The rising cost of goods and services are having their impact on Canadian consumers in how and what they buy these days.
A new survey by PwC found that 47 per cent are either very or extremely concerned about their personal finances; 70 per cent are cutting back on non-essential purchases in response; 73 per cent visit physical stores at least monthly, with 23 per cent of consumers saying they frequently stand in long lineups and notice stores feel busier; and 42 per cent of Canadian consumers shop on their phones at least monthly.
“With consumers’ evolving expectations and a desire for an enhanced omni-channel experience, Canadian retailers have an opportunity to build new avenues for meeting consumers needs and differentiating their brand by creating frictionless and memorable experiences,” said Myles Gooding, National Consumer Markets Leader and Global Consumer Markets Advisory Leader, PwC Canada. “It is imperative for retailers to transform and capture a share of in-person and digital experiences. In order to be successful, retailers must reimagine how consumers use technology across multiple channels and effectively interact with their brand.
“There’s a lot of concern but people are finding ways to navigate around some of these inflationary pressures. Generally what it means is that discretionary spending is probably going to have some pullback. The necessities will still be in line. Groceries will continue to be bought. Health and beauty will continue to be bought.
“I think what remains to be seen is how much discretionary spend will be done in areas of travel and entertainment and maybe some clothing. Outside of that, retailers still have a great opportunity to capitalize on the new foot traffic that’s coming back, knowing that the pandemic is in our rear-view mirror a bit. Everybody is definitely coming out. The foot traffic has definitely increased. So it does create a unique opportunity for retailers to really create the right experience for the customer. There’s concern but we don’t know how much of that is going to turn into reality.”
Gooding said people are social animals. They want to be out next to each other. Consumers want the experience around the socialization of shopping. Feel the fabric of the clothing. Squeeze the avocado.
But we’re also seeing a growth in the number of consumers using mobile technology. It’s a convergence point.
“It’s a convergence point we’re seeing in the industry where you may be in a store where you’re looking for something and maybe a sales associate is helping you with something, you have something in mind, they actually pull up something on their iPad, even though they might not have it there, they can ship it to your house,” said Gooding.
“What we’re seeing is that there is a merging of digital and physical so that while you’re even in the store you’re going to be looking at what that retailer offers from a digital perspective as well. Some retailers are starting to interact digitally with their customers as well.”
Some of the other findings of the PwC report include:
- Canadian consumers say self-service technologies and helpful staff can further enhance their retail experiences. With these human-led and tech-powered channels adopted, it effectively provides more time for staff to focus on higher-value activities that enhance the in-store experience;
- More than half of the respondents (52 per cent) say knowledgeable and helpful sales associates are an appealing part of in-store shopping;
- Self-service checkouts in particular stand out to Canadian consumers. Nearly half (48 per cent) say they’re an attractive feature of in-store shopping. Further proving that Canadian consumers have high standards, expecting fast and efficient service, and prioritize meaningful and trustworthy interactions;
- One in five Canadian consumers say they expect to increase their spending over the next six months with retailers that provide an efficient delivery service. Supply chain issues can unfortunately threaten established relationships between brands and their customers. These supply chain challenges, albeit improved from last year, are an opportunity for companies to mitigate and create efficiencies with their supplier and distribution networks;
- In PwC’s recent CEO Survey, 49 per cent of Canadian consumer markets CEOs told us they plan to adjust their company’s supply chains in 2023;
- Businesses that successfully implement data, analytics and automation capabilities into their supply and distribution can improve their delivery efficiencies and have an opportunity to grow their market share;
- One channel to watch closely is the metaverse. Immersive virtual worlds accessible through different platforms that let users socialize, work, play games and buy digital and tangible objects. Globally, it’s still in the early stages of adoption, with only 26 per cent of consumers using the metaverse. That figure is even lower in Canada, at 12 per cent.
“While we see consumer sentiment concerned, we still need to see the reality. Our consumer CEOs are still actually pretty optimistic about the future and believe if they’re providing the right experience for the customers, they’ll be able to trail through this year and really build on that,” said Gooding.