Experts agree that 2020 will be a record-breaking year for online sales. The entire customer journey has gone digital, from marketing to direct sales.
Online retailers (62%) and mass merchants (50%) are the top holiday shopping destinations in Canada this year, as shoppers pull back from physical browsing. Fifty-one percent are anxious about shopping in-store during the holiday season due to COVID-19. Sixty-six percent say they shop online because it is easier than going to the store, especially this year.
Sixty percent of shoppers prefer online rather than a physical store during the holiday season. Sixty-five percent prefer shopping online to avoid crowds. Canadians expect to spend sixty-four percent of their total holiday budget online, spending an average of $892.
“As these shifts to customer behaviours become even more entrenched, retailers that step up their efforts to adapt have a better chance of winning,” suggests a recent PWC report. “Now is the time to be bold and embrace creative solutions while adapting and making difficult decisions about your operations.”
Retailers are scrambling to prepare their digital presence to maximize festive profits. They’re concerned about their supply chains, deliverability & infrastructure, and a lack of experience with online and omni-channel sales.
If ever there was a time to justify the expense of a robust tools and/or hiring experts, the 2020 holiday season is it. If you’re new to online sales, we have 17 Tips for Your Store’s First Online Holiday Season to help you through it.
Adjust for COVID
The pandemic has far-reaching effects and it shouldn’t be ignored this year. However, we should always have our eye on long-term goals.
Think beyond the trends to identify which categories and products will be in demand in 2020. What is happening and what new opportunities does that offer to your business specifically?
For example, more families have adopted pets in 2020. That creates both ‘need’ and ‘want’ purchasing in the pet category for self-gifting, as well as gifts for new pets or their caregivers. Fifty percent of shopping over the holidays will include pet food and supplies, with consumers spending $90 on average in the category. At least seventeen percent will make these purchases from online retailers.
Adjust your strategy to consider the pandemic and how you can best serve your customers as they cope with it.
2020 Online Holiday Shopping in Canada
How Canadians Choose Which Retailer to Buy From
We all have to compete with other retailers, online or offline. Knowing what Canadians are looking for is an important first step in forming a competitive sales & marketing strategy.
One report found:
- 74% want the best price
- 64% consider the variety of offers
- 63% look to benefit through a loyalty program. 59% of Canadians surveyed collected or used loyalty points or vouchers recently. 40% of participants aged 35-44 prefer receiving digital discount codes, coupons, or loyalty card points. 27% say they favour a loyalty program app.
Deloitte reports the following digital data:
- 61% are looking for the best price
- 49% want high-quality products and brands they can trust
- 46% are looking for variety
- 38% want an easy checkout process
- 36% prefer a website that’s easy to navigate
- 32% consider how easy it is to return a product
- 31% look to ratings and reviews
- 30% want coupons and promotions
Top reasons for shopping online over physical stores (% predominantly online shoppers):
- Avoid crowds 65%
- Comfort of shopping from home 64%
- Free shipping/delivery options 60%
- 24-hour availability 58%
- Easy to compare prices 53%
Top 10 research sources for holiday shopping:
- Online retailers 63%
- Search engines 54%
- Retail stores 47%
- Retailer website or app 46%
- Family/friends/colleagues 38%
- Brand website or app 32%
- Third-part review or price comparison site 21%
- Social media 21%
- Print media 15%
- TV & radio 9%
Only seniors prefer to do more of their holiday shopping research in-store (61%). All other generations prefer to research online.
The top holiday gifts in 2020:
- 42% would like to receive a gift card as a gift, while 48% are buying gift cards to give.
- 37% would like to receive clothing, while 43% will buy clothes to give.
- 14% want games, toys, dolls, etc. (excluding computer/video games), while 40% will buy them.
- 37% would like to receive books as gifts, while 36% are buying books to give.
- 26% are wishing for cosmetics/fragrances/health and beauty aids, while 29% plan to make that wish come true.
- 35% would enjoy an in-person meal at a restaurant or a restaurant gift card, while 28% of gift buyers will feed them.
- 43% want to pocket money or a cheque, but only 27% will go with money gifts this holiday season.
- 30% enjoy receiving beverages (alcoholic or nonalcoholic), and 27% of shoppers plan to give beverages.
- 15% want pet toys, décor and accessories, while 24% plan to buy them as a holiday gift.
- 27% would love to get some jewelry, and 24% will buy jewelry to give.
The 2020 top-selling categories for third-party sellers on Amazon Prime Days, included Bedding, Wireless Accessories, Nutrition & Wellness, Arts & Crafts, and Health Care. In Canada, the top-selling deals were LifeStraw Personal Water Filter, Govee LED Light Strip compatible with Alexa, All Natural Advice Anti-Aging Vitamin C Serum, Instant Pot Duo Nova, and Donut Shop Variety Box Keurig K-Cup Pods.
Here are the top 10 holiday gifts shoppers are buying for themselves:
- Cosmetics/fragrances/health and beauty aids
- Pet food and treats
- Digital content (such as eBooks, music downloads, digital movies, streaming video/music subscriptions)
- Do-it-yourself / home improvement goods
- Home furnishings
Thirty-one percent of holiday spending will be for non-gift items. Forty-five percent of consumers wait for holiday sales to buy big-ticket items for themselves or their household.
Delivery & Returns
Forty-five percent prefer “buy online, return in-store” for convenience. Seventy percent prefer free return shipping.
Preferred delivery service:
- Standard delivery 73%
- Same-day or next-day delivery directly by the retailer 43%
- Buy online, pickup in-store 35%
- Same-day or next-day delivery through a delivery service 15%
- Buy online, pickup in-locker 10%
Annual Shopping Events
Almost half of shoppers don’t plan to shop major events, but those who do tend to spend more.
Share of holiday shoppers by shopping event day:
- Prime Day 13% (Spending $344 out of a holiday shopping total of $1,874)
- Singles’ Day 3%
- Thanksgiving Day 8%
- Black Friday 24% (Spending $410 out of a holiday shopping total of $1,483)
- Small Business Saturday 14%
- Cyber Monday 29%
- None of the above 47% (Spending $1291 in total)
Cyber Monday has surpassed Black Friday in importance for all generations.
Social Media Shopping
Twenty-six percent will use social media for holiday shopping (up to 46 percent for younger generations).
The top three preferred types of influencer-generated holiday content are:
- User review comments on retailer websites or apps 36%
- Product reviews in blogs/online forums 26%
- Live video of product use 14%
Sixty-five percent of shoppers are willing to pay extra for a product that has been certified as being socially compliant. The younger the shopper, the more willing they are to pay more for social responsibility (up to 82% for Gen Z). However, around half of baby boomers and seniors are also willing to spend more and should not be ignored.
Environmentally-friendly practices are extremely important to customers and offer a competitive advantage. From your packaging to your website hosting, it’s critical to ‘go green’ whenever possible.
Some Things Never Change
“As COVID-19 continues to be a disrupting force this year, it is comforting to look back at previous holidays and see that some things remain constant,” states the 2020 Deloitte Holiday Retail Survey. “Price, product, and convenience are still top considerations for consumers, and so is the desire to make the season special for friends, family and pets, no matter the circumstances.”
Identify and act on what’s different in 2020, but let proven Canadian shopping habits guide you most. We’re dealing with a pandemic and ranking our priorities accordingly, but who we are won’t change that much. That said, before the pandemic Canadians were already shifting their behaviour to reflect a preference for online shopping. Anything you do to accelerate your digital growth this year, will continue to serve you well long after the pandemic is over.
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