At a glance
As their in-store shopping habits solidify, Canadian consumers say self-service technologies and helpful staff can further enhance their retail experiences.
Supply chain disruptions are still testing the loyalty of Canadian consumers, many of whom frequently shop with multiple retailers to meet their needs.
Canadian shoppers withhold data, opt out of communications and even reduce their spending when they’re concerned about the privacy of their personal information.
Rising prices, a potential recession and high levels of uncertainty weigh on the minds of Canadian consumers. Nearly half (47%) told us they’re either very or extremely concerned about their personal finances. And 70% are cutting back on non-essential purchases in response.
On the surface, this may seem like a bleak forecast for retailers and consumer goods companies. But that overlooks the resilience of Canadian consumers. Year-over-year retail sales are actually up in recent months, according to Statistics Canada[1]. Shoppers are still spending—albeit with greater price sensitivity and a desire for enhanced digital and in-person retail experiences.
At the same time, businesses have new avenues for meeting these evolving expectations and differentiating their brand by reducing costs and creating frictionless experiences. Combining human ingenuity, expertise and technology-enabled innovation lets you reimagine your operations in ways that help win market share today and position your organization for future growth.
The findings from our latest Global Consumer Insights Pulse Survey can help companies on this journey. We heard from more than 500 Canadian respondents from across the country, as well as thousands of their peers around the world, in late 2022. They told us about their shopping habits, spending intentions, friction points and what they value the most when interacting with brands. What stood out to us was the high standards shoppers have for retailers and consumer goods companies. They expect fast and efficient service—but also prioritize meaningful and trustworthy interactions.
More Canadian consumers look to rein in their spending
The majority of Canadian consumers expect their spending to either increase or remain unchanged across most product categories in the coming months. That’s good news for retailers and consumer goods companies.
But, at the same time, the number of consumers who plan to decrease their spending climbed since our last survey—another sign of Canadians’ growing concerns about their personal finances.
Use the drop-down filter to compare the decrease in spending intentions of different age groups between our most recent consumer surveys.
March 2022
December 2022
Question: Thinking about your spending over the next six months, please describe your expectations on spending across the following categories. (Figures show the percentage of respondents who expect to decrease their spending.)
Creating in-person experiences consumers value
The pandemic—and the related restrictions on in-person activities—upended consumers’ shopping habits. But, after several volatile years, we see consumer preferences solidifying. Our survey results are clear: Canadian consumers enjoy in-person shopping, with 73% visiting physical stores at least monthly.
Consumers also told us about their in-store shopping trips, including what frequently detracts from their experiences. Unsurprisingly, rising prices for household goods was far and away the most common answer, cited by 67% of respondents.
Among the next tier of responses, one in particular stood out to us. Nearly one-quarter (23%) of Canadian consumers say stores feel busier and they frequently stand in long lineups. For many retailers, this stems from the widespread labour shortage affecting the wider economy. Unfortunately, few expect the situation to imminently improve. In fact, our 26th Annual CEO Survey found 46% of Canadian consumer markets CEOs expect employee resignations and retirements will increase throughout 2023.
Greater use of automation and other technologies can be an effective response to this challenge. And it’s also an opportunity for retailers to set themselves apart.
Why Canadian consumers want to shop in-store
Question: Why will you shop in physical stores and/or use click-and-collect services?
Creating captivating self-service
retail options
Self-service technologies that let consumers bypass human cashiers are growing in popularity. Many grocery stores and pharmacies allow shoppers to scan and pay for their purchases at kiosks. Some fashion retailers, meanwhile, attach radio-frequency identification (or RFID) tags to clothing so a shopper’s purchase is automatically tabulated when they place their basket at a self-serve checkout. We’re also seeing the emergence of grab-and-go offerings, powered by smart cameras, artificial intelligence and the Internet of Things, that let shoppers pick products off a shelf and then leave the store without the need to scan or check out.
Self-service checkouts in particular stand out to Canadian consumers. Nearly half (48%) say they’re an attractive feature of in-store shopping. And 20% say they’re drawn to scan-and-go technologies, which let consumers log purchases as they shop using their mobile phone’s camera and a retailer’s app. We believe that figure will grow as more Canadian consumers encounter this technology. In the United States, where scan-and-go technology is more common, 30% of consumers say it’s appealing. That figure is even higher globally, at 34%.
Powerful technology platforms underpin these offerings. But implementing self-service technologies involves more than swapping traditional cash registers for new kiosks.
