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Canadian Consumers Embracing Physical Retail Stores Amid Online Channel Growth: Study

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It’s no surprise that retail is in the midst of a revolution.

But the story of retail transformation can’t be boiled down to stores versus ecommerce, says the third edition of the Connected Shoppers Report by Salesforce Research.

To win sales — let alone loyalty — retailers, brands, and online marketplaces must understand and navigate an increasingly complex ecosystem of consumer expectations, preferences, and channels that are anything but static, explains the report.

Key Canadian highlights from the report include:

●     Retailers, brands, and online marketplaces are battling for wallet share. 81 per cent of consumers buy from a combination of retailers, brands and online marketplaces. 40 per cent of repeat purchases are made at physical stores;

●     Shopping is evolving as consumers define new terms of engagement. 49 per cent of consumers shop with a specific brand in mind. The number one trait of a shoppers’ favourite brand is offering exclusive shopping experiences/promotions;

●     Shopper journeys are moving to the edge. 17 per cent of shoppers buy products with a mobile wallet. On average, consumers have two shopping apps on their mobile devices; and

●     Stores remain critical for discovery, experience and fulfillment.  52 per cent of shoppers have purchased a product online for in-store pickup. The number one reason consumers shop in-store is to get merchandise immediately, followed by the ability to touch and feel merchandise.

The report also found that 47 per cent of shoppers plan to buy more from online marketplaces this holiday season and the number one factor influencing holiday purchases this season is what’s available in physical stores.

“We’re finding that consumers are engaging with brands well beyond their physical and virtual four walls. What that means for retailers is that’s just not about getting the operations and experience right on their own destinations but really pushing their brands to where consumers are,” said Rob Garf, Vice President of Strategy and Insights for retail and consumer goods at Salesforce.

“The second interesting point I want to highlight is that the stores are seeing a revitalization. We’re seeing consumers really valuing the stores not in isolation but as part of the overall omnichannel shopping process. While products are important, experience really has elevated as one of the most important reasons why a consumer shops with a particular brand and as part of that experience sustainability and trust has become very important particularly with the younger generations.”

LUSH
PHOTO: LUSH

Garf said that retail from the beginning has been about pulling the consumer to their brand, their destination, their property. That of course was primarily physical for many years but increasingly digital has entered into the picture.

“Now it’s as much the need for retailers to push the brand to wherever the consumers are and that’s increasingly happening off property. It’s happening on third-party platforms like social media, like messaging platforms, like voice assistance, gaming consoles, even video,” he said. “What we found in the Canadian market specifically nine per cent of consumers are making purchases on social media and four per cent are making purchases on messaging apps as well. This is slightly lower than the global average which to me isn’t a huge surprise. We have found that Canadian shoppers are typically fast followers to what’s happening in other parts of the world in adoption of technology for shopping.”

ROOTS
PHOTO: ROOTS

There is a lot of talk these days of a retail apocalypse but Garf said it’s really more of a retail renaissance and that’s illustrated by what’s happening in the store itself. For many years, the store was simply a place to purchase a product. The point of sale was focused on speed and efficiency.

“What we found based on our research is that consumers are really looking for three fundamental things from the store,” said Garf. “First they’re looking for it to be discovery hub. The second an experiential hub and third being a fulfillment hub.

PHOTO: L’OCCITANE

“It’s critical too that in Canada 84 per cent of consumers make their first purchase in a physical store and when we think about the repeat purchase – the second, third, fourth, the ongoing purchases – 40 per cent still make those purchases in the physical store. Only 25 per cent of the repeat purchases globally is made in the physical store. So Canadian consumers are really doubling down on the importance of that physical, tactile experience within the store.”

Garf said 52 per cent of shoppers purchased a product online and picked it up in the store.

So why do consumers in Canada go into the store?

“The top three things are to get merchandise immediately. It speaks to the importance inventory availability and really streamlining the purchase and pickup activity. Being able to touch and feel the merchandise is really important particularly on fashion products and technical products that you can’t just get by reading the website. And lastly is to engage in the overall in-store experience and that can take a lot of different flavours whether that’s just talking to a knowledgeable store associate, it could mean in some cases . . . going to a store for a special event . . .”

PHOTO: SONOS EXPERIENTIAL STORE

Garf said experience for the consumer is a feeling that the retailer knows who the consumer is and provides either a relevant, personalized, convenient or automated shopping experience based on the knowledge of that consumer.

“Over 50 per cent of consumers feel like the retailers don’t know actually who they are. So it’s turning that on its head utilizing all the information that a consumer is leaving with every type, every swipe, every tap and turning that back over to the consumer and translating that into whether it’s a personalized, relevant, convenient or automated shopping experience,” he said.

On a global level, the Salesforce report found that 83 per cent of consumers say the experience is as important as the product.

Article Author

Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior National Business Journalist with Retail Insider in addition to working on his own as a freelance writer and consultant in communications and media relations/training.

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