Canadian Consumer Insights June 2022 pulse survey
The growth in online shopping is plateauing as consumers complement their desktop and mobile purchases with in-store and other channel experiences.
Consumers are visiting multiple retailers to meet their needs as they encounter rising grocery prices, out-of-stock products and reduced selection.
Many Canadians say they’ll pay a premium for local or domestic products to support the local economy.
For more than two years, many Canadians were forced—or were simply more comfortable—to shop and spend their leisure time close to home. We’re now seeing many of these pandemic habits outlasting the public health restrictions that originally ushered them in, further dashing any expectations that shopping and spending would return to pre-2020 patterns.
At the same time, new consumer behaviours are emerging. As we see in the findings below, Canadians are adapting to supply chain delays, seeking out socially responsible retailers and using their purchasing power to support the local economy. These and other shifts are creating new opportunities for retailers to engage and build trust with consumers. But Canadians have a clear message for retailers: earning their trust takes transparency, data privacy safeguards and positive social impact.
We’ve taken the pulse of consumers regularly since the start of the pandemic, including in-depth looks at Canadians’ shopping habits and sentiments in 2021. Here, we explore how shopping preferences and spending intentions are evolving this year, based on our latest pulse survey conducted in March 2022.
Where do consumers expect to increase their spending over the next six months?
Canadian consumers expect the at-home lifestyle they adopted during the pandemic will persist even as workplaces, restaurants and stores fully reopen and relax health measures. For example, more than half (56%) of our respondents told us they cooked more at home as a result of the pandemic. Very few say that will change soon—just 6% predict they’ll do less cooking at home in the coming months. Likewise, more than a third (34%) of survey respondents say the pandemic prompted them to shop more at local retailers. Only 4% anticipate that will imminently drop.
Similarly, consumers grew accustomed to e-commerce during the pandemic and want to continue shopping online. But we’re seeing these online shopping intentions stabilize after rising over the last two years. The number of consumers shopping online at least monthly on a personal computer dipped slightly over the past year, from 56% in our April 2021 survey to 51% this year. Meanwhile, the proportion of consumers who regularly shop online via their phone was flat year over year at 49%. At the same time, the number of consumers shopping in a physical store at least monthly modestly increased from 69% to 72%.
of Canadians say they’ve shopped in a physical store at least monthly over the past year—up from 69% in 2021.
Consumers will still shop online. But they’re also going to shop in physical stores. Engaging customers requires integrating their in-store and online experiences so they can move fluidly between them.
Different retailers will have different approaches. It may be letting consumers easily order a product for home delivery that they’ve just tried on in-store. Other retailers may send consumers entering their store a personalized invitation to meet with a retail associate to explore the specific products they’ve researched online. When thinking about your omnichannel strategy, ask yourself: How can I simultaneously engage consumers across their physical, digital and virtual worlds?
Canadians are divided in how their spending on leisure activities will change in the coming months. A large number of consumers expect to spend more on various entertainment and recreational experiences. But we also see a sizable number of Canadians with the opposite outlook, anticipating they’ll reduce spending on leisure activities.
A familiar list of indulgences tops the areas in which Canadians say they’re most likely to increase spending. More than a third (36%) say they’ll spend more on dining out at restaurants and bars. A similar proportion (32%) say they’ll increase their expenditures on travel. And 28% plan to spend more on takeout food. But businesses in these sectors face a divided customer base. These activities were also most commonly identified by some respondents as areas where they plan to reduce spending. Nearly three in ten (28%) say they’ll decrease spending on travel, while 26% say they’ll spend less at restaurants and bars.
At the same time, Canadians are devoting a share of their leisure time—and budgets—to new and emerging experiences. Nearly one in five (17%) say they’ll increase their spending on virtual online activities, classes and events. A key enabling technology we’re watching closely is the latest generation of virtual reality technologies. Currently, usage of virtual reality in Canada is lagging behind other countries. Nearly a quarter (24%) of Canadians have used virtual reality in the last six months, compared to 32% of consumers globally. In this country, consumers most commonly use virtual reality to play video games or watch a movie or TV show (10%), join a virtual world and, for example, explore a retail environment (8%) or browse products before making a purchase (6%). This suggests virtual reality is gaining a foothold among consumers, but its use for entertainment, experiences and purchasing remains in the early stages of adoption.
We see signs of Canadians’ pent-up demand and willingness to spend on travel and other experiences increasing. But not all consumers are ready to board a plane, dine in restaurants or sit in a stadium quite yet. As the recovery continues, many Canadians—like their peers around the world—currently appear to be favouring domestic and close-to-home experiences over trips abroad.
With Canadians continuing to spend much of their leisure time at home, virtual worlds and experiences are opening up new opportunities for retailers to engage consumers. While many brands are already active in the metaverse, not all retailers will benefit from making an immediate investment. What’s more important at this nascent stage is understanding these enabling technologies and thinking strategically about how to position your brand in the metaverse.
