Canadians doing more browsing than buying on-line

Could it be security reasons or do Canadians just want to be sure before they take that step? According to a recent e-commerce study by the Boston Consulting Group (BCG), Canadians are still reluctant to buy on-line.

“Canadian consumers are browsing but not yet buying as much as their U.S. counterparts,” said BCG vice-president Peter Stanger in Toronto. “And those Canadians who do make on-line transactions spend far less than their American counterparts and are less satisfied with the actual on-line purchase experience.”

The study, titled Winning the Online Consumer in Canada, draws on the results of research with 12,000 consumers in North America, including over 600 in focus groups. Its main centre of attention is the comparison of Canadian on-line consumer attitudes and satisfaction levels with those of U.S. consumers. It also touched upon the presence and challenges facing Canadian on-line retailers.

“The primary finding was that (Canadians) have a greater sensitivity towards security and privacy,” said Julie Breen, a Toronto-based BCG e-commerce research analyst.

According to Pat Daley, a senior manager with the e-business group at Toronto-based Deloitte Consulting, said finding a deal is not the prime motivator for on-line consumers.

“We have found that there are probably three stages to the way a consumer goes through their buying behaviours. The basics have to be done well. Those include things like security, making sure that the site is up and running. You’ve got to stay with the consumers through the transaction.

“From a security point-of-view, I think we’re in pretty good shape in Canada.”

According to the study, both Canadians and Americans cite privacy and security concerns as key barriers to purchasing on-line, with Canadians showing greater sensitivity in this area.

Kevin Strachan, vice-president of e-commerce for Danier Leather in Toronto, said his company has both a U.S. and Canadian site.

“Americans tend to spend more on an average purchase, more items per sale and more dollars to buy more expensive merchandise on-line,” Strachan said. “I think they’re more confident. But certainly we agree that the number of people browsing in Canada seems to be higher than that from the US.”

Strachan said Canadians go to the site to find out where the newest or nearest stores are located.

“Americans are more likely to shop the site, buy, place their credit card on-line. Canadians who are shopping are much more likely than Americans to pick up the phone and call us to give us the card number,” Strachan said. “There’s a confidence level that the Canadian still doesn’t have with the security of giving out a credit card.”

That sense of risk is misplaced, he said, when compared to other elements of life. “There’s a risk issue with using a cell phone or even cordless phone. Ask RadioShack how many scanners they sell for people in your neighbourhood to listen to your conversations.”

The study also found that the lack of Canadian on-line retailers inhibits consumers from purchasing on-line.

“We need to understand that most of the major e-commerce sites started in the U.S.,” said Tom Vassos, MBS professor of Strategic Internet Marketing at the University of Toronto and senior e-business advisor at IBM Canada. “We’re comparing U.S. and Canadian people making purchases but in many cases the Canadian has to make an international purchase.”

Vassos thinks these differences will change. “As more and more Canadian companies take off with their Web site strategies, I think you’re going to see those differences disappear.”