Canadian holiday retail sales are expected to grow 3.5 percent over last year, supported primarily by online commerce, Ernst & Young Canada says.
"Retail sales were inconsistent this year. Still, the most recent sales results, bolstered by stronger consumer confidence and the promise of stable interest rates, are generating some cautious optimism in the short term," said Daniel Baer, EY partner and national retail and consumer products industry leader. "That said, retailers are grappling not only with modest sales growth, but increasing competition and an unprecedented pace and intensity of tech-driven change. Consumers are expecting more, especially during the busiest shopping season of the year — the way a retailer responds will have a big impact on its overall results."
EY's recent Americas' Retail Quarterly Report supports that, showing that 70 percent of Canadians research products online before buying. Of those who research online, 58 percent say they then buy a product. Although Canadians still trail American consumers in adopting e-commerce overall, retailers here must carefully evaluate how these shifting trends will affect their client base. That means assessing everything from loyalty programs to digital wallets. More and more, retailers need to evolve from a physical location where products are sold to a comprehensive provider of knowledge, insight, convenience and service.
All that said, Baer notes, "While technology is definitely transforming the retail landscape, consumers remain conservative and focused on price. Online customers are even more price-sensitive and interested in promotions than their traditional consumer counterparts."
Retailers are expected to use a number of strategies to make the most of this holiday shopping season, including deep discounts coinciding with American Black Friday promotions, free and faster shipping, better omni-channel delivery, a shift to digital advertising, improved use of social media, flexible returns, and better websites for tablet users.
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