TORONTO, ON–Are Canadians’ holiday spending plans going to be naughty, or nice i.e. spending less or more? And will they flock to the stores or let their fingers do the shopping, online?
COVID-19 may unfortunately have moved Canadians to the latter with arguably country’s largest retail market: Toronto and the adjacent Peel region now in a 28-day lockdown, which started Nov.23.
But online deals are also a likely major factor. With Cyber Monday approaching, more than three-quarters of Canadians indicated increased deals and sales are what is most likely to drive them to make online purchases, according to PayBright’s first annual Holiday Trends Report.
Other key insights from the report include:
1.Canadians will spend less, and save more, during holiday 2020. 47 percent of respondents anticipate a decrease in their holiday budget compared to previous years due to overall financial concerns, and a desire to save dollars and cull down debt. 60 percent of those collecting CERB said changes/reductions to the program are likely to impact their holiday spending, particularly among 25-to 34-year-olds (70 percent).
2. In a slightly optimistic trend for retailers, 1 in 3 Canadians (31 percent) actually plan to spend more this holiday season. While they have not been actively saving for it, they have been spending less during COVID-19 overall. The survey indicated specific categories where Canadians anticipate spending more, even minimally: basics, hobbies and the home.
3.Despite concerns about COVID-19, in-store shopping still matters. 47 percent of respondents plan to do their shopping in-store for big-ticket items like electronics and furniture at a brick-and-mortar location. Only 10 percent of those surveyed planned to shop purely online and, overall, 45 percent will mix in-store and online shopping this holiday season, so retailers need to ensure they make in-store shopping safe and appealing to Canadians during these difficult times.
When asked what matters to them most for in-store shopping, Canadians indicated they were looking for hand sanitizing stations (73 percent), fully stocked shelves (64 percent) and contactless payment (60 percent). Millennials and Gen Z shoppers are particularly hungry for diverse payment options, with 63 percent of 25-to 34-year-olds and 60 percent of 18-to 24-year-olds indicating it is an important purchase driver.
But eCommerce retailers have to get it right. According to Accenture’s 2020 Holiday Shopping Report 71 percent of respondents said they plan to shop online, but two-thirds still plan to visit stores.
(Ed. Note: both surveys were taken prior to the Toronto/Peel Region lockdown going into effect).
Top customer frustrations include high shipping costs (62 percent) and delivery delays (52 percent). Two in five (40 percent) shoppers expect fast and free shipping, and nearly two-thirds (63 percent) said an unsatisfactory delivery experience would discourage them from shopping with a retailer again.
Accenture reports that Canadians expect to spend just $516 versus $721 last year, as their budgets have reduced by about 30 per cent. The good news for retailers, however, is that couples with kids expect to spend $701, on average.
“Many retailers rushed to set up new or better eCommerce platforms in March at the start of the pandemic, and they’ve had time to iron out kinks,” said Robin Sahota, a managing director at Accenture who leads its retail industry in Canada. “The holidays will be a true test of their ability to provide a secure and seamless shopping experience that is memorable for the right reasons. Retailers who intend to lead now and in the future should scale eCommerce to cater to consumers’ digital experiences and must be prepared to communicate transparently about the state of inventory while addressing rising delivery costs to avoid negative experiences that could hurt long-term loyalty.”