Business-To-Consumer Online Sales Expected To Reach $4.1 Billion In 2000 -- More Than Double 1999's Spending

Online spending will increase significantly this year--and Canadian retailers will benefit the most according to a jointly issued study on behalf of Angus Reid and J.C. Williams Group. Online e-commerce spending among consumers is expected to hit at least $4.1 billion in Canada in 2000, an increase of nearly 2 189 times over 1999's spending level of $1.65 Billion. This is according to the results of an Angus Reid Group online survey conducted among 1,125 web users in March of 2000.

Since late last year, there has been a dramatic increase in the online shopping activity due to the increased availability and selection of Canadian e-retailers, a growing critical mass of online buyers, and increased spending among experienced users.

In effort to understand where those dollars are being spent, J.C. Williams Group and Angus Reid asked Canadians where their e-retail purchases are being made, and found that Canadian retailers have made exceptional gains in a relatively short period of time. Back in Q1 of 1999, 62% of online purchases were made at U.S. sites, and 28% at Canadian sites. By Q4 of 1999, this had reversed, and 52% of purchases were at Canadian sites compared to 44% at U.S. sites. The most recent wave of the survey, conducted in the first quarter of 2000, has shown that the momentum that Canadian retailers gained over the Christmas shopping season of 1999 has carried over into 2000. The joint study found that 58% of Canadian online shoppers in Q1 of 2000 made their most recent purchase at a Canadian site (and only 37% at a U.S. site)

"The so-called Internet Trade Deficit has disappeared in the past twelve months," said Steve Mossop, Senior Vice President and leader of Angus Reid's Canadian Internet practice. "This surprising turnaround speaks volumes to the recent success of Canadian online retailers, and levels the playing field with the U.S. e-commerce giants."

"This complete turnaround since last year and repatriation of e-retail spending is a good sign, and demonstrates how Canadian retailers have the ability to compete with their U.S. competitors by providing Canadian consumers with relevant online shopping opportunities," stated Michael Szego, Consultant with J.C. Williams Group. "Although many U.S and international retailers are likely to begin providing Canadian shipping options in the next 12 months, we expect that with the planned e-commerce launches of established Canadian retailers and the broadening of product selection at existing Canadian e-retailers, Canadians will continue to spend at Canadian e-retail sites."

Angus Reid and J.C. Williams Group also announced today a partnership to conduct the second annual Retail.ca: Connecting with Canadian E-Shoppers e-retail study. This industry leading study measures Canadian online retail activity, online spending and consumer satisfaction with buying on the Internet. The relationship between the two companies is ongoing and will extend to other online projects, the companies said.

"With their vast experience conducting research and a leadership position in Internet research in Canada and around the world, Angus Reid was a natural partner for us as we conduct the second annual Retail.ca study," said Szego. "By leveraging the vast resources and knowledge of Angus Reid, Retail.ca will be reinforced as the leading e-shopping report on Canadian consumers."

"We are extremely pleased to be working with J.C. Williams Group on Retail.ca," Angus Reid's Mossop said. "J.C. Williams Group is a recognized leader in Canadian retail consulting and online retailing. This experience, combined with our track record in examining a wide variety of trends in the Internet sector since 1995 through our "Canadian Inter@ctive Reid Report" meant a natural fit with our organization that will ensure that we provide the most relevant, actionable information for our clients in this sector."

Further findings from Retail.ca will be released in the Fall of 2000.

J.C. Williams Group (www.jcwg.com) has gained recognition in the field of strategic marketing, retail research and E-commerce. A full-service retail and marketing consulting firm with offices in Toronto and Chicago, J.C. Williams Group offers practical, creative, and in-depth knowledge of retailing and marketing. For further information please contact Michael Szego, J.C. Williams Group 416-921-4181.

The "Canadian Inter@ctive Reid Report" is the largest, most comprehensive and authoritative source of its kind about quarterly Internet trends in Canada. The results are based on two separate data collection instruments. In the first, 1,125 web users from Angus Reid Group's Canadian Internet Panel are surveyed online. Panelists are chosen through random telephone surveys conducted on an ongoing basis across Canada. Results are complemented by a further 1,500 interviews via telephone with Canadian adults in order to verify results of the pane, and track issues among non-Internet users.

These data are statistically weighted to reflect the population proportions of regular online users by length of access to the Internet and online expertise, regional distribution, as well as demographics such as gender, age and income. Our panelists represent approximately 11.4 million Canadian adult Internet users who are online for one hour a week or more (there are a total of 14.4 million adults who have Internet access).

With a national sample of 1,000 and 1,500 (for each component), one can say with 95% certainty that the overall results are within a maximum of 177 3.1 percentage points of what they would have been had the entire population of Canada's regular online users been surveyed. The margin of error will be larger for sub-groupings of the survey population.

For more information on this media release, please contact:

Steve Mossop
Senior Vice President
Angus Reid Group
(604) 257-3200

or

Michael Szego
Consultant
J.C. Williams Group
416-921-4181