More Canadians are shopping online, with sales in 2007 rising to $12.8 billion, according to a Statistics Canada report released yesterday.

Statistics Canada's last e-commerce study, conducted in 2005, found Canadians spent $7.9 billion online — meaning the value of online shopping rose 62 per cent in two years.

"More than 8.4 million Canadians aged 16 and over made an online purchase in 2007, up from nearly 6.9 million in 2005," the federal agency said in a release. "They accounted for 32 per cent of Canadians in this age group, compared with 28 per cent in 2005."  Consumers in the 25 to 34 age bracket shopped online the most, with 51 per cent reporting placing an online order. Regionally, Alberta led the country with half its internet users aged 16 and up reporting shopping online in 2007.

The increase in part may be related to consumers' growing familiarity with online shopping, said Ed Strapagiel, a retail analyst with the Toronto-based Kubas Consultants who was not involved in the Statistics Canada study.

Many consumers browsing online

Statistics Canada also reported 43 per cent of Canadians used the internet to research potential purchases, including consumer electronics, housewares, furniture, clothing, jewelry and accessories.  Of the shoppers who looked online, 64 per cent said they later went to a traditional bricks-and-mortar store to purchase the product. 

Editor's Note: Look for those numbers to change drastically, maybe even reverse in next years Stats - I'm thinking instead of 43/64 it'll be 64/43. (See Paradigm Shift Post)

Overall, more than 8.4 million Canadians aged 16 and over purchased something online in 2007, up from nearly 6.9 million in 2005.  The top 25 per cent of Canadian shoppers online spent an average of $5,000 in 2007, about 78 per cent of the total dollar value.  The most common types of online orders were:

• travel services
• books and magazines
• entertainment products such as concert tickets, clothing, jewelry and accessories

Most online shoppers, 82 per cent, paid directly online using a credit card or debit card. However, 77 per cent of those who did pay online still expressed concern about using their credit card over the Internet.

(Editor's Note:  Want a secure transaction?  Swipe your own card data in the privacy of your own home with HomeATM's wedgie)

Strapagiel said the uncertain economy may prompt consumers to research online, seeking information on both products and prices. He also said e-commerce might make advances this holiday season if retailers put products on sale exclusively online.

"Much of the merchandise that is going to be in stores this Christmas has already been bought; the truck's already arrived at the warehouse," he said.  "But it was bought in a climate of [optimism] and in October that reversed very sharply. I think many retailers might be thinking in terms of let's get rid of what we have and not get stuck with the inventory. So there might be, for people who shop around there, might be some good deals to be had."

Canada a testing ground for U.S. retailers

Similarly Jim Okamura, a U.S.-based analyst with J.C. Williams Group, forecasts online shopping to continue to grow in the coming months, despite the economic slowdown.  "We're still expecting the online channel to be one of the few bright spots within retail," he said. "The greater effort by retailers, both Canadian and U.S., to target those Canadian consumers are in our estimation going to work well … I think clearly shoppers are going to be using the web in general for both research and transacting because they're obviously going to be very value-conscious."

He also noted many U.S. retailers use the Canadian market as a strategic e-commerce testing ground before moving on to the European and Asian markets.

"It is in a sense disproportionate, the amount of focus being placed on Canadian e-commerce market entries, because it's more than just the volume of business that the Canadian has to offer, it has much more strategic importance in a broader international strategy," he said.