Canadian e-tailers report rising on-line sales

Christmas 2000 – the first real e-Christmas in Canada – was a good one for on-line retailers, based on findings from a Retail Council of Canada (RCC) survey conducted in early January. Of the Canadian e-tailers surveyed who had on-line operations in 1999, two-thirds say their holiday sales in 2000 were above what they were in 1999.

On average, on-line retailers garnered 140 per cent more sales this past holiday season as compared to Christmas 1999, according to Randy Scotland, vice-president of communications and public relations for RCC. Scotland adds that on-line sales increases were “all over the map”, with some e-tailers estimating increases between 10 per cent to 30 per cent, while others calculate their sales increases were more in the order of 300 per cent. Only two of the 13 on-line retailers surveyed say their sales were down, Scotland says.

“While it’s not a scientific poll when it comes to that kind of representative sampling, it does give us some anecdotal sense of how on-line sales fared,” Scotland says. “It wasn’t a huge sample…It was kind of a reality check. We wanted to see how [on-line retailers] did as opposed to smaller retailers in general.”

The Canadian retail market in general experienced much more modest sales increases. As part of a larger survey of brick-and-mortar retailers, Retail Council finds 44 per cent of the 432 retailers surveyed say their 2000 holiday revenues were up as compared to 1999, with an average rise of 9.7 per cent. The rest of the retail respondents are split: 18 per cent say their holiday sales in 2000 were about on par with 1999; and one-third say sales were down, the average decline being 10 per cent.

However, making comparisons between the on-line and brick-and-mortar retail markets in Canada is not strictly appropriate, Scotland says.

“The traditional bricks-and-mortar market is a much larger pie – in the billions of dollars – and therefore any incremental increase is significant,” Scotland says. While the 300-per-cent sales increase estimated by some on-line retailers “sounds amazing”, he says, it was not unexpected.

“When you consider that [on-line retail sales] were probably fairly modest in terms of 1999 revenue, it certainly would explain that disparity,” Scotland says. “On-line retailers were probably starting from a very small base in 1999, so the response rate would obviously be remarkably high, given the growth that they experienced year over year.”

When asked what they expect their year 2001 sales to be like, the on-line retailers are very bullish, according to Scotland. The Canadian on-line retail market, not being as mature as that of the United States, is still in the building phase when it comes to on-line sales, Scotland explains. As a result, on-line retailers will continue to expect significant increases in sales this year.

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Research confirms privacy is a key issue for Internet shoppers


Canadian Internet users are more open to providing their personal information and engaging in online transactions such as bill payment, shopping, banking and trading if they are assured the privacy of their personal information is protected. That’s the finding of a survey conducted by the Gallup Organization and commissioned by Derivion, an Atlanta, GA based firm e-billing solutions provider with R&D offices in Markham, ON.

The research also suggests that online trust is built through offline relationships. Fifty-six per cent of respondents agree that they will only share personal information with companies with whom they have a previously established relationship.

The Canadian survey results recorded that 60 per cent of Internet users report that they almost always look for a company’s privacy statement, and 53 per cent almost always look for a third-party privacy seal or trust mark. Seven out of ten say that they are more willing to conduct online activities such as bill payment with a company that has a privacy seal than one that does not.

The research also suggests that online trust is built through offline relationships. Fifty-six per cent of respondents agree that they will only share personal information with companies with whom they have a previously established relationship.

The Gallup survey asked consumers what types of online activities were most acceptable to them. The results suggest that consumers are most comfortable interacting with familiar companies, but are strongly apposed to a third-party company or organization gaining access to personal information.

Derivion’s Canadian research was based on a national telephone survey conducted between September 18 and 26, 2000 among a representative cross-section of 580 Canadian adults with Internet access.

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Canadian taxes need updating

Add Pierre Bourgeois, Canadian tax e-business leader with PricewaterhouseCoopers LLP (PwC) in Montreal, to a growing list of reputable business leaders, analysts and financial advisors who believe this country’s current taxation policies are out of touch with the new economy. Bourgeois said the conundrum of how to apply traditional taxation polices to e-business in general is creating confusion. He said neither the Canadian or American governments considered e-business when they were drafting tax laws and treaties. That leaves current federal legislation open to varied and often contradictory interpretation. He said he expected to see cautious guidelines emerge from Ottawa in the near future. He viewed e-businesses and businesses both having to tackle the sales tax hurdle – their biggest challenge. “One big concern (for B2C entities) is the fact that if you remove the costly intermediaries you still have to act as an unpaid tax collector. That’s where there continues to be confusion, the U.S. is still trying to figure that out,” he said. “[The solution] won’t happen very easily; companies will have to try to minimize those uncertainties.” – Liam Lahey

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Oracle launches e-business infrastructure

Oracle Corp. has now tossed its hat in the ring with Oracle9 i, an upgrade of Oracle’s 8 i database product, but complete with an application server. Other features include a server cache, which stores frequently accessed Web pages in memory and is run on a separate dual-processor server at Oracle’s on-line store; and an updated version of Oracle Portal, which is used for creating intranets. The cache server will also provide load balancing and surge protection. Oracle CEO Larry Ellison was adamant that 9 i would speed up any e-commerce site, boasting that such sites could triple performance on any IBM or Microsoft site by installing the 9 i suite – and if performance didn’t improve threefold, Oracle would pay that site US$1 million. Another feature of 9 i, flashback query, allows for self-servicing corrections. Oracle also added real application clustering, said to work with every platform to interconnect all applications, enabling users to cluster several servers. Other features include automated recovery, dynamic memory allocations, simplified storage and memory management, and enhanced resource management. Oracle also built in virtual private database technology, which allows a service provider to host multiple customers within a single database while preventing any company from seeing another’s data. – Victoria Berry

E-procurement services market set to roar

The e-procurement services market is starting to make some noise, according to IDC’s report e-Procurement Services Market Forecast and Analysis, 1999-2004. By the time 2004 rolls around, it will be roaring, with close to $13 billion in worldwide opportunity generated from set-up services, namely consulting, implementation and ongoing management of deployed solutions. IDC believes vendors themselves could play a large part in determining just how much this market booms. According to IDC, implementation services with large companies will provide vendors with the most lucrative opportunities. Through 2004, revenues from these services will account for about 50 per cent of the e-procurement set-up services market. Revenues from e-procurement consulting services will be the fastest growing, increasing at a compound annual growth rate (CAGR) of 62per cent from 1999 to 2004, compared with a 55per cent CAGR for the entire market. IDC also expects the proportion of business-to-business e-procurement outsourcing services to increase substantially through 2004. In 1999, just five per cent of B2B e-procurement services spending was on outsourcing. IDC predicts this percentage will increase tenfold by 2004. The firm believes most of the market’s activity in the near future will be generated by the e-procurement of indirect goods but expects e-procurement of direct goods to pick up considerably starting in 2002. – Susan Maclean

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