This year I have made a commitment to myself to save on the hectic holiday crush and do at least 80 per cent of my shopping online.

Sadly, that decision has cut-out a lot of Canadian companies who have not yet implemented e-commerce enabled websites, a risky decision when you consider that the growth of Canadian online purchases is expected to outpace the US until 2016.

Just how many Canadian companies have implemented e-commerce storefronts? The answer, in my opinion, is too few. Especially amongst smaller companies.

Too many Canadian companies buy, but don’t sell

While over 90 per cent of Canadian small and medium-size enterprises (SMEs) have a high-speed Internet connection, just 70 per cent have established a website and a just 18 per cent make online sales, according to one 2011 survey.

In contrast, according to a 2010 study the second most common use of the Internet by Canadian consumers was “window shopping or browsing for goods and services online”.

So Canadian businesses seem happy to use the Internet to make purchases (70 per cent) yet they are leaving the potential to make sales to other companies. Companies, from my recent experiences, that are either huge players, like Chapters/Indigo and Amazon… or are based outside of Canada.

Canadian shoppers looking south of the border

A recent study from Visa Canada shows that my experience in looking south of the border to find the gifts I want is not unique.

Almost 44 per cent of all Canadians have said that they are likely to take advantage of holiday specials in the US like Black Friday weekend by shopping at US storefronts, a number that is up 10 per cent from 2011.

Canadians expect to spend $220 online this holiday season, with men likely to spend more – $235 on average compared to $208 for women.

Overall that is a slight dip in online spending when compared to last year, although it is not clear whether this is because shoppers expect to be more frugal this holiday season overall or because they plan to spend less online.

Companies selling niche products, services still have best opportunity for online sales

If your company is a convenience store selling an assortment of snacks and household basics, chances are pretty good that you would not benefit from an online store.

Yet if your company sells anything unique, you need to be online.

I recently met a dynamic business owner who creates a line of organic, gluten free make-up and beauty products that her clients rave about and are a fraction of the price of her competition. Yet her website is almost impossible to find (a topic for another article) and her products are buried in her website and are not available for sale online.

That is an opportunity lost – literally – because this business has customers who literally take mini-vacations to travel to her spa and could easily become strong online advocates.

When selling online prices needs to be realistic

Yet another problem some Canadian companies seem to have is that their pricing is out-of-date and overinflated compared to what things costs online.

I recently bought a tradeshow TV stand online, from a US vendor, after my search in Canada showed that pricing was more than double for the exact same product. Shipping was not cheap, but it was far less expensive than the Canadian pricing that was inflated by $450. It was exactly the same product, to the point where even the same photos were being used to promote this TV stand.

The days of believing that Canadian companies will be content to pay inflated prices to local vendors for products that were previously hard to source are quickly coming to an end. Rather than asking how your sales will be hurt if you lower your prices, ask instead how your customers will view your company when the discover that they are being significantly gouged when they do business with your company.

Does shipping influence the number of places people shop?

While I have never seen a formal study about the impact of shipping cost on the number of stores someone is likely to shop at online, I would expect a tangible impact just based on my own behaviour.

For starters, many online stores offer free shipping once a certain dollar amount is reached. Why spend $10-$20 to ship a product, when you can instead just spend an extra $10-$20 to receive free shipping?

For the international orders I have placed, I try to concentrate my purchases into a single order. That’s because whether I order 1 or 100 products, I can expect to pay a custom charge on my order. I first discovered this after being charged $22 to bring in a review copy of a book from the US, for a book that would have cost me $14 if I’d bought it locally.

Then there is the convenience factor. Not all stores offer free shipping, which adds to the appeal of an online store like Amazon.ca. By ordering from the Canadian store shoppers benefit from the free shipping offer, yet can also order a wide range of products that include games, electronics and movies.

Recognizing this likelihood of orders being distributed over fewer stores is an important consideration when deploying your own e-commerce strategy.

Independent stores can benefit more than franchisees from e-commerce deployment

I encountered that the other day when making a purchase at Staples. I had dropped into the local store to pick-up a keyboard when mine suddenly broke and was surprised that the online price was $20 less than the in-store price. The e-commerce deals, including a special coupon I received in the mail that was only valid at the online store, were a strong disincentive for me to shop at the bricks and mortar store. If my need had not been immediate I would have shopped online.

Here we see a unique opportunity for smaller, independent retailers to compete against larger franchise stores. Because while the franchise stores may have sophisticated e-commerce storefronts, money from those sales goes directly to the head office, bypassing franchisees.

In contrast, independent retail stores that implement an online storefront benefit from getting 100% of the revenue of the extra goods sold online. Adding e-commerce has a customer service element to, as it provides customers with the convenience of having another way to shop.

Time for Canadian companies to wake-up

Now the exact numbers can be debates; we could look at surveys from different organizations and pick apart just how low the numbers really are.

Yet that would detract from the real point, which is that too few Canadian companies are taking steps to ensure that they do not lose out on online sales opportunities. Particularly smaller companies in retail.

Malcolm Gladwell wrote that being confronted with a situation that is fearful is not enough to cause someone to act. If this is the case for Canadian companies, the answer would seem to be that business owners need a clear path of action in order to move forward.

With just 6 weeks to go until December 25, there is little time for merchants to act for the 2012 holiday season. So if you are one of the many Canadian companies that has not yet implemented an e-commerce storefront, we would encourage you to make this a priority for Q1 in 2013.

To help we will be publishing A Ten-Step Primer for Selecting an Effective E-Commerce Storefront in the January issue of CanadaOne.

Sources

E-Commerce in Canada: Pursuing the Promise
http://www.davidsweet.ca/cms/images/pdf/ecommercereport.pdf

Individual Internet use and E-commerce
http://www.statcan.gc.ca/daily-quotidien/111012/dq111012a-eng.htm

Canada Grabs Greater Share of Ecommerce Sales in North America
http://www.emarketer.com/(S(t1dbt545e1mlujiknbqcinbo))/Article.aspx?R=1009328