The Royal Bank of Canada (RBC) and the Bank of Montreal (BMO) have released Canadian holiday shopping survey statistics, adding their predictions to those made earlier by Ernst & Young and Deloitte. While they don’t all agree on the level of frugality this season, it’s clear that it won’t be the most profitable holiday for merchants. There are ways Canadian online businesses can benefit from shoppers’ frugal frame of mind, however.
It Depends on Who you Ask
Ernst & Young expects 2012 holiday sales to increase by 3.5% over last year, based on indications of improved Canadian consumer confidence. Deloitte tempers that figure with a predicted 1-2% increase.
The Bank of Montreal’s Holiday Spending Outlook reports that Canadians expect to spend an average of $1,610 this holiday season, $213 more than in 2011. Most of that will be spent on gifts ($674), and the rest on entertainment and travel.
RBC found that Canadians intend to spend $1,182 in total on gifts, entertainment, decorations, and travel, down 6% from last year. Their survey said the average Canadian will spend $629 on gifts and 10% less than last year on other holiday expenses.
Shopping Smarter with the Web
Canadians will be doing a lot of price comparisons this year and that begins online, according to Deloitte. 31% will be using the Web to look for discounts, coupons and sales information. Surprisingly, those with an annual income above $100,000 are most likely to check prices online. Over 55% of Canadians plan to do at least some of their holiday shopping on the Internet, and that number climbs up to 68% in some cities.
It isn’t only finances that encourage online shopping in Canada. The price of gas may encourage online shopping and discourage shopping trips to the US. Time is also a precious commodity, with Canadians working multiple jobs and overtime to pay Christmas expenses. Avoiding long lines in stores and at the border makes online shopping a quicker, easier option.
According to Deloitte, 65% of Canadians will purchase between one to ten gifts this holiday season.
The top gift choices are:
- Gift cards/money
- Food or alcohol
- Health & beauty
The D&T Holiday Mood 2012 survey indicates that consumers find the following retailer attributes most appealing:
- Lowest prices
- Largest selection
- Exceptional customer service
- Loyalty programs
- Personalized offers and promotions
- Multichannel (in-store, online, mobile, etc.) shopping experience
Price is a stronger driving force behind clicking the checkout button than ever before. “With a growing number of consumers turning to the web for product and price research, retailers need to offer outstanding value. The lowest price has become table stakes.” Kim MacDonald, Deloitte Retail Senior Sector Specialist states in their report.
Canadians need to be competitive, but there are other ways we can win online sales:
- Ask yourself how you can help rather than how you can sell.
- Give shoppers a reason to purchase from you, with a focus on unique merchandise, Canadian products, selection, competitive pricing & coupons.
- Show off your corporate responsibility by featuring fair trade, child-free labour, and environmentally friendly products and practices. Ethics are important to Canadian shoppers. For example, a 2013 Ipsos World Vision survey indicated 89% of Canadians would pay more for a product if it was guaranteed children were not exploited to make it.
- Offer gift cards or digital certificates.
- Offer free or flat-rate shipping. Remind shoppers that shopping in Canada means faster arrival of shipments and no surprise duty, tax or brokerage fees when the item arrives.
- Facilitate purchasing with secure, smooth transactions, and a mobile-friendly website.
- Get out there and network with shoppers through blogging and social media. Establish your brand on the latest social networks like Pinterest and find creative ways to subtly promote your products. Compared to other social networks, Pinterest referrals are 10% more likely to complete an online purchase, according to Mashable.com.
It will take effort and ingenuity to win sales in this economy, but web-based businesses (and stores that have online ordering) are better positioned than most. We wish you a lucrative holiday season!
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