Internet shopping business idea

Overview

In this interactive exercise, secondary students start by creating their own business idea. They are introduced to trends in Internet shopping using resources available on the Statistics Canada website. This includes an article entitled "Net Shopping" as well as the E-STAT data source and Summary tables. These resources help students learn about the types of Internet shoppers and businesses that sell over the Internet. By referring back to their own business idea, the article they have read, and data they have gathered, students will express and discuss some of the advantages and disadvantages to selling specific products and/or services over the Internet.

Contributors: David Bell, Faculty of Education, University of Western Ontario; Andrea Pepler, Sir Robert Borden High School, Ottawa Carleton District School Board; Ben Veenhof and Heidi Ertl, Science, Innovation and Electronic Information Division, Statistics Canada; Joel Yan, Adam Simac, Learning Resources Team, Statistics Canada.

Objectives

• To use written materials as well as statistical data sources to learn about the nature, size and recent trends in Internet shopping
• To identify and describe the Internet audience, including some of the characteristics of Internet shoppers
• To discuss key advantages and disadvantages of selling over the Internet while referring back to students' own business idea, products and services
• To use E-STAT's graphing capability to identify trends and support arguments
• To develop entrepreneurial and creative skills through the creation of a business idea
• To learn about e-commerce and relevant vocabulary

Suggested grade levels and subject areas

This lesson is recommended for students at the secondary school level in the following subject areas:

Business Studies (including Marketing and Entrepreneurial Studies) and Information Technology

Duration

Minimum of 2 periods
Some activities, such as the reading exercise in Student worksheet 2, could be completed as homework.

Vocabulary

Students encounter the following terms in the reading assignment in Student worksheet 2 and when preparing a graph using E-STAT in Student worksheet 3:

Household — a person or group of persons who co-reside in, or occupy, a dwelling
E-commerce households — households that placed orders for goods or services over the Internet (they may, or may not, have paid for these items directly online – e-payment)
Window shopper households — those who only window-shopped (viewed products and services online but did not purchase/order them)
Internet shopper households — households that engaged in either window shopping or e-commerce in the reference period (They represent the total sum of e-commerce and window-shopper households)
Industries — are groups of businesses that participate in a specific set of economic activities. Statistics Canada uses NAICS – the North American Industrial Classification System in order to define and describe different types of industries. The classification is broken into several levels of detail: Sector, subsector, industry group, and industry. It was developed by the statistical agencies of Canada, Mexico and the United States and published in 1997, with some revision in 2002.

In Student worksheet 3 of this exercise, students select the sub-sector in which their business idea belongs from a list of several sub-sectors in the NAICS database (e.g. if their business was a grocery store they would select "Food and Beverage Stores" from the list. Note that data are not always available at the industry-level detail). This allows them to produce a graph showing the number of businesses selling over the Internet in their particular sub-sector of the economy.

Example of how the NAICS structure works:

44 Retail Trade (sector)
445 Food and beverage stores (subsector)
4451 Grocery Stores (industry group)
44512 Convenience Stores (industry)

In most cases the table will provide students with sub-sector detail only, so students will select the sub-sector which most closely reflects the type of business they have chosen. Some students may be unsure of where their business fits so you may wish to assist them. Of course, businesses are sometimes involved in several activities, but are classified to only one main activity, according to their greatest source of revenue.

The Public sector consists of all provincial and federal-level government institutions (e.g. Canada Border and Services Agency, Agriculture & Agri-Food Canada) while the Private sector is all private (non-government) businesses (e.g. grocery stores, mining companies, gas stations).

Materials

• E-STAT: Have students access E-STAT on the Statistics Canada website; if computer access is limited, students may pair up or the teacher can distribute copies of the Internet shopping article and graphs (See instructions for finding the article and generating graphs in the Worksheets which follow).
• Student worksheet 1 (Developing Your Business Idea)
• Student worksheet 2 (Gathering Information about Internet Shoppers, using the article "Net Shopping" from Canadian Social Trends)
• Student worksheet 3 (Extract data using CANSIM Table 358-0014 in E-STAT)

Classroom instruction

1. Before beginning Student worksheet 1, introduce students to the idea of Internet shopping.

   To get students started, ask the following:

   1. How many of you have Internet connections at home?
   2. Have you ever gone to a company website to find out more about a product? Give examples.
   3. a) How many of you or your family members have shopped using the Internet?
      b) What types of products were purchased? Why did you choose to purchase them online?
      c) Was it a good experience or did you have any problems?

   You may wish to list some of the students' responses on the blackboard.

