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Pace of online sales growing five times more than traditional retail: report

Pace of online sales growing five times more than traditional retail: report

Canadians are doing more clicking and shopping than ever before, helping e-commerce sales grow more than five times the pace of overall retail sales in 2012 compared to a year earlier, according to new data from Statistics Canada.

Still, our online shopping penetration remains well below our neighbours to the south, which experts say shows Canadian retailers could be doing more to boost their online revenues.

The data released on Tuesday, shows e-commerce sales from Canadian retailers reached $7.7 billion in 2012, the latest data available. That’s an increase of 16.3 per cent when compared to $6.6 billion in 2011.

The statistics include items purchased by people in other countries but not Internet purchases from non-Canadian retailers, StatsCan says.

It also says e-commerce sales accounted for 1.5 per cent of total retail sales, which hit $502.6 billion in 2012. That’s up 2.9 per cent from $488.3 billion in 2011.

While Canadians may be known for spending a lot of time online, our ecommerce sales are still a lot lower than in the U.S. where ecommerce accounted for 5.2 per cent of total retail sales in 2012, StatsCan says.

“[Amazon.com founder] Jeff Bezos is probably wringing his hands thinking about the opportunity in Canada,” says retail consultant Doug Stephens, founder of Retail Prophet.

“We are underserved by domestic ecommerce,” he says, noting that some of our largest retailers like Shoppers Drug Mart don’t sell online, while Canadian Tire has only just started offering consumers the chance to order products online and have them shipped to a nearby store.

Amazon.ca has been ramping up its online store, adding more than a million new products to its Canadian website in recent months, including items such as car parts, musical instruments and wireless products.

Stephens says Canadians are also well served by bricks and mortar stores, because our population is dense, concentrated within a couple hours of the U.S. border.

“Either stores are doing such a great job of serving us through physical locations, or we’re not being serviced properly by ecommerce,” Prophet says. “I think it’s a bit of both.”

It’s less surprising that Canadians aren’t spending at the same rate online as Americans when considering the pickup in the U.S. economy in recent years. Also, Americans are spending a bit more time online than Canadians for the first time in years.

A recent comScore survey shows Americans spent an average of 36.2 hours online each month, based on data from the fourth quarter of 2013, more than 10 other countries surveyed. The United Kingdom was just behind them at 36 hours, while Canada came in third at 34.6 hours. The average among countries including China, Russia, Germany and Brazil was 24.2 hours per month. Canada did rank first for average monthly visits, the survey shows.

A 2012 comScore survey showed Canadians were the most active online among, surfing the net for about 45 hours a month, well ahead of the U.S. at 38.6 hours per person. Back then, comScore said Canada represented “a fertile ground for digital marketers and advertisers.”

The latest StatsCan data from 2012 says about 40 per cent of the ecommerce sales came from electronic shopping and mail-order retailers in 2012, up from 38.6 per cent in 2011.

Another 34.8 per cent were from motor vehicle and parts dealers, which is actually down from 36.5 per cent the previous year.

The remainder of retail ecommerce sales came from electronics and appliance stores (7.1 per cent), clothing and accessories (4.5 per cent), sporting goods, music and book stores (2.6 per cent), and “other” retailers (10.6)

The report only includes Canadian retailers. Last fall, StatsCan did a report including wholesale trade, manufacturing and retail businesses. It showed Internet sales for these businesses rose 12 per cent to $136 billion in 2013, up from $122 billion a year earlier.

Sales in all three categories accounted for 61 per cent of the value of ecommerce sales, driven by large companies of more than 100 employees. It said about 13 per cent of companies sold goods or services over the Internet in 2013, up from 11 per cent in 2012.

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