2023 Black Friday shopping in Canada reflected the economic climate and was an indicator of what we could expect for the rest of the holiday shopping season, according to the 2023 Canadian Black Friday & Holiday Shopping Report by DIG360 and the Angus Reid Group.
Current economic factors and financial concerns for the future have been dampening consumer spending in the second half of 2023. This has been creating a focus on household budgets not seen in recent memory. Black Friday deals seem to be benefiting from this macro climate. Almost all (93 per cent surveyed) stated they were being more careful with expenses this season. Half (53 per cent) were shopping for items that provided best savings while 29 per cent sought best quality for a preset budget, all prioritizing buck over bang. There are also those who are not as impacted and are freely spending. There is not one consumer story,” said the report.
David Ian Gray, Founder and Strategist with DIG360, said the spike in Black Friday this year was significantly higher than any time in its tracking since 2010.
“And not just from those who reported they are watching their expenses more closely,”
He said it was fascinating to see the proportion of people buying at least one Black Friday deal outside Canada, mostly online and how the percentage of people who buy at least one Black Friday item is creeping up, but more notably the number of people only using stores has plummeted in this deal season.
“Black Friday deals focus intense shopping pressure and we have seen over time it tends to drive online activity out of proportion to the rest of the year. Yet, shoppers are continuing to report friction in the online experience, particularly timely delivery. The continued impact of Amazon and continued virtue-signaling in other social discussions and surveys that buying local is important, while we see the actual use of local independents remains relatively low.”
Gray said the bump in activity centered on the week of Black Friday and especially the weekend through Cyber Monday seems to align with its observations that many Black Friday advertisers seemed to delay their push on promotions until that time.
“We also observed abundant direct messaging of deals to subscribed customers through the month, suggesting a customer retention focus as opposed to acquiring new customers. This reflects retailers hunkering down in a down demand era,” he said.
“The fact is that more were buying despite a record dissatisfaction with Black Friday deals. On the one hand, this shows me a discipline across the sector to stay firm on margins. On the other, I suspect this shopper activity reflects a shifting of purchases, perhaps even from August and September, rather than an incremental surge in demand. This might leave the season active on promotional buying but still down from last year.”
Gray said how people act in holiday shopping is not the norm for everyone all year.
“That said, the striking number of people saying they are at least somewhat more focused on controlling household expenses might well be setting in as a habit. Since Black Friday deal hunting is often for buying items for oneself, might we see a bigger trough than usual in January?,” he said.“Jason Allsopp at Angus Reid Group added a question about paying for expedited shipping if delivery timeliness is a concern. The result shows how absolutely resistant shoppers are to shipping charges and by extension I would assume the same for restocking or return fees. The industry has its work cut out in 2024 to reframe consumer expectations around free options that are increasingly untenable for the retailers.
“Not all shoppers are cut from the same cloth. Some are relatively well off, also partaking in deal hunting. There is a sizable minority, typically higher income and/or not watching expenses more this season, who were very active deal hunting across many channels. There are those at lower incomes who were sitting it out altogether. Interestingly, 16 per cent are not planning on holiday gift giving.”
Here are the report’s key results:
Proportion of Canadians targeting Black Friday Deals jumped in 2023
“The proportion of adult Canadians buying at least one Black Friday deal reached 49 per cent, the highest since DIG360 tracking began in 2010. This does not mean all retailers did well. It does mean there were more Canadians than past years who tactically sought Black Friday deals or reacted to promos. We believe there was an influx of shoppers this past November who had avoided Black Friday hype in past years.”
Timing of purchases continues to flex
“Amidst the long-run shift away from buying on the day of Black Friday, the increased 2023 activity was centred on the last half of the month, with a strong final weekend and Cyber Monday (spiked to 30 per cent compared to 18 per cent in 2017). Unsurprisingly, shoppers told us they see Cyber Monday as basically the same as Black Friday. Almost half (43 per cent) felt they spend no more time deal hunting than in 2022.”
Shoppers were not seeing great deals
“While more Canadians were actively pursuing ”Black Friday” promotions this year, many retailers were dialing back their mass advertising of deals and the depth and breadth of offers. Another spike this year was the proportion who rated deals to be poor (at 61 per cent, compared with a stable mid-40 per cent from 2017 to 2021). Only four per cent this year rated the deals as great. A full 80 per cent cited seeing higher prices. Of note, 66 per cent are still reporting in-stock challenges and 63 are experiencing shipping charges for online orders.”
