State of the Net in Canada

The total value of Canadian online spending from May to November

2002 is estimated at around $2.3 billion (compared to $2.6 billion during the same period of 2001).

The main reason for the drop is the decrease in average spending from $60 to $50 a month per online shopper.


increase in the total number of Internet connected Canadians (72 per cent vs. 68 per cent of all adults) and online shoppers (55 per cent compared to 51 per cent of online Canadians) somewhat buffered the drop in total sales.

Online retail might be reaching the point of saturation, as the room for lateral growth (increase in number of online shoppers) shrinks. Unless average online spending rebounds, online retail could stagnate.

One-in-three (36 per cent) online Canadians plan to do some of their holiday shopping online, comparably more than last year (24 per cent).

On average, they plan to spend $320 (compared to $365 last Christmas). If they indeed spend as much as they claim, the total online Christmas spending might reach $1.6 billion, significantly more than $1.1 billion spent last holiday season.

The main motivation for online Christmas shopping is the convenience of 24/7 access.

The main reason for not planning to do any online Christmas shopping is the preference for in-person shopping.

Top online Christmas shopping products, by the percentage of likely online Christmas shoppers who plan to purchase them, are: books with 48 per cent, while electronics where most computer products were categorized in faired well with 33 per cent.

Potential market for major Canadian online retailers by percentage of likely online Christmas shoppers who plan to purchase from them: was on top of the list at 46 per cent. Sears do carry computers. Meanwhile, traditional computer retailer did well with 37 per cent.

The development of the Canadian online retail market follows a specific trajectory. Unlike the US, where a proliferation of pure-play online retailers before the implosion promised to turn the retailing world upside-down, online retail in Canada is characterized by the domination of traditional retailers that extended into the Internet by incorporating the online channel into their sales strategy.

Furthermore, Canada is one of the leading nations by both Internet penetration and the incidence of high-speed home access. Having these factors in mind, it might be said that solid foundations exist for the rapid development of B2C e-commerce.

In addition, there is a rather high rate of online shopping trial, with around half of online Canadians making at least one online purchase last year.

However, so far online Canadians have been rather moderate online shoppers, shopping infrequently (less than once a month) and spending, on average, quite small sums (around $50 a month). The only part of the year when online retail does experience a high level of activity is the Christmas holiday season. This report will present an outline of the Canadian online retail market from May to November as well as estimate online Christmas spending.

NFO CFgroup (formerly CF Group Inc.), an NFO WorldGroup company, is Canada’s first – and one of the largest – full-service marketing, opinion and social research organization.

NFO WorldGroup is one of the world’s leading providers of research-based marketing information and counsel and is a worldwide leader in Internet-based research. It is one of the Interpublic Group of Companies.

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Jim Love, Chief Content Officer, IT World Canada

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