2. Give students worksheet 1 – "Using the Internet In Your Business". Instruct students that this is a chance for them to create their own business idea whereby they can sell products over the Internet. You could help students through worksheet 1 by giving them some examples:

   • Suppose you are interested in photography. You might want to run a business where you sell cameras, but also provide other services (e.g. film developing, special event photography, weddings etc.).
3. Introduce the idea of identifying a target market for the business idea, an important step in any business plan (In answering the four questions at the end of worksheet 1, students essentially identify their target market). Explain that as a business owner, you will want to have some idea of the types of people who will buy your products, so that you can market them and sell to them in the right places. To do so, you need to think about whether your products cater to people of certain ages, family types, and incomes.
4. Once the first Student worksheet is completed, introduce Student worksheet 2 – "Who Shops on the Net?". Tell students that they will read an article about Internet shopping that comes from the Statistics Canada website. Give students a quick overview of Statistics Canada and why surveys are used to gather information. (For background information, consult "About Statistics Canada") Tell them that the article they are about to read is based on results from the Household Internet Use Survey. The survey has been conducted each year since 1997, in order to improve Canadians' understanding of how and why the Internet is used. This article, in particular, focuses on Internet shopping.
5. In order to help your students obtain the article, guide them through E-STAT using the steps appearing in Student worksheet 2 ("To obtain the article on your screen"). This will take them to the "Net Shopping" article that they are asked to read to start the exercise. This reading activity can be done as an in-class assignment or as homework. (If this is to be done at home, the students will need the E-STAT username and password for your school. Check with your school's computer administrator contact to obtain this) Alternatively, you may print the article and distribute copies to students.
6. After students have completed the reading activity, they are to complete the questions which follow.
7. Once the first two worksheets have been completed, introduce Student worksheet 3 – "Should I Sell My Products Online?". Mention that for this final exercise students will access tables on the Statistics Canada website to study trends in the proportion of businesses selling and purchasing goods and services over the Internet. They will be able to identify the percentage of businesses that buy and sell over the Internet in their particular industry (or type of business) and compare their results with the rest of the private sector. Mention that these data come from a different Statistics Canada survey – The Survey of Electronic Commerce and Technology. This is another annual survey that asks questions about sales over the Internet, except that this survey is sent to businesses instead of people. Students will also use E-STAT to create a table showing them some of the barriers to e-commerce that were identified by businesses in the survey. Students will then be able to compare their own list of potential disadvantages to doing business online (asked in Question 4 of this worksheet) with those perceived by other businesses.
8. Tell students that the Survey of Electronic Commerce and Technology identifies the industry group to which each business belongs (e.g. a grocery store would belong to the "Food and Beverage stores" according to a classification standard that is used called the "North American Industrial Classification System"). By producing a graph showing the sales conducted over the Internet for the private sector (total) and their particular industry group or subsector, students will gain a better appreciation of the extent to which businesses in their industry are involved in online purchases.
9. Note that some students may have difficulty determining the industry grouping in which their business belongs. You may wish to familiarize yourself with the NAICS industry list under the heading "North American Industrial Classification System" prior to introducing this exercise (See also the definition of industries appearing in the vocabulary section earlier in this lesson plan).
10. Depending on available classroom resources, you may ask students to print the graph or to simply view it on screen. Allow students time to complete the questions at the end of this worksheet.
11. At the end of this exercise, discuss the results with the class:
    • Ask students about the types of businesses they ran and whether many businesses in their industry tend to sell their products over the Internet.
    • Ask the students to account for the number of businesses selling online based on what they know are some of the advantages and disadvantages of selling online.
    • Also introduce other reasons why some businesses may not sell online (e.g. cost of e-business software, concern for security issues, reluctance to change current business practices such as face-to-face interaction with suppliers, pre-existing procurement arrangements or contracts, and the fact that certain goods do not lend themselves to Internet transactions).

Evaluation

Review the completed worksheets to evaluate students for:

• Effort and creativity in developing a business idea in Student worksheet 1
• Ability to gather and understand information from the "Net Shopping" article and relate it to the questions in Student worksheet 2
• Ability to interpret data from the Summary Tables in Canadian Statistics and E-STAT graph in Student worksheet 3
• Ability to synthesize the information gained throughout the exercises in order to explain some of the advantages and disadvantages to purchasing a particular product or service online in Student worksheet 3

Enrichment

To further develop students' creative and entrepreneurial skills, optional activities that could be added to this exercise include the following:

• A paper draft of the students' own business webpage:
  Produce a rough sketch ("mock-up") showing what your business homepage would look like;
• How would you plan to make your site interesting for Internet shoppers? List some of the things you think Internet shoppers look for in a good site.

A further activity that helps build students' interpretive skills and educates them about industries that are most active in e-commerce is to have them read the most recent Survey of Electronic Commerce and Technology release in Statistics Canada's publication The Daily. Search the The Daily online for "Electronic Commerce and Technology" (include the quotation marks)

After reading the article, discuss with the students:

• The share of e-commerce sales relative to total economic activity (i.e. relative to total operating revenue) – how "big" is e-commerce?
• Which types of industries were generally most active in e-commerce generally?
• At Statistics Canada, how is e-commerce measured?
• Compare the value of business-to-consumer sales (B2C) versus business-to-business transactions (B2B). Which type of transaction dominates? Can students predict which sectors of the economy might depend most on B2C sales?
• Why might a business be interested in selling to other businesses over the Internet? Try to list some of the factors that might attract a business to become involved in online sales.

Please e-mail comments or examples of how you used this exercise in your class.

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