TORONTO, ONTARIO--(Marketwired - Nov 1, 2013) - Deloitte's Holiday Retail Outlook survey forecasts Canadian retail sales to grow by 2 to 2.5 percent this holiday season. Despite a challenging year for the retail sector, consumer confidence is up with cautious optimism for projected retail sales to be at least 43 percent stronger than last year. Findings also show that cross-border shopping has leveled off as 73.8 percent of Canadians are unlikely to go cross-border shopping. Retailers will face intense competition with consumers being more price-focused than ever.
Increased personal duty exemptions do not seem to provide an incentive for Canadians to leave home soil and shop in the US. While cross-border shopping has plateaued, 76.3 percent of Canadians say that the arrival of US retailers in Canada hasn't reduced their cross-border shopping. However, US retailers still compete for their share of the Canadian market using online and mobile channels and with brick and mortar stores located north of the border.
Tis the season to shop online
Online shopping makes it possible to shop virtually anywhere without having to leave home. Nearly one quarter (27.9 percent) of Canadians prefer to shop online than go to the mall, so it's not surprising that online sales will make up a significant 18.9 percent of holiday budgets
"Physical stores will stay, but the hyper-growth will be online because it is more profitable," says Brent Houlden, Partner and Canadian Retail Leader, Deloitte. "Shopping is an enjoyable pastime for many Canadians. Retailers need to embrace omnichannel shopping models to create an engaging check-out experience and address some of the current shortcomings with online shopping that make it difficult for consumers to check inventories online, return items by mail and ship out of stock items that are in inventory at another location."
Making a list, checking the price
With several retail players competing for a share of sales, low prices will be the most important consideration for 64.3 percent of consumers who find it to be the most important attribute they look for from a retailer. Shopping behavior will change this holiday season as Canadians plan to buy more items on sale (31.6 percent), research online for better prices and discounts (24.7 percent), look for free shipping offers (21.6 percent) and take advantage of flash-sales (9.7 percent). Interestingly, higher income earners use the Internet more for research and flash sales than lower income groups. Almost half of Canadians will use social media to check prices while 23.8 percent of Canadians would like to use their smart phones to check prices while shopping.
"Technology and social media provide consumers with tools to comparison-shop, get promotions and take part in loyalty programs," says Houlden. "Showrooming can be a good selling opportunity for retailers, not a scourge. Since consumers like to research and check prices before coming to stores to check out a potential purchase, the focus should be on conversion tactics to get the sale."
Traditional retailers can respond by price matching, bundling products, offering exclusive products and building out store and online initiatives. 62.5 percent of Canadians are not offended and neutral to retailers analyzing their shopping and purchasing behaviours. The study also found that 26.5 percent of Canadians are willing to share more personal data with retailers in return for preferential treatment and special offers.
- Saving money for the future and thinking about consumer debt levels are priorities for Canadians. If Canadians were to earn a bonus or have extra income in the coming months, 32.7 percent of them would save the money and 38.4 percent of them would use the extra cash to pay down debt.
- Canadian shoppers are off to an early start with holiday shopping. Close to half (40.6 percent) of Canadians have already started or plan to start before Black Friday on November 29. The Canadianization of Black Friday has shifted the holiday shopping from weather driven timing, like the first snowfall, to a concrete date.
- In previous years, tech gadgets like e-readers, tablets and TVs have been hot ticket items that topped wish lists. This holiday season, the next generation gaming consoles due to launch in November could be the item that helps boost holiday retail sales. Electronics that have been popular gift items in the past have already found their way into households making it less likely that these gadgets will drive sales this year.
- Vancouver residents are more likely than consumers from other regions to cross-border shop. Almost half (45 percent) of Vancouverites will likely shop south of the border this holiday season.
- Vancouverites are more generous than their peers in Toronto, Montreal and Atlantic Canada with 8.7 percent of respondents indicating they would spend more on holiday gifts for others, if they were to earn a bonus or have extra income in the coming months.
- Torontonians are more likely to shop online than their counterparts in other areas of the country. Toronto residents plan to spend 25.2 percent of their holiday budget online.
- More than four out of five Toronto shoppers (83.8 percent) regularly compare prices online and nearly half (49.6 percent) do so on their mobile devices. Given that most distributions are located in the GTA, the speed with which items are shipped and delivered continues to make online shopping appealing.
- Montrealers are the least likely to start their shopping early. Only 35.9 percent plan to begin shopping before Black Friday, compared to 40.6 nationally which suggests that the American phenomenon does not resonate in Quebec as it does in other parts of Canada.
- Price is more important to Montreal shoppers than other cities in Canada. Almost 80 percent of respondents indicate lowest prices as the key attribute they look for in a retailer compared to the national average of 64.3 percent
- Atlantic Canadians are well ahead of other regions with their holiday shopping with 32.2 percent who have already started
- 41.2 percent of Atlantic Canada residents plan to spend less this holiday season, a notably higher percentage than other regions. Atlantic Canada represents the region with the highest number of Canadians who do not shop online (45.4 percent) and do not check prices online (42.2 percent)
About the survey
The poll was conducted between September 20th and September 25th 2013. A sample group of 2,008 Canadians was interviewed using an online panel. Weighting was then employed to balance demographics and ensure the sample's composition reflects Census data for the adult population and to provide results that reflect the sample universe. A survey with an unweighted probability sample of this size and a 100% response rate would have an estimated margin of error of +/- 2 percentage points, 19 times out of 20, of what the results would have been had the entire adult Canadian population been polled.
Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting, and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited. Deloitte operates in Quebec as Deloitte s.e.n.c.r.l., a Quebec limited liability partnership.
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.