We’ve seen successful retailers start with a clear vision of the frictionless shopping experience they want to create. In addition to changing the checkout process, it might include consumers downloading personalized offers to their phone as they enter your store. Or using your company’s app to browse products while they’re in your store (something 34% of Canadian consumers find appealing).
Our colleagues in the United Kingdom recently explored how decisions on which technologies to introduce—as well as when, where and how to roll them out—can align with your strategy, operating model and customer preferences. It’s also important to think about the metrics you’ll use to measure the performance of your new offerings as well as the employee training and capabilities needed to support them.
The self-service technologies that appeal to consumers
Canada
US
Global
Question: Which of the following potential attributes of the physical store shopping experience do you find appealing?
Enhancing your people’s potential to create differentiated customer experiences
It’s true that self-service technologies mitigate staff shortages and rising labour costs. But these technologies aren’t about replacing employees. They free up staff to focus on higher-value activities that enhance the in-store experience. This is important to Canadian consumers: 52% say knowledgeable and helpful sales associates are an appealing part of in-store shopping. That’s higher than any other factor.
For retailers, the payoff goes beyond customer satisfaction. Store associates who understand a product’s origins and materials—and communicate that story to customers—can unlock the premium many consumers will pay for products that are domestically produced, environmentally friendly or socially responsible.
Canadian consumers will pay a premium for certain products
Question: Considering the current economic climate, to what extent would you be willing to pay a higher-than-average price for the following types of products? (Figures show the percentage of respondents who said to at least some extent.)
But the demands on today’s store associates go beyond answering product questions. The most valuable retail employees understand how social media and other influences shape consumers’ tastes and preferences. For example, a shopper visiting a fashion retailer may reference a celebrity’s outfit they saw online. A perceptive sales associate can curate several pieces of clothing from the store to help the customer create a similar look.
Employees also create a differentiated consumer experience when they use technology to remove points of friction for shoppers: price-matching an in-store product to the online price, for example, or ordering an out-of-stock in-store product from a warehouse for delivery to the customer’s home.
Offering these services often requires upskilling employees. While some vendors offer targeted training solutions, upskilling is just one part of a bigger opportunity to use technology to improve the employee experience. Enterprise systems that include tools for performance management, recruitment, onboarding, career planning and compensation help employees understand how they fit within the company and affect its business outcomes.
Companies can also increase employee engagement through rapid onboarding and by equipping staff with productivity-enhancing tools that modernize inventory locations, cycle counting, backroom receiving and service department performance. These help businesses adapt to a tight labour market and higher staff turnover, including the loss of long-tenured employees with in-depth knowledge of your operations.
Fulfilling your delivery promises and addressing supply chain irritants
Product shortages and delivery delays aren’t occurring as often as a year ago. But they’re still commonplace, according to consumers.
The more hurdles consumers encounter when getting the products they want into their hands, the more likely they are to seek alternatives. More than a third (34%) of Canadian consumers say they frequently respond to these disruptions by shopping at multiple retailers. A similar number (32%) buy retailers’ store brands as a substitute. And 28% use comparison sites to look for availability. Canadian consumers are also clear on their unwillingness to spend more on alternatives. Only 13% say they frequently pay for pricier substitutes—notably less than in the US (25%) and globally (24%).
This threatens established relationships between brands and their customers. But it also creates new opportunities for companies that mitigate these supply chain challenges. We already see many retailers and consumer goods companies reimagining their supplier and distribution networks. In our recent CEO Survey, 49% of Canadian consumer markets CEOs told us they plan to adjust their company’s supply chains in 2023.
In some cases, this means diversifying suppliers, nearshoring and establishing regional manufacturing operations. Leading companies use data and analytics capabilities to inform these decisions. These tools give them a clearer view of where their components and products originate and let companies run more sophisticated scenario analyses. We also see businesses turning to automation technologies to accelerate their internal distribution network, remove variability and address a progressively tighter labour market.
Businesses that successfully implement data, analytics and automation capabilities into their supply and distribution networks can reduce their cost structure. They also have an opportunity to grow their market share: one in five Canadian consumers says they expect to increase their spending over the next six months with retailers that provide an efficient delivery service.
Supply chain disruptions affecting Canadians’ shopping experiences
Online
In-store
Question: In the last three months, how often have you experienced any of the following while purchasing a product? (Figures show the percentage of respondents who experienced the issue at least occasionally.)
