News, Views, Stuff You Might Have Missed

Canadians prefer home-grown content and are loyal to Canadian information and e-commerce sites, according to a recent study by Angus Reid Group Inc.

The study shows Canadian Web surfers are more likely to visit Canadian sites over American sites for world, financial and sports news. Among Canadians who visit Web sites that include world news, 45 per cent generally go to Canadian sites vs. 7 per cent who visit American sites.

The pattern is similar among those who visit sites offering financial news (51 per cent prefer Canadian sites compared to 4 per cent who prefer American sites) and those who visit sites with sports news (36 per cent go to Canadian sites vs. 10 per cent who prefer American content).

In terms of e-commerce, the study reveals cost is a key reason for buying products on Canadian sites, although 86 per cent of respondents say they do because they want to keep money in Canada.

"Cost was a major issue -- the exchange, the duty, the shipping. Even though it is a major issue that is driving people to purchase from Canadian sites, it's good to see the reason so many people do it is because they just want to keep their dollars in Canada," says Chris Ferneyhough, senior research manager for Angus Reid Group.

According to Ferneyhough, the market research firm thought it would be interesting to analyse how Canadian Web sites fare against the dominant number of sites south of the border. He says he is quite surprised at how loyal Canadians are to dot-ca sites, and Canadian sites in general.

"With the number of American sites out there and the number of American sites that get the media coverage, it's good to see Canadians are going out and finding Canadian sites and using them on a consistent basis," he says. "With radio and television, we've got the CRTC that's supposed to be regulating what we're watching and specifying there is a certain amount that has to be Canadian content. We don't need to do that with the Internet -- it's unregulated. But, Canadians are still going to Canadian sites and reading Canadian content."

Not all Canadians agree, however. "I can't speak for the population in general, but I don't have any such loyalty," says Larry Karnis, president of Brampton, Ont.-based Application Enhancements Inc. "I do a modest amount of business on the Internet, and when I do, it's usually to a site that has what I need when I need it, and can get it to me in a reasonable amount of time at a reasonable cost."

Karnis says the major e-commerce sites he deals with are equally polished.

"I don't really perceive any benefit of using Chapters over Amazon or vice versa, except for the fact that Chapters will deliver the book without having to cross the border and will charge me in Canadian dollars," Karnis says. "The fact is both of those companies are going to charge near full retail for the book. I don't know if it's so much that (Canadians) feel an overwhelming sense of loyalty to Canada and want to keep our money here. I think it's just that they are afraid of being charged in U.S. dollars."

Karnis says he feels Americans tend to be faster adapters to technology than Canadians are.

"I'm not saying Canadians are technophobes. It's just that when new things come out, it tends to break the American market first and then Canadians tend to look at what succeeded, as opposed to being slightly more risk-oriented." --Nikolina Menalo ELECTRONIC BILLING PAYING BILLS ON-LINE APPEALS TO CONSUMERS Canadian consumers and businesses are becoming more geared toward Electronic Bill Presentment and Payment (EBPP), according to a joint survey released by Web development and Internet billing specialist Optus Corp. and The Angus Reid Group.

"The main purpose (of the survey) was to gain insight from a consumer and business perspective of the main benefits and barriers of electronic bill presentment and payment," says Camilla Lauricella, vice-president of technology research with Toronto-based Angus Reid.

EBPP refers to receiving, viewing and paying bills and statements via the Web. According to Optus, it has been widely called one of the next killer applications of the Internet.

"The killer application notion came out of the belief that this is actually probably some of the most compelling content you could offer to customers that would ensure that they come back to your Web site consistently," says Jon Hantho, president and COO of Optus in Toronto.

According to the survey, 53 per cent of Canadians are aware of EBPP and 35 per cent are interested in using the technology. Interest jumped to 47 per cent for those who have access to the Internet. Nearly nine in 10 Canadian businesses that issue bills and statements to consumers are actively considering delivering those documents via the Web. Furthermore, 85 per cent of those companies plan to stop sending traditional paper statements.

IDC Canada analyst Jordan Worth says EBPP is a cost -saving option.

"The cost of transmitting a bill electronically is a mere fraction of what it would cost to handle the paper processing and postage needs....It's quicker. Getting it to the client quicker means (the biller) will get paid faster."

Business survey respondents say EBPP will be the option of choice for 29 per cent of their customer base within the next two years.

"These aggressive predictions are very realistic, given the extent of on-line activities already being undertaken by Canadians," Hantho says. But, he adds, on-line payment is not a catch-all option.

"Some people will still want it in paper, so [billers] will have to support two infrastructures," he says.

IDC's Worth points out another major drawback. "You (have to) have a computer to be able to receive these bills, and not everyone does," he says. "There is a large percentage of the population that isn't in the position to receive these bills."

According to the survey, less than 10 per cent of Canada's top billing organizations operate fully functional EBPP systems where customers can do everything on-line in good time -- from bill receipt to payment to account inquiry.

Hantho says 56 per cent of Canadian companies contemplating EBPP are still in the planning stage, yet 40 per cent think they can get their system operational in six to 12 months.

Angus Reid's Lauricella says from a consumer perspective, there are numerous benefits of EBPP. "The top two that came out were convenience of one location and then instant access."

