Canadian Consumer Insights June 2021 pulse survey
Canadian consumers are more pessimistic than the global average in their expectations for spending in the next six months, but they do express optimism about post-pandemic activities.
Loyalty programs and quality of products are both important differentiators for the majority of Canadian respondents, and perhaps surprisingly, in-store remains their preferred shopping channel.
While the pandemic has reinforced for many a sense of the importance of protecting local and sustainable businesses, Canadian consumers are lagging behind global consumers in every sustainability behaviour we measured.
It’s come to the point where many of us are becoming used to uncertainty. With updates about vaccination levels and subsequent waves of COVID-19 coming almost daily, we still don’t know how post-pandemic life will look—or when we’ll get there.
What we do know is that consumers have changed.
Many of us adopted new shopping behaviours at the start of the pandemic, and those behaviours have now become ingrained. Half of Canadian consumers (50%) continue to make less frequent but bigger basket shops, and 42% are shopping more with discount retailers. These numbers have barely changed from six months ago (52% and 42%, respectively).
But it’s not a time for retailers to become complacent. How many of these changes will persist? And to what extent will current consumer sentiment translate into future shopping behaviours and spending?
We recently released our Canadian Consumer Insights April 2021 pulse survey, in which we explored the consumer trends we expect to see in the coming years. In the June 2021 pulse survey, we focus on how Canadian consumers are feeling right now and what that will mean for retailers as we close out 2021.
of Canadian consumers continue to make less frequent but bigger basket shops
Our survey results show Canadian consumers are notably more pessimistic than their global peers in their expectations for spending in the next six months. Canadian respondents are significantly less likely than average, in many categories, to expect increases in spending. While it’s difficult to identify a definitive cause for this, the pattern is illuminating.
Only 26% of Canadian respondents say they’ve become more optimistic about the economy over the last six months, compared to 36% globally.
This is balanced by optimism about activities and spending post-pandemic. For example, while 53% of Canadian respondents expect to eat/drink in restaurants and bars in the next six months, that number jumps to 63% when looking post-pandemic. We see similar significant differences when we look at the likelihood to travel domestically in the next six months versus post-pandemic (22% vs. 51%) and attend mass social events (21% vs. 40%).
The appetite for these types of activities and spending is there—at least in the long term. The challenge for retailers will be to understand and work with Canadians slow to dip their toes in the water until we’re “back to normal.”
Canadian consumer markets CEOs are in step with Canadian consumers, expressing a similar sense of short-term caution and long-term optimism.
In our recent 24th CEO Survey—Canadian insights, we found that only 21% of Canadian consumer markets CEOs are very confident about their organization’s prospects for revenue growth in the coming year, compared to 36% of Canadian CEOs overall. But when we look at expectations for three years from now, the gap closes: 49% of Canadian consumer markets CEOs are very confident their organization’s revenues will grow in that time, compared to 53% of Canadian CEOs.
What do Canadian retailers need to do right now to position themselves for this anticipated future growth—and entice the cautious consumer?
For Canadian consumers, reliability and loyalty programs are the top two characteristics that drive brand loyalty, with 60% and 52% of respondents, respectively, including those characteristics in their top five. While reliability also tops the list globally, beyond that there’s nothing a majority of global consumers want. For retailers selling goods to Canadians, loyalty programs are a clear area of opportunity.
When asked which attributes they’d be willing to pay more for, product quality is the most consistent response for Canadian respondents across the categories. Canadian consumers are especially likely to be willing to pay more for groceries: 55% for healthier options and 50% for locally produced/sourced products.
In-store remains the most popular shopping channel for both Canadian and global shoppers, with 69% of respondents in Canada and 71% globally buying in-store at least once a month. While 56% shop online through a personal computer (PC) at least monthly, they lag significantly behind their global peers when we measure the use of other online outputs, such as mobiles (49% vs. 64%) and tablets (28% vs. 39%).
of Canadian respondents rank customer service as a top-five characteristic that drives brand loyalty (compared to 36% globally)
Perhaps counterintuitively, the most cited reasons by Canadian respondents for in-store and online shopping are the same: price and convenience. Health and safety considerations are no longer as prominent a driver of online shopping as they were six months ago, though this might be because Canadian consumers now trust physical stores have these measures in place.
So what should retailers do to give Canadian consumers the quality—and the price points—they’re looking for?
We’ve all felt the impact of closed borders and disrupted supply chains since the pandemic began. This has reinforced for many a sense of nationalism and an understanding of the value of protecting and nurturing sustainable and local business and production.
But when we dig into the results of our survey, we see Canadian respondents are lagging behind global consumers in every sustainability behaviour we asked them about.
It seems that for many Canadian consumers, it comes back to price: 48% of respondents feel sustainable products are priced too high.
But it could also be about the accessibility of sustainable and local products. In our survey results, we identified a possible discrepancy between Canadian respondents’ sentiments about supporting local and their actions. While the number of Canadian respondents who say they’ve been buying more from local independent retailers is up from six months ago (48% vs. 41%), 42% of Canadian respondents also say they’ve been shopping more with large retailers—and this could be a contradiction.
Canadian consumers might be shopping for fresh products at independent retailers and essentials at large retailers. But consumers might also feel constrained by the difficulty of supporting local retailers amid widespread in-store closures and limited local online offerings and capabilities.
of Ontario shoppers are most likely to say they buy products in eco-friendly packaging
of Quebec shoppers are most likely to say they consciously buy from companies that protect the environment
of Gen Z shoppers say they’ve been shopping more for second-hand items (vs. 16% of Baby Boomers)
of Gen Z shoppers say they’ve been shopping more with discount retailers (vs. 25% of Baby Boomers)
Consumers have been saying for years that they value sustainability. While we may be lagging behind here in Canada, the new global business currency is values. Organizations will need to keep up with changing customer expectations, especially among younger demographics, to avoid falling behind in a post-pandemic world.
What strategies should retailers focused on their environmental and social impact use to better engage possibly reluctant Canadian consumers?
Retailers will have an exciting opportunity to redefine the customer experience as we move into a post-pandemic world.
We continue to live in flux, so all strategies for the future must be informed by an understanding of current Canadian consumer sentiment—it’s the best view we have into how the future of retail may look.