Building trust with omnichannel consumers
Consumers told us they love in-store shopping. But many are also present on other channels. For example, 42% of Canadian consumers shop on their phones at least monthly—a number we believe is temporarily low. Globally, 62% of consumers purchase products through a mobile device at least monthly. It’s only a matter of time before Canadian shoppers catch up.
For retailers and consumer goods companies, capturing a share of this growing market requires more than mobile-friendly e-commerce features. It takes a reimagination of how consumers use technology across multiple channels—sometimes simultaneously—to interact with your brand.
One channel we’re watching closely is the metaverse: immersive virtual worlds accessible through different platforms that let users socialize, work, play games and buy digital and tangible objects. Globally, it’s still in the early stages of adoption, with only 26% of consumers using the metaverse. That figure is even lower in Canada, at 12%.
Similarly, few companies see the metaverse as a priority. In our recent CEO Survey, only 5% of Canadian consumer markets respondents said they planned to invest in metaverse initiatives this year. That’s slightly below the global average of 9%. The metaverse isn’t ready for the limelight—yet. But we already see some retailers and consumer goods companies using creative techniques to create value in the metaverse.
Luxury fashion brands are among the notable early adopters. Some are applying gamification techniques to exhibit their collections in new ways, engage younger audiences and sell both digital designs and physical products in the metaverse. This includes creating games in which players select and customize the company’s apparel for their character to wear as they complete activities and compete to win digital and physical items. Brands are also creating their own immersive spaces in digital worlds for visitors to walk through and learn more about the company as well as view, try on and purchase digital products.
Our colleagues in the US found that leading companies align their metaverse efforts to specific and measurable outcomes, such as brand building and customer engagement. They’re also maintaining their initiatives with testing and performance monitoring. But we believe the success of metaverse ventures rests on a factor more important than functionality: trust.
Room for mobile shopping growth in Canada
%
Canadian consumers who shop on their phones at least monthly
%
Global consumers who shop on their phones at least monthly
Obtaining data-driven insights with confidence
The metaverse and other digital channels, combined with investments in data analytics, let companies collect data that helps them learn more about their customers’ behaviours and journeys. Companies can use this information to make better market predictions and personalize their offerings. But the value of this data needs to be unlocked in a secure and ethical way
One-quarter of Canadian consumers say they’re highly concerned about the privacy of their personal data when engaging retailers and consumer goods companies. That puts the sector in an enviable position. By contrast, 43% say they’re highly concerned about their data when interacting with social media companies. One possible reason for the discrepancy is that consumers often see a return on providing data to retailers in the form of vouchers, discounts and special offers.
But a single high-profile incident is enough to destroy consumers’ trust. And consumers are already acting on their data privacy concerns. More than half (51%) of those who are concerned about the privacy of their personal information don’t share more data than required. And 34% say they’ll cut off communication by opting out of email and text messaging. Farther down the list, but potentially more serious, 19% say they’ll reduce their spending with a company when they’re skeptical their data is being protected.
Companies that take an integrated approach to data privacy gain a better understanding of their customers’ wants, needs and behaviours while also safeguarding personal information. A formalized program for generating, protecting, governing and disposing of data lets you handle information securely—helping you comply with evolving regulations and protecting your reputation—while also mining it for insights.
We’ve seen powerful outcomes when businesses combine this data trust approach with opt-in loyalty programs. It’s an effective way of transparently personalizing offers to consumers and helps avoid the consumer wariness and regulatory risks of more opaque data collection methods. This mutually beneficial model of gaining privileged insights helps retail and consumer goods companies sustain their most important customer relationships.
%
of Canadian consumers will reduce their spending with a company if they’re concerned about the privacy of their personal information.
A human-led, tech-enabled approach to meeting consumers’ needs
Retailers and consumer goods companies can reduce costs and respond to shifts in customer behaviours through targeted technology investments. But it takes more than one-off process enhancements or isolated digital offerings.
You can help make your vision a reality by starting with a clear concept of the consumer and employee experiences you want to create, as well as an understanding of how to implement the right technology solutions. This human-led and technology-powered approach lets companies meet consumers’ needs today while also earning their sustained trust and loyalty.
Footnotes: 1. “Retail trade sales by industry,” Statistics Canada, February 21, 2023
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National Consumer Markets Leader & Global Consumer Markets Advisory Leader, PwC Canada
Tel: +1 416 687 8598
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