Old Trends or New Norms?

What Can Retailers Expect this Holiday Season

Remember back when Boxing Day was a holiday highlight for Canadian retailers and shoppers— and Black Friday was an event exclusively held in the US?

If you’re my age or older, the answer is definitely yes. But now, with the emergence of digital shopping, it’s a different ballgame. Bargains that were once geographically specific have become universal, younger generations are embracing a new retail landscape and Canadian businesses are working hard to adapt.

These are just some of the trends that are impacting the retail industry this year—but to call them “trends” might be misleading. Instead, I think these changes are indicators of a new normal in Canadian retail.

1. Shopping is techenabled, but it’s not techexclusive

We might be in the digital age, but that doesn’t mean we’ve abandoned brick and mortar stores. Pwc’s 2019 Canadian holiday outlook— which surveyed more than 1,300 people across different generational groups—shows that consumers prefer mixing online and in-store experiences.

The number of consumers who are only shopping on one channel is falling: just 22% of shoppers buy products solely in-store and 7% of buyers operate exclusively online. Meanwhile, the remaining 71% of consumers use both digital and in-person touchpoints, spending more on average than their singlechannel counterparts.

During the busy holiday season, a seamless multichannel shopping experience makes a huge difference— something that I’ve come to rely on when we head off on our annual cottage vacation. On our way up, we catch a water taxi in Campbell River, a town on the east coast of Vancouver Island that has two Canadian staples: Canadian Tire and Save-on-foods. During the dash to the boat, we appreciate the chance to pre-order groceries and hardware via our mobile devices, and then using the “click and collect” feature, shaving critical time off our commute.

These two homegrown retailers show us how welldesigned, user-friendly mobile apps can make a huge impact on the busy lives of young families seeking to maximize their time together. Knowing we can rely on both retailers to provide seamless service— especially when time is of the essence—has secured our brand loyalty time and time again and these retailers are top of mind for me especially for the holiday season. These examples remind me how companies who invest in innovative ways of guiding shoppers through their multichannel retail journeys can differentiate themselves from the competition.

2. Younger consumers are redefining retail trends

This year, Canadians are going to spend about 41% of their holiday shopping time on digital channels, which is 4% higher than last year—and the younger generations will drive these numbers higher still. Millennials will spend 55% of their shopping time on their devices, while Gen Z are doing half their shopping online while also returning to more traditional retail.

This is a great opportunity for brands to double down on digital—especially since these younger generations could be 2019’s biggest spenders, with 35% of millennials and 42% of Gen Zs planning to spend more money on holiday gifts and self-pampering than they did last year.

In what might seem like a paradoxical twist, younger shoppers are also driving the demand for meaningful brand experiences, expecting to be both entertained and mesmerized by their brick and mortar shopping trips.

And increasingly, stores are responding by becoming experience centres for their customers.

The spending habits of millennials and Gen Z are a good sign for businesses, because globally, these are the generational groups that identify with Canadian brands. According to our Made in Canada report, which surveys consumers in the seven

CETA and CPTPP countries, 88% of millennials have a strong interest in Canadian culture and 78% have bought Canadian-made goods. To capitalize on this interest, companies should consider expanding into overseas markets with a digital sales strategy that tests for demand for their brand before they establish a more permanent presence.

3. Brands can benefit from collaborations to enhance the customer experience

Customer-focused partnerships are another trend redefining retail. Take Tru Kids Brands—the parent company of Toys R Us—and their recent announcement that they would be teaming up with Target to revamp their ecommerce strategy. It might seem an unorthodox choice, considering the two businesses have always been direct competitors, but it’s another sign that brands are increasingly willing to work together to co-create solutions for their customers.

As we see the rise of experience centres in the retail environment, there’s room for more collaborations. Whether it’s the coffee bar opening in the high-end fashion boutique, or the showroom for audiovisual systems that also markets furniture on display, brick and mortar stores have the potential to evolve into places where customers can engage in-person with many of their favourite brands. Companies can join forces in other ways as well—whether it’s sharing distribution channels and delivery services or investing in shared technology and digital platforms. Big box retailers have the funds to develop powerful apps in house, which means that smalland medium-sized players need to be more creative in forming partnerships that will allow them to innovate their processes and offerings.

On a related note, companies should consider partnering with local and national retailers in other markets so that they can sell their products in-store overseas. Our research shows that globally, consumers want to buy more Canadian brands, but they also want to shop in local stores. Brands looking to expand overseas should also consider partnerships with retailers in their target markets so that they can sell their products instore. This would also remedy the biggest barrier to Canadamade goods, which is lack of availability.

4. The shift from Boxing Day to Black Friday is real

The age of ecommerce has altered our holiday shopping culture in a big way because of Black Friday—and I meant it. Originally, Canada’s major discount day took place right after Christmas, and it was a practical opportunity for retailers to offload their overstock. It still is, but to a lesser degree.

Now the retail event of the year is in November, at the height of the holiday shopping season, and retailers need to plan in advance so that they have enough product available. This is the season when brands leave a lasting impression with buyers—and that impression depends significantly on whether they can address people’s timesensitive requests. The same goes for shipping deliveries, where companies are under pressure to keep up with the one- and two-day shipping standards of Amazon Prime. Retailers also need to remember that the ads consumers are getting on their phones aren’t always tailored to specific geographic areas; people follow their favourite brands globally, not regionally. If you’re going to sell worldwide, you should be ready to honour your brand promises to customers from all locations.

5. Consumers want to give gifts that do good in the world

Canadian brands and products have a positive reputation worldwide. 96% of respondents to Pwc’s Made in Canada have a favourable perception of the country overall. In six of the seven nations surveyed, the first word people associated with Canada was “friendly”; other leading adjectives included “clean”, “trustworthy”, “reliable” and “sustainable”. Those are traits that retailers should take pride in—and capitalize on.

The holidays present a prime time to do just that—and retailers that create magic moments with their customers stand to get ahead. More and more, people are seeking gifts that have a positive impact on society, and corporate social responsibility goes a long way towards helping consumers feel good about their purchases. As an added bonus, they’re also willing to spend more on sustainable brands, according to our 2019 Consumer Insights Survey. Sometimes we complain about how the holidays are stressful and hectic for retail companies and consumers alike. But they’re also fun, fulfilling and abounding with opportunity. How can your retail company make the most of this unique time of year? As you brace for the magic of the holidays, reach out—i’d love to continue this conversation with you.

By: Robert Coard Partner | BC Region Industries Leader | Technology and Consumer Markets Leader for Western Canada at PWC Canada For local questions: Miranda Hardy - PWC Private Company Services - 604-495-8960 -miranda.e.hardy@pwc.com