Online Gift Buying in Canada Set to Double This Holiday Season

Vancouver, Nov. 2, 2000 - Canadian on-line retailers can expect their busiest holiday season ever as more shoppers spend more money on-line at Canadian web sites, new findings from Ipsos-Reid, Canada's leading public opinion and market research company, show.

The study of 1,000 regular Internet users shows that the Web is poised to play a much greater role during the critical November-December holiday shopping season this year, as nearly one-in-five (18%) Canadian Internet users indicate they are likely to purchase gifts over the Internet. An additional 28% of Internet users indicate that they `might' buy online this holiday season.

On average the 57% of Canadians who are regular Internet users plan to spend $900 in gifts over this holiday season, up 25% over the previous year's tally. More significant is the fact that a greater proportion of total expenditures will be online relative to last year. Canadian Internet users planning to purchase gifts online indicate that they will make 27% of their entire gift purchases over the `net, compared to 12% in 1999, and only 3% in 1998. These findings emerge from an Ipsos-Reid study conducted with 1,000 Canadian Internet users in late September, 2000.

Based on these findings it is projected that - conservatively -- more than $535 million will be spent on Internet gift purchases among all Internet users in Canada, which would represent a significant increase from the approximately $282 million that was projected to be spent online during the 1999 holiday season when a similar study was conducted at this same point last year.

"Last year's Christmas shopping period was a significant turning point for Canadian e-retailers" says Steve Mossop, senior vice-president of Ipsos-Reid. "This year, results show that 1999's performance was not a one-time blip, and that the momentum going into the fourth quarter this year is even stronger. Yet the challenge for retailers will be in providing seamless customer service and on-time delivery, two problems that could still result in this sector not reaching its full potential."

Online book and CD retailers are in the best position to enjoy the expected increase in online purchasing this holiday season as 70% of probable online purchasers plan on buying books online, and 63% are set to buy CDs, tapes, or videos. Other popular items include toys (48%), computer software (31%), services such as vacation trips, theatre or tickets (29%), apparel (27%), or gift certificates (21%).

Canadian retailers are poised to benefit significantly from this bonanza. Last year, 52% of online purchases during the Christmas season were from Canadian-based retailers, and this has steadily increased throughout the year to the current level of 57%. Based on most recent purchases in the third quarter, seven of the top ten websites are Canadian, with chapters.ca holding the number one position, capturing 13% of most recent purchases, followed by amazon.com at 8%. Other notable Canadian retailers in the top ten include sears.ca, columbiahousecanada.com, ticketmaster.ca, indigo.ca, and futureshop.ca, and quicken.ca. Cdnow.com and Ebay.com also appear in the top ten.

"Given that the market has been particularly unforgiving to money-losing online retailers, this news couldn't come at a better time," says Mossop. "It appears as though this holiday season may also represent yet another turning point in the e-retailing sector."

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, 1,000 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 panel, and track issues among non-Internet users. The most recent quarterly results were collected between September 14th and 30th, 2000.

These data are statistically weighted to reflect the population proportions of regular online users by online expertise and regional distribution. Our panelists represent approximately 12.4 million Canadian adult Internet users who are online for one hour a week or more (there are a total of 15.3 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.

Established in 1979, Ipsos-Reid is Canada's leading market research and public opinion company. Its is best known for the Angus Reid Express Poll, the most widely quoted source of public opinion in the country. Founded by Dr. Angus Reid, Ipsos-Reid has conducted extensive market and social research in 80 countries and in 40 languages, and serves clients around the world through more than 300 professionals and 1,000 data collection staff in ten offices. The company is a member of the Paris-based Ipsos Group, ranked among the top ten research companies in the world.

For more information on this news release, please contact:

Steve Mossop
Senior Vice-president
Ipsos-Reid
(604) 257-3200