Stores are important but eroding for Black Friday. Amazon was a big winner
“Canadians are leveraging online shopping for Black Friday deals. Specifically, 90 per cent of deal buyers purchased at least one item online and 46 per cent only used the internet for their Black Friday buys. This has been consistent and gradual since 2017 (e.g., 82 per cent bought online in 2018). More notable is the drop in physical store deal buying. In 2018, 80 per cent of Canadian deal-buyers purchased at least once in-store, with 18 per cent only using stores; in 2023, 53 per cent made at least one store purchase and only nine per cent exclusively used that channel). Notably, 48 per cent of buyers bought at least one item from a website outside of Canada, which industry trade statistics fail to capture, and 57 per cent of buyers bought at least one item from Amazon.”
Local independent stores fight for share
“Good news for the local, independent store owners who are often challenged to stand out during this promotional period. At 41 per cent, more Canadians are browsing or buying local independent stores; in 2018, 32 per cent of Canadian Black Friday deal seekers were browsing or buying local stores and 35 per cent in 2021. However, only 19 per cent of buyers ultimately purchased from a local independent store. Main reasons for not buying were higher prices, lack of selection, and inconvenient locations.”
Black Friday is for ‘self-gifting’ but gift buying for others has started
“By the end of November, 55 per cent of all Canadians said they had begun Holiday gift buying and 29 per cent were waiting until December. Yet of Canadians hunting Black Friday deals, 37 per cent mostly or only sought items for themselves. This is somewhat down from past years, perhaps reflecting the more disciplined approach this year. Many retailers have missed this fact in their promotional Black Friday messaging. Historically Black Friday has cannibalized Boxing Day/Week buying, with the latter benefitting from the spike in redemption of gift cards. Interestingly, 16 per cent of Canadians are not planning to give gifts (we have not asked this previously).”
Outlook for Holiday purchases is muted, with some exceptions
“Only about five per cent of Canadians plan to spend more on gifts this year, which does not vary much by income nor those who are not watching expenses more than in 2022. A bigger difference-maker is age; 10 per cent of those 18-34, the traditional core shopping cohort, expect to spend more. BC (eight per cent) and Alberta (seven per cent) are slightly more optimistic than the rest of Canada. Just under half (46 per cent) of adult Canadians expect to maintain the same level of purchasing on Holiday gifts this year compared to 2022, and 41 per cent plan to spend less. The latter is skewed by those who are being more careful with overall expenses; 51 per cent from those who are watching their expenses more than in 2022 compared with just 13 per cent of those who are less concerned about expenses. Again, there is no one-size fits all definition of shoppers and this is about intention not prediction: those more impulsive may fail to follow their plans.”
Canadians are concerned about timely delivery of Holiday gifts in December yet are reluctant to pay more to expedite shipments
“Heading into December, over half of all Canadians (57 per cent) were concerned about on-time delivery of their ecommerce gift purchases – 21 per cent were ”very” concerned. Of those buying online Black Friday deals, 55 per cent reported experiencing shipping delays. While retailers do offer expedited shipping options for a fee, 80 per cent said they “rarely” or “never” use that option; 50 per cent said they would not use this option when specifically asked about Holiday gift orders. For those who would, the average expedited shipping charge they would consider is $10, which falls below the Priority Rate set by Amazon. Retailers with physical stores have an advantage in December, with certainty of an item in hand, more so if in-store pickup is faster than home delivery. Shopper expectations around timely and free shipping for online gifting are clashing with retailer needs to control margins. Retailers will have to reset shopper expectations in the online channel.”
Cross-border shopping down, resale a factor and lost/stolen shipments impacting
“Here were some other notable observations:
- About 1 in 10 (12 per cent) Canadians looked at Black Friday deals in stores in the United States in November. Half of those, or six per cent overall, purchased. In BC, 16 per cent looked and 10 per cent overall bought. This is down from past years, perhaps reflecting a pull back in travel or poor exchange rates;
- FB Marketplace and other resale sites were occasionally (26 per cent) or frequently (15 per cent) reviewed during Holiday shopping. We will continue to track this in future;
- 17 per cent of those who bought Black Friday deals frequently or occasionally experienced lost or stolen shipped items.”
DIG360 has been tracking the Canadian Black Friday experience and its impact on Holiday retailing since 2010. The Angus Reid Group has returned to collaborate on the survey. This study of 1,506 adult Canadians is unique in that it was conducted November 28-30, 2023 – after Cyber Monday. It is balanced and weighted to Canada’s general population on age, gender, and region. For comparison purposes only, samples of this size yield a margin of error of +/- 2.53 percentage points, 19 times out of 20.