The Internet hasn’t made Frank Gregory rich.
But it has improved his travel schedule. He gets to sleep in his own bed more often, especially in the busy weeks before Christmas.
Gregory and his wife Claudette Ouimet run Livewire Puzzles out of their Edmonton home. Gregory, a forensics expert with the RCMP by day, handcrafts the intricate wire puzzles with jigs in his basement workshop. Prices start at $10.
“We used to do 11 craft shows a year across Western Canada,” says Gregory. “We now do two. The rest of the sales are from the website.”
And sales, the bulk of which come from the U.S., are up this year. October orders were four times what they were in 2001. Gregory is hoping for a banner Christmas season.
Ipsos-Reid, a marketing research company, recently released a study predicting online holiday sales in Canada will top $1.1 billion for 2002. Online shoppers are most likely to purchase books, CDs, toys or games.
But there are a few online retailers who wonder where all that money is going to go.
Despite selling online for five years, egolf.ca makes more than 90 per cent of its revenue from a retail store in north Edmonton.
“Like lots of people, we jumped on the Internet bandwagon. We thought it was going to take off,” says manager Gord Hayward. “It didn’t turn out that way.”
To keep costs down, Hayward and his store staff do all the updates to the website, including scanning photos of the clubs, bags, balls and clothes, as part of the daily routine. They also pack and ship online sales, which go mostly to Canadian addresses.
“I think the online business will expand over time,” says Hayward. “It’s a small part of our business now, but every little bit helps the bottom line.”
Unlike Americans, who are used to mail-order shopping, Canadians have always liked the personal experience of going to a store.
“Your average 55-year-old executive is not going online to buy. That’s not their typical buying pattern,” says Carolyn Guichon, who teaches marketing at the University of Calgary and owns a retail business.
She says most online shoppers are young people, including teenagers, who have grown up with the technology. But they aren’t typically the types who spend a lot of money at Christmas.
“I think there is a future for online shopping. We’re just a long way from it now.”
While Canadian Tire, Sears and The Bay have stuck with their online business, other retailers such as Sport Chek and Holt Renfrew have abandoned it because costs far outweighed returns. Guichon says the online businesses that have succeeded often already have a mail-order catalogue and shipping system in place.
“The Internet is just another way to promote a business or product. It’s not a new business paradigm,” says Guichon, who owns Riley and McCormick, a chain of three western clothing stores in Calgary.
Riley and McCormick launched its online shopping site realcowboys.com in 1998.
“The web is still just a fraction of our business,” says Guichon, who ships items around the world. “We get a lot more orders from the paper catalog than the web.”
BearSt.com has been around since 1995, which makes the company about 52 in Internet years, jokes Juanita Tavares, who co-owns the Calgary-based online retailer of cuddly Gund animals.
“Every year there are certainly fluctuations in sales,” says Tavares, who gives online shoppers a choice of up to 400 new and discontinued stuffed creatures. “We take it as it comes.”
Most of BearSt.com’s business goes to the U.S. and overseas. In fact, it sells more animals to Australians than Canadians.
While the Canadian dollar makes U.S. and overseas sales attractive because of the price, there are charges for duty and shipping. More customer interaction is required to explain it all. Plus, there are challenges confirming credit cards from remote parts of the world.
“Retailers also aren’t prepared for the return rate. For every 10 orders, you can get three back,” says Guichon. For Tavares, Canada Post’s new shipping regulations are eating into the bottom line. Instead of basing shipping costs strictly on weight, the new system, introduced in October, factors in the size. That hurts when what you’re shipping is lightweight but big, such as a cuddly teddy.
And the web can bring its own heartaches, too. Last year, Gregory’s puzzles.ca received an order from the U.S. for 2,000 puzzles. But the buyer needed them delivered before Christmas – only two weeks away.
“It was hard saying no to $20,000, but I just couldn’t do it,” says Gregory. “This is a labour of love. But I won’t do things at the expense of my sanity.”
A sample of Alberta-based online retailers:
* www.bearSt.com: Calgary-based company sells stuffed bears and animals made by Gund.
* www.puzzles.ca: Intricate, thought-provoking wire
puzzles handcrafted in Edmonton.
* www.realcowboys.com: Riley and McCormick’s western wear and gear from Cowtown.
* www.egolf.ca: An Edmonton golf store website with everything for the golfer.
* www.kidalog.com: Formerly Babylove, Camrose-based mail-order company popular with new moms.
* www.giftedkidz.com: Calgary online retailer of specialty toys and items for children.
* www.mountainbones.com: Canmore purveyor of fine food for canines.
* www.scrapbookersparadise.com: Calgary’s largest scrapbook store has a well-stocked online shopping site.
* www.canadiancountrygifts.com: High River online business sells a wide range of country folk-art gifts, decorations and crafts.
* www.greengate.ca: Calgary Garden centre sells
everything from tools to fertilizer online.