amazon or whatever, you know you’re going to get it,”” he said.
Not all data supports the view that Canadians are backing away from online purchasing, though. InternetSecure Inc., an Oakville, Ont., company that provides credit-card services to online merchants, saw purchases by Canadian buyers increase 43 per cent year-over-year in December 2003, said Mia Huntington, InternetSecure’s director of business development.
Huntington said InternetSecure deals mainly with smaller merchants, but serves a few larger ones too. She added that her firm saw a smaller increase — 33 per cent year over year — in purchases by U.S. buyers.
Huntington said she believes Canadians are growing more comfortable with online purchasing, thanks in part to initiatives like Verified by Visa, in which the Visa Canada Association and participating banks recently began giving cardholders passwords to use when making online purchases with their cards.
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