Raw material shortages, transportation delays and inflation affect all steps in the supply chain. But these challenges are most visible on retailers’ shelves and online stores—and consumers are taking notice. Nearly seven in ten (69%) consumers say they’ve frequently or nearly always encountered rising grocery prices during their in-store shopping. And many consumers also say they’re frequently unable to buy a product because it’s out of stock (31% of respondents) or experience deliveries taking longer than promised (27%).
When asked how they’re responding to the unavailability of their preferred products and other similar challenges, nearly three-quarters (73%) of consumers say they shop at multiple different retailers at least occasionally to meet their needs. While that’s on par with other consumers around the world, Canadians are also more likely to take a passive approach. This includes waiting for products to be restocked (cited by 70% of Canadians, versus 63% of survey respondents globally) or simply going without an item (also cited by 70% of Canadians and 63% of global respondents).
When facing a lack of product availability or similar challenges, male and female consumers are roughly equally likely to shop at multiple different retailers to meet their needs at least occasionally. But female shoppers are more likely to take a more passive approach to navigating supply chain issues.
…will go without a product they regularly use due to supply chain issues
…will wait for the product to be restocked
It’s important for retailers to be transparent with consumers about the current supply chain issues facing virtually all companies, including producer shortages that are contributing to rising prices. While some customers may be content to wait out these challenges, brand loyalty can be easily eroded as consumers are forced to visit multiple retailers.
Brands can build trust with consumers by suggesting alternatives to out-of-stock items and setting realistic expectations around delivery times. Consumers want to be kept informed. We’re seeing companies meet their customers’ rising expectations through technology investments that provide full order and delivery visibility, including real-time updates on when a package leaves a warehouse, arrives in their community and is expected to be delivered.
Gaining privileged customer insights can be among a retailer’s most important capabilities. As PwC’s Paul Leinwand and Mahadeva Matt Mani argue in their recent book, Beyond Digital: How Great Leaders Transform Their Organizations and Shape the Future, the better your insights, the more you can increase your value for customers.
Many consumers will share their most useful and private information with retailers if the value they get in return resonates with them and they feel a retailer can be trusted with their data. Half of respondents say they’re open to sharing their information if it’s not disclosed to other companies or third-party providers. A similar proportion (48%) express the same willingness where there’s a clear data security policy.
It’s hard to understate the importance of this issue to consumers. Nearly three in five (59%) say the protection of their personal information greatly influences their trust in a brand—more than any other factor.
Retailers are developing new ways of engaging consumers through personalized and customized experiences made possible by advances in analytics and predictive insights technologies. But adapting to changing market and regulatory expectations on privacy, as well as establishing the necessary internal controls, can present challenges.
Brands build trust with consumers when they’re transparent about how customer data will be used. This level of openness, combined with a commitment to keeping consumers’ personal data private and secure, can be woven into a foundational approach we call data trust: making sure you’re using data responsibly, securely and ethically so it’s a source of long-term value.
Many retailers understand their environmental, social and governance (ESG) performance can build consumer loyalty, advocacy and trust. Our findings show social factors—such as how a company supports human rights, local communities and employee inclusion and diversity—are particularly important to Canadian consumers. Nearly half (46%) say this often or always influences their trust in a company or brand.
But fully unlocking value from your ESG efforts requires consumers and other stakeholders to understand the impact you’re making through relevant and proactive reporting. More than half (53%) of consumers say a company’s transparency around its business practices influences their decision to buy its products—the most-commonly cited factor.
Many socially conscious Canadians also say they’ll pay a premium for products produced or sourced locally (75%) or domestically (66%). Those figures are lower than the number of global consumers willing to pay more for local (80%) and domestic (78%) products. While smaller in number than in other countries, these Canadians who are inclined to buy domestic products feel more strongly about it serving a useful purpose: consumers in this country are more likely to say they’ll pay a premium for Canadian products to support their local economy (67%, compared to 60% globally). This sentiment is particularly strong among female consumers (75%) as well as consumers under the age of 24 (69%) and above the age of 55 (87%).
ESG factors are a significant part of building trust with customers. And consumers are showing their willingness to leave behind those brands that don’t demonstrate a purpose aligned with their own values.
We’ve seen powerful outcomes when brands have a solid understanding of their consumers’ priorities and expectations. These insights can help you develop a trust roadmap that analyzes how your actions match these expectations and includes tools to measure your progress. Making ESG part of a wider trust agenda can help retailers create meaningful and sustained connections with consumers.
Evolving channel preferences, new lifestyle habits and socially conscious shopping all present new opportunities for retailers to create value for consumers. But earning consumers’ sustained loyalty requires more than one-off initiatives. They need to be part of a strategy-led plan informed by insights into what consumers want and expect—both today and tomorrow.