Throughout the pandemic, most Canadians shifted their focus to spending on necessities versus vacations and luxurious shopping – all the while, saving billions of dollars.
Now retail experts are expecting much of that cash to start flooding back into the retail economy.
“The back to school numbers are in and they were unbelievable. People have this feeling that they’ve missed out on two years of their lives and they’re sitting there and they’re thinking I didn’t spend any money, I didn’t travel anywhere, and let’s treat ourselves. Let’s spend the money on things maybe we wouldn’t have before because we were spending it on other things,” she said.
“There’s this sense of loss but there’s also this euphoric sense that you’re getting when you go to the store and you bring something back with you. I think the Christmas season is going to be absolutely brilliant for retailers. We’re seeing footfall traffic for example in the Lansdowne Shopping Centre in Richmond, BC, a 20 per cent growth over 2019 numbers even pre-pandemic because we’re seeing that people need to get out there, they need to be social and they need to spend some money and just feel human.”
During the initial stages of the pandemic, people spent money on their homes but they didn’t spend it on themselves, she added.
“We’ve all been sitting in this virtual world and feeling like it’s my turn now. Let me go get my nails done. Let me go out for a bite to eat with some friends. And really enjoy the aspect of being out,” said Cantkier.
“As we stand on the eve of a revenge spending phenomenon in Canada, it’s also important to recognize that we’ll be stepping back into a retail world that looks, feels and functions differently than the pre-pandemic shopping culture — and that’s a good thing, for the most part.
“We’re still social creatures at the end of the day. There are things that you just cannot do online. The things that people are doing online is where you’re seeing that shift in technology and experience. Retailers have responded.”
She said research indicates online retail will account for 13.4 per cent of all retail this year, up from 6.9 per cent in 2019, according to data from eMarketer. She said Canada’s total retail sector will surge this year, growing by 6.4 per cent after falling back by nearly five per cent during the 2020 pandemic year, according to the Canada E-commerce Forecast.
She said the decline in store traffic will start to reverse by the fall and retailers will need to adjust and strengthen their offerings as shoppers start coming back in large numbers.The number of retail tenants offering an e-commerce platform doubled during the pandemic, yet 77 per cent of tenants still say profitability is highest when customers shop in-person, according to Colliers’ new Retail Recovery report.
“I think even before the pandemic the customer journey was important,” said Cantkier. “What’s leading us back to bricks and mortar and where we’re seeing all of those online retailers looking at bricks and mortar is because the customer journey is so cyclical. It may start online and it used to end there. That customer journey has to be fulsome. It can’t have that sort of stop and start. It has to come full circle now.
“The customer journey has changed. It’s no longer simply about visiting a store; it now involves an overall brand experience through the omnichannel platform. Having done their research online, customers arrive at the store already knowing exactly what they want – in many cases, knowing more about a product’s features and benefits than the sales associate. The role of the in-store sales associate must be elevated to someone fully versed in the product they are selling, who can understand and find a solution for the customer’s needs.”
She said retailing has less to do with the product but with the experience in getting that product. Brands are now also responding to what’s important to the customer – sustainability, the local nature of products, responding to causes. The trend is retailers responding to what’s important to consumers.
“During the pandemic, retailers had to extend themselves and find innovative ways to support the customer journey. For a time, that journey went online, but as revenge spending takes off, customers will increasingly be turning their attention to items that require interaction, feeling, touching and trying on,” said Cantkier.
“Additionally, high-tech shopping will help set the winners apart in the retail business. New augmented reality such as virtual, or smart, mirrors and artificial intelligence such as personalized item suggestions and tailored sale notifications should emerge as priorities for retailers. We can expect to see more appointment-driven shopping, personal shopping services and specialized one-on-one interactions.These shifts will be born out of our need for safety while also emerging as a byproduct of buying more expensive products that require an elevated experience.”
Cantkier said grocery store anchored centres and high service fashion are poised to thrive.
“Grocery store anchored centres are the catalyst for all the other services and all the other shopping that you’re doing. It’s not going to go away. We need food, drugs and alcohol. Those centres do really well because there are the complementary services and tenants,” she said. “The grocery is really the anchor for it and they really did thrive.
“What we’ve seen with fashion is fashion has become a very challenging category to be in right now. People are focused either on getting something that’s really remarkable, really high end, really great quality. And they’re going to thrive. They’re absolutely here to stay and we’re seeing that in shopping habits and in the sales per square foot numbers that we’re looking at.”