Even though a bit dated the “eCommerce” buzzword is still around and it is growing in awareness. eCommerce has however evolved from just describing the fact of “selling online” into a billion dollar market. eCommerce is not just a website with a shopping cart anymore, it is the “fastest retail sales channel” in the USA.

Here are a few dazzling figures that I borrowed from InternetRetailer.com and the 2007 edition of the Top 500 Guide:

• in 2006, online retail sales in the US reached $136.2 billion, an increase of 25% compared to 2005.
• most if not all of the major US retailers are selling online through what is called the “online channel”.
• the Top 500 largest retail sites in the US cover $83.6 billion (61%) and range through 14 different retail categories.

This of course didn’t happen overnight, it took more than a decade for online retail to pick up. For reminders, Amazon.com launched its online retail store in 1995. It is now ranked #1 in the Top 500 Guide, with $10.7 billion in sales in 2006. Not bad for a company that didn’t make a profit for years.

How does Canada fare in the North American market?

Statistics Canada reveals in its 2006 Electronic commerce and technology report that:

• in 2006, online sales in the Canada reached $49.9 billion, a staggering increase of almost 40% compared to 2005. However, only $15.1 billion are related to B2C (Business to Consumer) compared to the $31.4 related to B2B (Business to Business).
• in 2006, 46% of Canadian retail firms had a website, compared to 42% in 2005. A large retail firm without a website is now almost unheard of; 88% of retail firms with 100 employees or more had one in 2006.

This however doesn’t mean that Canadian retail companies have eCommerce enabled websites and I think (and I could be wrong about this) that we are far from having the online momentum to gather a Top 500 Guide as our neighbors do. If so, please someone make one for Canada!

A few other noticeable points mentioned in the Canadian report:

“In 2005, 50% of retailers that used the Internet felt that the goods and services they offered did not lend themselves to Internet transactions. Only a year later, this proportion has declined to 39%. This may be the result of innovative thinking, as more and more Canadian retail firms appear to have found a way to participate in e-commerce.

These two benefits — reaching new customers and better coordination — were often cited as reasons that e-commerce in the retail sector was a natural fit. This was also seen more generally across the economy.

It appears that in 2006, a greater number of Canadian retailers were able to recognize the potential of these previous expectations and were participating in the multi-channel shopping model that many consumers desire.”

My comments on this extract:

1. What about increase in sales? what about profit? where are the dollars?
2. Thank goodness for “innovative thinking”, it must at least take that to want to participate in a billion dollar market. This is an unfair comment but a very important one. It sounds like Canadian firms have been struggling to find a reason or an incentive to go eCommerce.

I know that this might be a long introduction to this blog but I hope I caught your attention and that you’re wondering too: “yeah! where are the dollars?” and “why are we (Canadians) so shy?”

Given these figures and also how young this industry is, one cannot deny that there is an eCommerce wave to surf. How long this wave (or the hype around it) will last, no one really knows (there are a few projections available though).
The good news is that all this is not mere speculation and theory as it could have been in the “dotcom” years. There are more and more people buying online and there are many profitable businesses, large and small.
There will be a slow down, most probably in the next 3 to 5 years. 25% increases in sales are common for young industries or emerging markets. They usually end up stabilizing in the 5 to 10% bracket.

So what is my intent through WebTarget and this blog? Well I have a dream…

I want to give Canadian organizations the means to access the knowledge and the appropriate tools to address the opportunities and challenges of eCommerce. I want Canadians to go beyond “innovative thinking” as is underlined in the Canadian Statistics report and grow their revenue from “the way they have found to participate in eCommerce”.

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