This week I read about “a report”:http://www.caast.com/release/default.asp?aID=145 conducted by “Forrester Research”:http://www.forrester.com for “CAAST”:http://www.caast.com (Canadian Alliance Against Software Theft). If you are selling online in Canada this is a scary report. It indicates that Canadians are wary of shopping online. *A full 40% of Canadians surveyed said they will not shop online this holiday season.*
Why will these Canadians not shop online?
Security.
At 40% that figure is more than double the results for a similar survey in the US.
Furthermore the report points out that, almost 90% of people surveyed said retailers have not done enough to protect consumers online and are worried that family members are not always aware of security threats. One way these people are trying to address this issue is by using security products on their computers. Two-thirds say they have about three such products installed
What’s worse for those companies or people using eBay, almost 80% of survey responders said they are concerned about shopping at online auction sites.
Here are some other interesting points in the report:
* Only 64% of Canadian feel a symbol indicating website security will ease their concerns
* Canadian are not familiar with terminology used to describe the latest security threats like pharming, phishing, and malware
* A full 78% said they would like to be more educated when it comes online security matters.
I did a little polling of my own over the last couple of days. My sample was friends and family that are not involved in marketing. Basically they validated the report’s findings. Almost everyone indicated they don’t even trust many brand-name sites for fear of fraud. Their misconceptions include thinking that complete websites could be run by cyber criminals in the process of phishing. However, everyone felt they could trust their bank’s website if they entered the URL themselves and logged in manually.
If people trust their banks maybe banks should set up shopping portals similar to what “Air Miles”:http://www.airmiles.ca did with their “YourShops.ca”:http://www.yourshops.ca shopping portal.
Here are some of my recommendations for Canadian companies looking to sell online:
# Make sure you provide plenty of easy-to-access information to educate potential shoppers once they get to your site. Explain known concerns, how you are dealing with these issues, etc.
# Keep your information simple. Don’t use jargon.
# Let people know about the various credit card policies that actually protect them from online fraud. Link to information pages on the credit card websites.
# If you use email in your marketing mix consider dedicating one deployment to educating your database about the issues of shopping online and how you are dealing with these.
# If using a third party to process your credit card transactions make sure you explain why the URL (website address) is different and how this is a good thing.
# Avoid asking for too much information in the check-out process. Try and use previously captured information and match it up with the transaction data at a later date.
# If possible, provide a telephone number people can use to reach a live person if they have any issues with their transaction.
I plan on buying a number of my holiday gifts online this year. I know that e-commerce is safe when dealing with reputable brands. I also know that my CIBC Aerogold VISA protects me from fraud if I take the right precautions. Now let’s all work to help most Canadians get comfortable with shopping online.
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I agree with Stefan. I really think Canadian retailers need to put a lot more effort into educationg consumers on how easy it is to be a safe online shopper.
The day this report came out it was the lead story on nearly every news show, but I watched 2 or 3 of these reports on different channels and didn’t see any represenatives from any major retailer providing a counter point to the “so and so lost $20,000 4 years ago when he shopped online” stories.
There is, of course, a flip side to this report. That 60% of consumers plan to do some online shopping this holiday season is pretty good. We’re doing our annual survey on RedFlagDeals.com and although our survey is skewed, it’s encouraging to see that 90% of our readers will be shopping online this holiday season. We do our best to educate our readers about which stores are reputable and how to avoid common scams, and it seems to be working. Now if the online retailers stepped up their efforts, it would be a very merry Christmas for everyone. 🙂
Thanks for the input, Ryan. After I wrote this post Bill Sweetman offered up his own post covering a fresh blast of “e-commerce genius”.
Read his post about Henry’s (the retailer of photographic products and equipement)…
http://www.onedegree.ca/2005/11/30/observed-eight-words-that-rocked-my-world
Security really shouldn’t be a big issue here. What little choice we have when it comes to online shopping in Canada is offered by established, reputable national brands with local community presence. A pretty trustworthy bunch.
Could it be… At least 40% of Canadians live just a short drive away from the brick-and-mortar outlets of the Canadian retailers that operate online stores in Canada.
Why risk security issues, pay for shipping, wait for delivery, drive to the post office with the door knob hanger after work, deal with returns of ill-fitting, disappointing merchandise?
If this factor wasn’t explored in the survey, then the respondents who stated “security” may simply have opted for the next-best reason.
I’ve never run across a mention, let alone a discussion of this reality as a possible factor.
It’s the reason I don’t shop from Canadian sources. I only visit Canadian sites to view merchandise and pricing then I check store inventory and go. I’m sure I’m not alone.
If a Canadian retailer were to offer web exclusives – unique merchandise, preferred pricing, loyalty programs – they would likely get my online business.
But it’s not in the best interests of the big retailers to convert local customers into online purchasers. In-store shoppers tend to buy on impulse, spend more than they intended.
The worrisome aspect of this survey: it could dampen the enthusiasm for ecommerce among Canadian consumers and (worse) small businesses that are actually in a position to benefit from building an online store specifically because they DON’T have physical assets on the ground across Canada.
In my opinion and based upon the survey I carried out on behalf of one of our large retailer US client, you can’t blame Canadians for not shopping online. Canadian retailers haven’t done a good job in offering content-rich and new incentives to Canadian shoppers. If we can bank online, buy travel online, then why not buy gifts online.
Few merchants that are moving quickly in Canadian scene are:
http://www.bestbuy.ca
http://www.musaras.ca
http://www.travelocity.ca
I totally agree with Steve’s comments. Canadians are one the most technology savvy nations in the whole world. It’s about time we wake up and take the lead in ecommerce. Kudos to companies like Musara’s, BestBuy, bizpoint.ca for taking the initiative in Canadian ecommerce.