More than half of Canadian consumers say they will abandon a store or online checkout if they can’t pay using their preferred methods, according to the annual Canada Retail Report 2023 by Adyen, a leading retail end-to-end, all-in-one payments solution for merchants across the globe.
Here are some key findings:
- 85 per cent of Canadian consumers are spending more time searching online or browsing stores for the best bargains;
- 21 per cent of Canadian consumers experienced payment fraud over the past year, losing an average of $265 CAD each;
- 71 per cent of Canadian retailers plan to expand into new markets this year;
- 50 per cent of Canadian retailers agree their business is in a better position due to investments in customers experience; and
- 33 per cent of Canadian retailers plan to invest in technology to improve the shopping experience.
“Change is always accompanied by opportunity. As uncertainty becomes more palpable in the current economic climate, Canadian retailers’ ambitions are shifting to cutting costs and protecting their bottom line. They’ll need to invest in technology that will help them connect the dots and strengthen their business in the long run,” said Sander Meijers, Adyen’s country manager for Canada.
“In this report, we’ve collected insights into business strategies adopted by retailers across the globe and compared with Canada. Trends show that retailers are focused on optimizing loyalty programs, increasing efficiency, diversification, and looking for effective strategies to prevent fraud.
“The biggest takeaway? Connecting payments to other parts of the business will open up a realm of possibilities. And tech-first solutions will bring much- needed agility to big businesses by giving teams the time and resources to create better shopper experiences. What investments retailers make in technology today, will open up new opportunities tomorrow.”
Meijers said retailers have to unify their operations to be able to give consumers a better experience.
“Only one third of the Canadian retailers have actually done this but half of them are thinking about doing it or are starting to do it,” he added. “More than half are looking at it but only a quarter have done it correctly. It’s a huge opportunity for the Canadian retailers to start investing in if they want to be able to be successful in the long run because what anything taught us whether it’s inflation or the pandemic is you need to be able to offer a shopper a consumer experience that is very much unified online and in-store.”
In 2023, Canadian shoppers are taking their time and making more thoughtful purchases, said the report.
“With the cost of living rising and budgets tightening, people are searching for options that give them the most bang for their buck. This means smart shopping, budget-friendly prices and convenience are at the top of the list for the majority of Canadians,” it said.
“As the Canadian economy faces uncertainty and high inflation, 63 per cent of Canadian shoppers want to see more personalized discounting at retailers they shop with most. Retailers that provide attractive deals and personalized offers have the best chance of retaining customers and gaining new ones. However, half of Canadian retailers (48 per cent) say it’s harder to categorize customers by their needs because each wants a truly personalized experience.
“Since 40 per cent of Canadian consumers prefer retailers who remember their preferences to create a more tailored shopping experience, the retailers that can solve that knowledge gap will get a boost on the competition.”
The report said 33 per cent of Canadian retailers plan to invest in technology to improve the shopping experience.
“Unified commerce is the next frontier for Canadian retailers, where the demand for seamless and flexible omnichannel experiences is growing by the day,” said the report. “That’s reflected in the numbers. 63 per cent of consumers love the ease of purchasing an out-of-stock item in store and having it shipped to their home and 63 per cent are more loyal to retailers offering in-store web returns.
“Last year, Canadian retailers that connected their online and offline payments in one system saw a 14 per cent revenue boost. Retailers in Canada are paying attention. 47 per cent of retailers are starting to invest or are investing heavily in connecting online and in-person payments in one unified experience. 34 per cent are considering starting.
“Only 23 per cent of Canadian retailers are able to connect online transaction data with in-store transaction data. Coupled with the fact that currently 27 per cent of retailers are investing in payments data collection and analytics, there’s a lot of opportunity.”
Adyen said Canadian retailers are setting their sights on international markets, with many turning to ecommerce to break new ground.
“Our research found the US (58 per cent), UK (23 per cent), Australia (16 per cent), Mexico (15 per cent), and France (13 per cent) are the top destinations retailers are targeting,” explained the report. “Global ecommerce customers are primarily concerned with cost and convenience: the two defining factors that sway their purchasing decisions.”
When it comes to payments, 30 per cent of Canadian online shoppers said they would only buy products from abroad if the delivery charges were reasonable. 32 per cent would avoid it altogether if they had to incur customs charges in addition to the delivery fees, said the report.
“Canadian consumers are looking for flexibility when it comes to payment methods online. 22 per cent would only shop on websites in other countries if they can use their usual payment methods. Another 22 per cent would only do so if the retailers automatically converted prices to their local currency,” it said.
“This highlights the importance of offering a variety of payment options to meet the needs and preferences of Canadian consumers. By providing more payment flexibility, online retailers can keep up with evolving consumer demands and ultimately increase customer satisfaction and loyalty.”
Adyen also found that nearly one in three Canadian retailers say fraud and chargebacks are a significant cost to their business.
“As the retail industry continues to see accelerated digital transformation, shopping experiences are becoming more diversified and innovative. Unfortunately, this means fraudulent activity is becoming more sophisticated as well. Over the last year, 30 per cent of Canadian retailers experienced increased payment fraud attempts,” added the report.
“This is proving costly to both retailers and shoppers. 32 per cent of Canadian retailers suffered significant losses from fraudulent transactions and chargebacks. And one in five Canadian shoppers experienced payment fraud over the past year, losing an average of $265 CAD each.
As soaring prices force shoppers to reassess their spending habits, they now face the added threat of cybercrime, which lowers their confidence when making purchases. More than half of Canadian consumers (59 per cent) find online shopping less attractive because of fraudsters.
“Now Canadian shoppers are taking steps to minimize fraud risks themselves. More than a third (36 per cent) look at a website’s URL to ensure it doesn’t look suspicious before making a purchase, and 30 per cent don’t let their computer or mobile device remember their payment details, because they’re worried about fraud.”