“Don’t let American companies who are aggressively selling their goods and services over the web steal your business.”
That was the warning of Geoff Ramsey, CEO and co-founder of New York-based research firm eMarketer.
He found a receptive audience among the 250 or so big-brained Canadians assembled by Industry Canada recently for a think-a-thon called “From E-Commerce to E-Economy.”
They certainly had the right people in the room, including the presidents of IBM Canada, HP Canada, Microsoft Canada and Cisco Systems Canada. Former government ministers such as John Manley and Perrin Beatty joined current Minister of Industry David Emerson. Professors who study why and how people shop online rubbed shoulders with folks with axes to grind or products to sell.
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| Geoff Ramsey says Canadian firms need to stand up their U.S. counterparts. |
And, of course, Madison Avenue cool guy Geoff Ramsey, who gave the keynote speech.
Ramsey backed up his advice to Canadians with statistics from his firm’s library of 30,000 charts. He praised Canada for having the world’s fourth-highest penetration rate of broadband Internet into households, after South Korea, Hong Kong and Taiwan. (Canada stands at 36.2 per cent versus only 22.5 per cent in the U.S.)
But Ramsey also predicted that Canada’s ranking will drop by 2007, as other countries beef up their broadband. He noted that ordinary citizens in South Korea already enjoy faster connections than most North American businesses. In terms of price, Japanese can get eight megabit-per-second broadband Internet access for $10 US a month. Canadians pay lots more for much slower connections.
But it’s not so much raw speed as what you do with it. Canadian businesses have definitely embraced Internet access, the conference heard. In 2003, 78 per cent of them were online. They sent e-mails and looked at websites. However, only 37 per cent reported that they made online purchases, and just seven per cent sold goods over the Web.
Analyst Steve Butler, who prepared the eMarketer study, concluded that “the time has come for Canadian businesses to move beyond basic e-mail communications and e-commerce by investing in more advanced e-business solutions.”
Ramsey said this means that large firms and governments should set an example by aggressively pursuing deeper e-business solutions.
“Through collaboration, they should push their key suppliers, trading partners and small businesses to do the same,” Ramsey noted. “If we’re all integrated and the supply chain is all connected up through electronic means, we’ll all save money and we’ll all enjoy the rewards.”
Ramsey noted that Wal-Mart has been nudging its suppliers to go high-tech with a controversial program requiring radio frequency identification tags for product tracking. “That’s the kind of action that needs to happen in Canada,” he said, “where large companies who have the wherewithal, the technology and the deep pockets push their suppliers to do likewise.”
He added small businesses should take another look at e-business, because the technology is getting better and cheaper.
Canada clearly lags behind the U.S. in consumer e-commerce spending. A recent Statistics Canada study found that Canadians did just over $3 billion Cdn worth of consumer e-commerce transactions in 2003. The comparable U.S. figure, as supplied by Ramsey, is $94 billion US, or $120 billion Cdn.
So, instead the expected 10 times our spending, the Yanks are 40 times bigger online spenders. Ramsey attributes Canada’s lacklustre online buying behaviour to factors such as shipping costs, exchange rates, and the goods and services tax.
Most online stores are U.S. based, and many will not even ship to Canada. They certainly don’t offer catalogues in both official languages.
Canadians do seem very fond of buying and selling on eBay, and its Canadian vice-president and country manager, Gary Briggs, is a happy man. Briggs made a strong argument at the conference for letting consumers decide what they want to do in e-commerce, because “we recognize that we don’t have all the answers.”
One secret to eBay’s success is that it has managed to automate trust, even with people you’ll never meet. Bidders can read feedback from other eBay buyers and sellers. You can even check what a user buys and sells on eBay.
The Trust Agenda was the subject of a fascinating panel at which I was privileged to be the lead intervenor. We learned the latest facts about spam, which law professor Michael Geist described as undermining our ability to trust e-mail. “You used to call people and say, ‘Did you get my e-mail?’” Geist noted. “Then we stopped making those follow-up calls. Now, we’re doing them again, because we can’t trust the e-mail system.”
Geist is on Industry Canada’s spam task force, which might or might not recommend new Canadian anti-spam laws. Frank Clegg, president of Microsoft Canada, said he doesn’t think government should step in too aggressively right now to address the spam problem.
“They should let industry try to sort it out,” he told the conference. “But we know if we don’t solve it in two or three years, government will step in.”
Clearly if people don’t trust their e-mail, it will undermine their confidence in other aspects of e-business.
A two-day conference is unlikely to change the world, but it certainly opened some very influential Canadian brains to the threats and opportunities lurking in the e-world.
Conference organizers have set targets, such as having Canada lead all G8 countries in access and availability of broadband networks as well as their speed, size functionality and intelligence.
With some very stiff competition coming from all over the world, that’s a tall order, but there was a lot of confidence in the room.
John Manley once used the term Northern Tiger to describe Canada’s future role in the e-economy. It’s time to see if that beast really has teeth.
Web Watch:
www.e-economy.ca
www.emarketer.com
(Tom Keenan is a professor at the University of Calgary and an expert on technology and its social implications. He can be reached at keenan@businessedge.ca)
