While concerns for data breaches are top of mind, consumer spending is expected to rise this holiday season
Retail sales projected to increase by 2-2.5% this holiday season
Toronto, Ontario – November 3, 2014 – According to Deloitte's Holiday Retail Outlook survey, 79.8% respondents are concerned about online personal data breaches. The survey uncovered that almost half of respondents indicated they would be more cautious when shopping online (48.5%) and no longer shop online (2.4%) as a direct result of the recent online security issues.
81.1% of respondents believe the economic outlook for Canada will remain the same or improve in 2015, setting relatively optimistic expectations for holiday retail sales to increase by 2 to 2.5% for a modest improvement. Almost half (49.7%) of survey respondents feel very and somewhat secure about their job in 2015. 65.7% of respondents are planning to spend the same or more money this holiday season on gifts, entertainment, décor and donations compared to last year.
Cybersecurity: Time is running out and consumer patience is wearing thin
"Shoppers are starting to rethink how they shop online given the recent breaches of personal data. Survey data tells us that for the time being, shoppers trust lenders and retailers to make things right in the event of a data breach, but time is running out," said Ryan Brain, Partner and National Consumer Business Leader at Deloitte in Canada. "Ultimately, consumer patience will wear thin. Online shopping is a big trend and consumers will continue to make purchases over the Internet, but retailers that fail to prevent and proactively address security breaches will risk the loss of substantial brand trust as consumers look to shop elsewhere."
The risk of losing online shoppers to a competitor because of personal security breaches is significant. Sales will be impacted and an organization will also be at a disadvantaged position because these organizations will no longer have access to important customer data.
Browse, click, shop
Shoppers will do their pre-shopping outside of the store and social media and technology will enable consumers to do so. Findings report that savvy shoppers will rely on electronic devices for research like checking prices online using their desktops (77.3%) and mobile devices (39.8%). Compared to last year, a quarter (25.4%) of respondents will research online more compared to last holiday season for coupons, prices and deals. Product reviews will play an important role in holiday shopping this season with almost a third (32.8%) of respondents reporting that social networks, blogs and store websites will be used to research products.
"Early adopters of online shopping were from metropolitan areas because of density and proximity to distribution centres, which meant faster delivery times,” said Brain. "Today, a higher uptake in the use of social media, blogs and smartphones for shopping is concentrated in city centres. This is a sign that there is an evolution from online shopping towards a preference for multichannel when it comes to where, when and how consumers shop."
Holiday shopping: Customers take charge
Several options are available to shoppers providing them with flexibility and personal attention that is changing the way consumers shop. When it comes to making online purchases, 67.8 % respondents feel that collecting their merchandise in-store is attractive and desirable. Based on consumers who shop online, 94.2% of respondents said home delivery was desirable and attractive. Some retailers now offer an option for consumers to pick up their online purchases from secure delivery lockers located in malls, transit stations and other security stations, a new retail trend. The majority of survey respondents (60.7%) were not interested in picking up their online purchases from a locker, but it will be interesting to see whether Canadians warm up to it as shoppers in other markets around the world have done. Data on the various options available for consumers to pick up their purchases after check out indicates that the choice available to shoppers is appealing.
While the online shopping trend continues to grow, those who plan to shop online still indicated that 70.4% of their holiday shopping would still be done in-store. The top three attributes of an in-store experience include, competitive prices (75.8%), no pressure to buy from sales staff (53.3%), quick check-out (44.7%) and knowledgeable staff (42.9%).
Books are the gateway to online shopping with 61.6% of respondents indicating they would consider buying books online. Rounding out the second and third spots for items that shoppers would consider buying online are electronics (59.2%) and clothing (56.3%).
Once again, Atlantic Canadians take the lead for starting their holiday shopping early with 28.5% of respondents indicating they have already begun. Atlantic Canada respondents have a higher preference for shopping in-store (72.8%)compared to other regions. Recent improvements to malls in the area could be a factor. Last year, survey results showed that 45.4% of respondents did not shop online. This year's results report that only 28.6 % of respondents do not shop online. This drop shows that the online shopping has made its way out to the east coast.
Montrealers attach more importance to the experiential and social aspects of holiday shopping. Compared to the national average of 9.6%, 13.7% of Montreal respondents feel the festive atmosphere created inside a store is one of the top elements that contribute to an ideal in-store shopping experience. In addition, 29.4% of Montreal respondents find that digital signage in a store adds a festive and exciting flavour to their shopping experience, compared to only 20.3% nationally. Being able to quickly make their purchases and leave the store seems less important to Montrealers. In fact, only 32.4% of Montreal respondents said a quick check out would create an ideal in-store shopping experience compared to 44.7% of respondents nationally. This aspect suggests that Montrealers are more likely to enjoy a full in-store experience.
Compared to last year, Vancouver respondents (12.3%) are more likely than respondents in the rest of Canada (8.4%) to spend more this holiday season on gifts, entertainment, decorations and donations. Vancouverites are getting an even earlier head start on shopping this year: 57.8% of Vancouver respondents will do their holiday shopping before December, which is up from 47.7% in 2013. What appeals to Vancouver shoppers is an authentic shopping experience that is thoughtfully curated. When shopping in-store, Vancouver respondents prefer environments where there is no pressure to buy (58.6%) and knowledgeable staff (43.7%).
Torontonians are ahead of other Canadians for online shopping with 36.3% of Toronto respondents indicating they will do their shopping online, compared to the national average of 30.6%. Toronto also leads with using of social media to check prices with more than half of respondents (50.7%) indicating they do so. Almost a third (32.6%) of Toronto respondents would use their smartphones more if it would help them shop more efficiently.
42% of Toronto respondents have a preference for buying from a brand direct retailer rather than a department store. Metropolitan cities offer more brand direct and boutique stores to choose from, which could explain the higher preference in Toronto.
About the survey
The poll was conducted between September 19 and September 30, 2014. A sample group of 2,019 Canadians was interviewed using an online methodology. Weighting was then employed to balance demographics and ensure the sample’s composition reflects Census data for the adult population and to provide results that reflect the sample universe. A survey with an unweighted probability sample of this size and a 100% response rate would have an estimated margin of error of +/- 2% points, 19 times out of 20, of what the results would have been had the entire adult Canadian population been polled.
Deloitte, one of Canada's leading professional services firms, provides audit, tax, consulting and financial advisory services. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited. Deloitte operates in Quebec as Deloitte s.e.n.c.r.l., a Quebec limited liability partnership.
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