As we approach the 2019 holiday season, Canadians are feeling generally positive about the economy and the state of their personal finances—and this merriment comes with an anticipated uptick in holiday spending.
This year’s holiday retail trends also show that multi-channel shopping is on the rise. What’s more, customers increasingly favour making their holiday shopping an event, driven largely by millennials and their preference for experiences over things. Making sure retailers providing meaningful experiences will pay big dividends.
Our 2019 holiday retail spending forecast explores the shopping behaviours retailers need to be aware of over the next few months, based on a national survey of more than 1,300 Canadian consumers across generational groups.
Canadians’ confidence in the economy and their own personal finances is up, and with it comes an uptick in 2019 holiday spending: up 1.9% to an average of CA$1,593. And while a quarter of Canadians plan to spend more than last year, it’s younger shoppers who are leading the charge, with 42% of Gen Z and 35% of millennials bringing more joy to their world.
Younger shoppers are also much more optimistic about the future, which may be influencing their holiday spending habits. And while one-quarter of Canadians describe their personal finances as better than last year, Gen Z (38%) and millennials (31%) view theirs more positively. But this positivity comes with credit concerns, as these younger buyers are also more worried about credit card debt piling up.
Canadians plan to spend 41% of their holiday shopping time online, up 4% from last year, but the bulk is still done in-store. Similar to last year, millennials continue to drive the shift to online (55%), and Gen Z shoppers will split their time 50-50 between online and in-store buying.
Amazon Prime memberships in Canada are up 60% from last year, now in 37% of Canadian households. While lagging behind the United States (where three out of five are Prime members), there’s strong momentum heading into the holidays.
Purchasing items through smart home technology is also on the rise, especially among younger generations. Gen Z and millennials are leading the charge, with 6% buying holiday gifts with the help of Alexa and other digital assistants. And nearly three out of ten millennials will use smart tech to purchase items using voice activation.
Millennials continue to drive the shift to online (55%), and Gen Z shoppers will split their time 50-50 between online and in-store buying.
A quarter of Canadians plan to take a “digital detox” this holiday season, led by Amazon Prime members (33%), millennials (31%) and Gen Z (30%). These young and stressed digital detoxers are always connected and more likely to overindulge and self-gift. They spend a considerable amount of time shopping online and are willing to purchase and pay with a smartphone.
Physical retail continues to persevere through multi-channel experiences. The seven out of ten holiday shoppers who plan to shop both online and in-store will also be spending more than single-channel shoppers. With multi-channel customers, is vital to keep them engaged from first impressions to the point of sale.
Our survey shows more than one-third of Canadians plan to make an event of their shopping time and to shop where there are also restaurants, movie theatres and other entertainment facilities—and this surges when we look at millennials.
This means that Canadians aren’t abandoning in-store experiences, and retailers that focus on creating a winter wonderland for customers will be in a strong position to compete. Consumers are increasingly discerning, so most organizations need to invest far more in customer experience than what’s being done now. What’s more, the emergence of augmented reality and improved mobile technology will continue to push retailers to add layers and new experiences to their traditional models.
Delivery has become an extension of the shopping experience, and home delivery remains the most popular, strongly favoured by all generations. But in-store pickup is growing in favour, with half regularly or occasionally using this method. And with 65% of employed Canadians working from home all or some of the time, delivery will continue to be an important element of retail strategy.
Cross-border shopping is set to go up compared to last year. These shoppers, who tend to be looking for great deals, are more likely to be younger than 35 (49%) and live in a metropolitan area (54%). They’re also focused on experience and want to make an event out of shopping.
Programs like Amazon Prime have also made one- and two-day shipping the standard, so it’s reasonable to think consumers will expect comparable speeds from all retailers. Cutting down on shipping time is vital for any retailer to stay competitive.
Most holiday shoppers are paying attention to sustainability, driven by younger consumers who are more likely to choose sustainable products and products with a traceable origin. And two-thirds of consumers are more likely to shop with retailers they trust over the holiday season. Our 2019 Consumer Insights Survey also shows shoppers that care will pay a premium for sustainable brands, and retailers need to build a trusting relationship if they’re going to keep current customers and attract new ones.