December 26, 2006, 12:00 AM

Canadian online retailing slower to develop

Canadians are world leaders in broadband penetration and time spent online. But when it comes to online retail purchases, Canadians strongly prefer buying in the store and that behavior has resulted in a stagnant e-commerce market, says eMarketer.

Canadians are world leaders in broadband penetration, time spent online, electronic banking and bill paying. But when it comes to online retail purchases, Canadians strongly prefer buying in the store and that behavior has resulted in a relatively stagnant e-commerce market, says a new report from eMarketer Inc.

Shoppers complain that web retailers are not serious about selling, while retailers have not seen enough people shopping online to justify the cost of developing a good site, the report says. Retailers also use the Internet primarily as a business-to-business sales channel. "To assure the continued growth of Canadian e-commerce, retailers must provide consumers with an online shopping experience that is satisfactory from beginning to end," says eMarketer senior analyst Jeffrey Grau. "The problem is that some large retailers have neglected their web sites. This is apparent from their lack of selection, poor web site design and limited features and functionality. They have trouble tracking orders and meeting delivery deadlines."

In 2007, Canadian web shoppers are expected to generate estimated sales of about $10.5 billion, an increase of 26% from estimated e-commerce sales of $8.3 billion in 2006, according to eMarketer. “There are signs that the slow-to-develop Canadian retail e-commerce market is gaining momentum,” says Grau.

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