That Canada is one of the most – if not the most – connected country in the world is generally not up for debate. But as to why our southern neighbour, with generally the same levels of connectivity, is more than twice as likely to shop on-line – well, that is another matter.

Deciding whether Canada or the United States has a higher percentage of on-line residents is a bit like the Florida vote: it depends on who does the counting and how it’s is done. Computer Industry Almanac (CIA) Inc. has Canada at the top with 43 per cent of the population being regular Internet users. The U.S. is fourth with slightly less than 41 per cent.

Forrester says 37 per cent of Canadian households are on-line, which does not disagree with CIA’s numbers since many people may be accessing the Internet from school, work or a public library. But Forrester’s statistic for the U.S. (46 per cent of households on-line) definitely is not in accord with CIA unless a whole lot of computers are sitting unused in American homes.

While these numbers leave room for debate, they are close enough for most to agree that the two nations are basically on par.

But it is the on-line shopping numbers that bring up the interesting question. Why are Americans more than twice as likely to shop on-line (Forrester: 47 per cent to 23) as their equally-connected Canadian counterparts? A recent Ernst & Young survey found that Canadian on-line shoppers will spend, on average, 14 per cent of their holiday dollars on-line while their American counterpart will spend 29 per cent.

Either way you cut it, the Yanks are embracing e-commerce a hell of a lot more than we are.

why aren’t we shopping?

Almost everyone spoken to for this story has some theories. Few of them are proven but all were interesting.

“Canadians are smarter,” was the rather blunt yet flattering opinion of Paco Underhill, managing director of Envirosell in New York and author of Why We Buy: The Science of Shopping.

“I think that a lot of the e-commerce at the outset was hype (in the U.S.) and that we had an enormous amount of advertising beamed at us to drive us to the Web to shop and lots of us went there,” he explained.

There is little question that American companies have spent far more advertising dollars to propel consumers to their Web sites. At the same time many traditional Canadian retailers have been slow off the mark, some only recently introducing e-commerce options.

Canadian retail’s slow adoption and minimal selection is seen by many as the real crux of the on-line shopping disparity.

“The selection and variety is so much greater on the American sites than on Canadian sites,” said Faye West, president of the Canadian Information Processing Society. “I would love to be able to shop and have the selection (that I have on U.S. sites) on Canadian sites.

“I have been very disappointed at the quality of some of the Canadian sites I have looked at.”

West said she saw a print ad for a sweater with a Web address printed at the bottom. She went to the site only to find the company had no e-commerce capability and a rather pathetic site.

“It is useless,” she said. The company is a well-known Canadian retailer, which shall remain nameless since it is not alone suffering in from this affliction. Apparently having a Web address is de rigueur in Canada while having a useful Web site is not.

Jed Kolko, a consumer technology analyst with Forrester Research in Cambridge, Mass., agrees with West. “Canadian retailers are less well stocked for on-line purchasing than Americans are,” he said. “A significant percentage of Canadians said they ended up buying something off-line because they couldn’t find it from a Canadian retailer on-line.”

That selection is far greater in the United States is hardly surprising given a population base of almost 300 million potential buyers. What is surprising is why Canadian on-line retailers are, for the most part, not doing a very good job. To be sure some sites are outstanding but others are, at best, a lame attempt to join the e-commerce world.

West points to the American risk-taking culture, the “build it and they will come” attitude. Americans take risks more than Canadians and retailers set up sites in hopes of being profitable, she explained. Canadian companies want the Web site traffic but may not be as willing to put the money up front to get eye balls.

“They have taken the risk, they have put the sites up…and the Canadian retailers haven’t taken the risk.”

“I think that is exactly right, I really attribute it to choice [that Americans are shopping more on-line than Canadians],” said Ben Babcock, partner at Ernst & Young LLP in Toronto.

“I think Canadian retailers have taken a measured approach to the on-line channel as an alternative to the store channel,” he said. “I think it is this measured approach that is causing things to be a little slower here.”

shopping south of the border

The Ernst & Young survey found that seven of the top 10 sites for Canadian on-line shoppers are located here in Canada. When you look at our stumbling dollar and other trans-boarder shopping issues, it is not surprising.

“The prices are fine but once you add on the shipping, the handling, the duty, the exchange, the GST for things that are coming out of the States, it gets to be very expensive, it is just not worth the cost to complete the purchase,” West said.

“That exchange rate makes a big difference in people’s minds,” Babcock added.

In fact shipping is often a big issue, especially for smaller ticket items.

“It is certainly the case that a lot of Canadian shoppers have found shipping costs to be a rude surprise…and when people are buying on-line, nobody likes a rude surprise,” Kolko said.

Regardless where we shop, security and privacy do not seem to be a big concern.

“Though [security] is what people say when we do the interviews, I don’t believe that is the real demotivator,” said Gaylen Duncan, president and CEO of the Information Technology Association of Canada (ITAC) in Mississauga, Ont.

“If it was privacy and security, there is no bloody way we would be doing our banking on-line,” he explained. The Forrester survey found that 25 per cent of on-line Canadians bank on-line while only 15 per cent of their American counterparts do. And where would security be more of an issue that at your bank?

The message seems clear: Canadians want to shop on-line but find Canadian Web sites just don’t offer what they want. Shopping in the U.S. is an option but not the most favoured.

“A lot of shopping does not occur because they can not find it at a Canadian site, yet they know that they can find it at a Canadian store,” Duncan concluded.

Note to Canadian on-line retailers: build it properly and they will come.