“Is it safe?” – Canadians apply a new standard to shopping

TORONTO – When it comes to shopping, Canadians now ask ‘is it safe?’ rather than is it convenient, cheap, or trendy.

A new report by KPMG Canada finds the Covid-19 pandemic has made Canadians rethink how, when, and where they shop. Visits to all but grocers and big box stores have declined sharply, finds the Keeping up with the Canadian consumer report.

The report explores the impact of the pandemic on consumer needs, behaviours, and preferences in general, and then specifically identifies trends in the grocery/restaurant and non-grocery retail sectors.

“The only way sales at bricks-and-mortar retailers can return to historical highs is when the pandemic is under control and consumers feel safe again,” says Kostya Polyakov, partner and national industry leader, consumer and retail, KPMG in Canada.

“Until then, the question retailers need to ask themselves is, ‘have I done enough to pivot online to ensure that Black Friday / Cyber Monday, the busiest shopping weekend of the year, will carry me through the lockdown restrictions and into the new year?”

Spending less on frills

Already, 40 percent of Canadians are spending less on non-essential items, a trend that’s likely to continue. The report finds that Canadians plan to spend 34 percent less on non-grocery items in the next six-to-12 months, signalling a possible decline in revenue opportunities.

“But, relief may come from a previously overlooked demographic – Baby Boomers,” says Peter Hughes, partner and national leader, customer practice, KPMG in Canada. “For a decade now, online marketing has catered to Millennials and Gen Zs, but retailers now have a unique opportunity to capture a new and growing market segment.”

With two-thirds of Canadians increasing their online shopping habits during Covid-19, KPMG research shows that the migration of Baby Boomers to online shopping presents an untapped potential for online retailers, especially when combined with data that indicates this demographic feels the most financially secure.

Currently, 54 percent  of Canadians aged 55+ say they are using online shopping services of large non-grocery retailers more often than in the past, and 49 percent say the same of online shopping hubs.

The research, moreover, indicates they will continue to shop online even when conditions return to normal.

Safety first

The primary decision-making factor among Canadian shoppers is their personal and family health and safety, with 80 percent saying it is “much more” or “bit more” important consideration when shopping. This joins value for money and ease of buying as the top considerations.

The 29 percent who plan to return to their pre-Covid shopping habits said they will continue to practice social distancing, mask wearing, and other precautionary measures like hand washing.

The focus on personal safety has resulted in sharp declines in visits to physical locations, although supermarkets and grocers and pharmacies have as expected weathered the pandemic better, they have also seen a nine percent decline in in-store visits.

Beyond the online storefront

The pandemic forced many Canadian retailers to refocus their business and reallocate investment, the report says.

“For the surge in online spending to stick, the shopping experience needs to be seamless from the moment a customer goes online or opens an app to the second the product or service is delivered or returned,” says Hughes.

“It’s only when the front, middle, and back offices are in sync can retailers then truly build and retain customer loyalty and improve their profit margins.”

Retailers must bring together their customer journey and customer experience data — metrics such as cost-to-serve across products, segments, channels, and touchpoints – and connect it to evaluate assumptions and opportunities.

“We now have six months of curated information about the shopping habits of Canadian consumers, many of whom are new to the online space,” Hughes says.

“By examining cost, customer satisfaction and value, retailers can start to validate or disprove assumptions about the customer experience and uncover new end-to-end insights that can help deliver significant value.”