Business respondents identified cost reduction and customer relationship management as the top two corporate drivers of EBPP. --Nikolina Menalo HIGHS & LOWS MARKET WATCH Shop.org finds in a recent survey that e-commerce companies are cutting down on their advertising costs and finetuning their marketing strategies as part of an increased focus on becoming profitable. According to the survey conducted jointly by Shop.org and The Boston Consulting Group Inc., on-line retailers spent less money on building up consumer awareness of their Web sites and more on retaining customers during this year's second quarter than they had previously. Almost half of the second-quarter revenues reported by survey respondents came from repeat buyers, up "significantly" from last year, Shop.org says. The survey also finds on-line retailers are shifting their advertising away from TV campaigns to less-expensive on-line marketing venues. For example, 28 per cent of the 66 North American retailers surveyed say they reduced or cancelled TV advertising, according to Shop.org. The average percentage of marketing budgets spent on-line increased from 49 per cent in this year's first quarter to 59 per cent in the second quarter. Shop.org says the shift toward on-line advertising and marketing helped reduce the average cost of finding a new customer to US$40 in the second quarter, down from a high of US$71 during the fourth quarter of last year. For more information about Shop.org research, visit www.shop.org.

The Conference Board of Canada says a new study shows the costs associated with taking companies public are lower in Canada than the United States. Using IPO data from 1998 and 1999, the study entitled Going to Market: The Costs of IPOs in Canada and the United States confirms a 1994 Conference Board finding that direct costs of going public are lower on the TSE than on Nasdaq or the NYSE for all offering sizes. According to the Conference Board, on a weighted average basis, direct IPO costs per dollar raised were 5.5 per cent on the TSE, 8.7 per cent on Nasdaq and 6.6 per cent on the NYSE. The study also examines indirect costs, measured as the percentage difference between the offer price and the closing price on the first day of trading. Weighted by offering size, IPOs on the TSE were underpriced by an average of 5.8 per cent, compared to 49.6 per cent on Nasdaq and 10.9 per cent on the NYSE. Copies of the Conference Board report are available at www.conferenceboard.ca. --Linda Stuart DISTINCTLY CANADIAN A PLACE OF OUR OWN Situated next door to a global superpower, Canada has always found itself overshadowed economically and culturally by the United States. Canadians are particularly sensitive about suggestions that our country lacks a distinct character of its own. This may explain why Joe Canadian's impassioned pro-Canada speech in Molson's "I AM Canadian" TV ads earlier this year struck a chord with beer drinkers and teetotallers alike.

The findings of two recent studies show Canadians do differ from Americans when it comes to Internet usage and on-line purchasing. Though the findings don't paint an entirely rosy picture of the Canadian e-landscape, patriotic Canadians will be relieved to know there are some clear differences between the two countries.

According to a study conducted in May by Nielsen/NetRatings, Canadian Web surfers spent nearly 30 more minutes that month on-line than U.S. Internet users, averaging more sessions and page views.

All this despite the fact that the United States has 10 times more active Internet users than Canada, says Sean Kaldor, vice-president of e-commerce at NetRatings. According to the study, the number of active Internet surfers in May totalled 8.1 million in Canada, as opposed to 82.7 million in the United States. The average number of unique Web sites visited in May per person was 18 in Canada and 10 in the United States.

Kaldor says the reason Canadians are spending more time on-line is hard to nail down. "I think there is better use of the Internet by the (Canadian) government," Kaldor says. "There's a smaller, more focused group of retailers and merchants in Canada, and they have strongly embraced the Internet to protect against the American retailers moving into Canada."

While Canadians on average may be surfing more than Americans, they don't appear to be buying goods and services on-line as much as their U.S. counterparts. The Boston Consulting Group's recent Winning the Online Consumer in Canada study shows Canadian Web users are actively browsing but reluctant to make on-line purchases.

According to Boston Consulting Group, only 43 per cent of Canadian Internet users have purchased goods or services on-line, compared with 51 per cent of U.S. Web users. When they do make on-line purchases, Canadians tend to spend less than Americans. The typical Canadian on-line buyer conducted five transactions and spent CAN$220 over the last 12 months. American on-line purchasers averaged 11 transactions and spent CAN$705 over the same period, according to the study.

Both Canadians and Americans cite privacy and security concerns as key barriers to purchasing on-line, but Canadian survey respondents exhibit a higher level of sensitivity in this area, according to the study. --Nikolina Menalo and Linda Stuart REALITY CHECK WE'RE NOT EXACTLY RAKING IT IN While last year more than half of Canadian businesses used the Web (for various business processes), Internet sales represented only a tiny fraction of the country's total economic activity, according to Statistics Canada. StatsCan found that although 10 per cent of the companies used the Internet last year to sell their goods and services, the transactions they conducted on-line accounted for only 0.2 per cent of their business. Economists emphasize this is an area that will grow in the future, and as these findings are from last year, it is possible the numbers have already grown substantially. As one economist notes, Internet time operates faster than normal time. --CxO.ca staff

Join the newsletter!

Error: Please check your email address.

More about Angus Reid GroupBoston ConsultingBoston ConsultingIDC AustraliaMolsonNetRatingsNielsenNYSEOptusTechnology ResearchUnique Web

Show Comments