Canadians Still Wary of E-Commerce

Although Canadians are using the Web in ever-increasing numbers, they are among the world’s most cautious when it comes to actually purchasing goods and services online, according to a study released Tuesday by American Express (NYSE: AXP).

“The 2000 American Express Global Consumer Internet Survey” found that 66 percent of Canadians polled plan to go online within the next 12 months, compared with 57 percent of people around the world who expect to do so.

“The Internet is living up to the hype in as much as consumers around the world, and even more so in Canada, are jumping on board and are interested to learn more about what it has to offer,” said Denise Pickett, Vice President of Consumer Marketing at American Express Canada. “The marketing challenge is to build the trust and confidence of consumers to encourage them to do business as well as browse.”

Canadians Lagging

Although 28 percent of Internet-connected Canadians have already bought something online and 41 percent say they plan to buy on the Web in the next year, Canada still lags a bit behind other countries. For example, in Sweden, Hong Kong and the United States, between 50 to 60 percent of Web users say they expect to be online shoppers in the next 12 months.

American Express also found that the average online shopper in Canada will make just five purchases and will spend a total of around $380 (US$) online in a year. On the high side of the spectrum, 21 percent of Canadian e-shoppers will spend more than $340.

On the low end, almost 40 percent will spend between $102 and $340.

Trusting the Major Brands

A number of concerns are keeping Web surfers around the world from buying online, according to the American Express survey. People are worried about protecting their privacy, about the the security of their financial information online, and about the quality of goods. In addition, many would-be shoppers are concerned about e-tailer return policies.

These concerns give well-established brands a clear advantage over startups, according to American Express. The survey found that 80 percent of online consumers ranked trust in the brand name of the product and the retailer among the most important factors in online shopping.

“The reality of e-commerce is still a little way off for the average consumer,” said Pickett. “But there is no doubt that once they dip their toes in the water, they become more at ease shopping or conducting financial transactions online. They also feel more comfortable dealing with brand names they can trust.”

Pickett added, “Businesses that are able to translate the physical world attributes of trust, convenience, quality and service into the online experience are the ones that will excel.”

What the World is Buying

Overall, the American Express survey found that e-shoppers around the world are purchasing the same kinds of items. Most likely to be purchased online are theater and concert tickets, followed by books, CDs, videos and computer games.

Buying groceries online was of interest in some countries, but not in others. The survey found that just 2 percent of Italians were buying groceries online, compared with 28 percent in Hong Kong.

Just Browsing

The American Express survey also found that 44 percent of online Canadians believe that shopping online is more convenient than offline, and 30 percent see it as a way to find better bargains.

However, almost 90 percent of online Canadians say that they are more likely to use the Internet to research goods and services, while doing their spending at a real-world store where they can see what they are purchasing and talk to a salesperson.

For the study, American Express interviewed 11,410 Internet users and non-users in Argentina, Australia, Brazil, Canada, Great Britain, Hong Kong, Italy, Japan, Sweden and the United States.