The impacts of the COVID-19 global pandemic and continuing government-imposed health restrictions are setting the stage for a 2020 holiday shopping season that will play out in a significantly different manner than those previous. Shopping malls may not be as crowded as they usually are this time of year, with their aisleways buzzing and bustling food courts crammed with excited shoppers. And, Main Streets in most urban centres across the country will likely experience a dip in foot traffic and activity as well. However, as most Canadian consumers state an intention to spend the same amount on their holiday shopping as they did last year, the way in which they make their purchases is expected to represent the greatest change to the immensely important upcoming retail shopping season.
According to the recently released 2020 Holiday Shopping Survey – a report conducted by the commercial real estate and property investment company, JLL – Canadian consumers plan to spend an average of $428 on gifts this year, an amount that is consistent with numbers reported in 2019. Given the current circumstances surrounding the pandemic and the negative effects it’s imposed on the retail industry, these early predictions concerning consumer spending are likely to ring nicely in the ears of merchants everywhere. And although these numbers may seem like a surprise to those expecting a decrease in spending, Tim Sanderson, Executive Vice President, Retail, Canada at JLL, explains some of the forces and variables that helped drive the survey results.
“COVID-19 has impacted everyone’s lives in a really profound way,” Sanderson states. “And that’s shown up significantly in recent spending as well. Canadians have spent less on travel and entertainment this year than they usually would and have been spending a lot of time at home with friends and family. As a result, overall spend will be down this holiday season, but consumers are showing a willingness to spend the same amount on gifts as they did last year, with some planning to spend over $1,000, which is well above the average.”
Shopping Early and Online
Among those planning to spend, Boomers reported the highest budget for gifts at $519 and Gen Z the lowest at $259. Despite the generation, however, more Canadians plan to start their holiday shopping earlier this year with one-third of respondents indicating an intention to begin making purchases during the upcoming Black Friday/Cyber Monday weekend, representing a five percent increase over last year. Considering the different complexion of the 2020 holiday shopping season, it could be suggested that even further importance will be lent to the performance of retailers during this year’s Black Friday sales and events.
Although Sanderson recognizes the significance of the Canadian consumer’s intention to start their shopping early, he points to the ways in which they plan to purchase their items as the most compelling revelation within the report. When asked how the impacts of COVID-19 might change their shopping behaviour, 37 percent of respondents said that they were planning to do more of their shopping online, with 32 percent stating that they would be visiting fewer stores this year. It’s a change in shopping patterns that Sanderson says will be significant this holiday season, a change that he describes as being “fast-forwarded” by the pandemic.
“Canadians have been very selective about the physical retail locations that they’ve visited over the past eight-plus months,” he says. “And this is a trend that we expect to continue through the holiday shopping season. The migration of consumers toward online shopping has been evident for some time, but it’s a trend that’s been accelerated by the impacts of COVID. It’s also a trend that’s being driven by the younger generations. They are technologically savvy by nature and show more of a willingness to shop online. It’s a change in shopping patterns that will bear significant influence on the success of many retailers this holiday season.”
Satisfying a Need for Convenience
Shoppers between the ages of 18 and 24 are leading the migration, with more than half of those responding to the survey expressing a preference to shop for their products online, compared to just 29 percent of respondents aged 55 or over stating the same preference. The continued increase in e-commerce adoption by consumers is being influenced by many factors, including a general shift in behaviour toward a more convenient and seamless shopping experience. It’s helping to draw a clear line between those who offer e-commerce capabilities and those who don’t, primarily benefitting larger online retail entities like Amazon.
However, the report also suggests that brick-and-mortar retail locations can also leverage the consumer’s desire for convenience through the offer of curbside pickup. The option, which was virtually non-existent last holiday season, seems to be a popular one with consumers this time around, with 18 percent reporting plans to take advantage of it wherever it’s made available by retailers. It’s just one of a variety of ways by which consumers are looking to save time and stay safe this holiday season. And, it’s also a way in which some retailers can capitalize on local traffic and engage with those within the communities they serve, an opportunity that Sanderson suggests might reap the biggest rewards for retailers that realize its potential.
“Local businesses are the fabric of the communities they serve. And I think that current circumstances can be favourable for many retailers to leverage or increase their presence within their communities and attract customers who are ready to embrace the mentality of shopping local. What we’ve seen throughout the COVID period is that people aren’t going on any European vacations or ski trips this winter. Instead, they’re spending their money on their homes and their families and loved ones. And I think it’s going to be reflected in spending that is closer to home, too, resulting in crucial support for the businesses that help our communities grow and succeed.”
