Site icon muskoka411.com

Holiday Spending To Return To Pre-Pandemic Levels

According to Deloitte Canada’s 2021 Holiday Retail Outlook, seasonal spirit among Canadians is proving resilient. After a tough 18 months weathering the challenges of the COVID-19 pandemic, this year’s holiday outlook finds many Canadians are looking to celebrate, shop, and spoil friends and family. While it should come as no surprise that Canadians are looking to bounce back after last year’s dampened holiday season, overall spending in 2021 is expected to rise a whopping 31 per cent since 2020, and up 8 per cent since pre-COVID levels in 2019.

Despite some ongoing health concerns related to the pandemic, consumers are once again looking to celebrate the holidays, and with one in three Canadians feeling their financial situation has improved over the past year, holiday spending in 2021 is even expected to surpass pre-pandemic levels. Likewise, nearly half (46 per cent) of Canadians are planning to increase their holiday spending in an effort to spoil friends and family. Overall, Canadians plan to spend an estimated $1,841 on the holidays, compared to $1,405 last year and $1,706 in 2019. By comparison, US consumers plan to spend US$1,463 (C$1,831) this holiday season.

“I think this year’s forecast is a testament to the optimism and confidence Canadians feel going into this holiday season, not only in their personal savings, but the country’s economy as well,” said Marty Weintraub, partner and national Retail practice leader at Deloitte Canada. “As we continue to emerge from the challenges set by the global pandemic, Canadians have proved themselves resilient, and are now looking to celebrate and spend their hard-saved dollars, which should bode well for retailers.”

Supply chain worries spur Canadians to shop early

Canadians are keen to start—and finish—their holiday shopping early this year. While the desire to hasten holiday shopping may reflect ongoing health-related caution, allowing consumers to avoid crowds and long lines, it also stems from rising concerns about pandemic-driven supply chain issues and their impact on retailers.

While 35 per cent of consumers plan to begin shopping before November, and 14 per cent intend to complete their shopping on Cyber Monday, another 65 per cent expect to finish their shopping in December, down significantly from 75 per cent in 2019. Although more than half of Canadians (56 per cent) cite COVID-19 concerns as a reason to avoid in-store shopping this year, those who start their holiday shopping late may find themselves forced to head to the shops and malls, as potential supply chain disruptions and shipping delays could make it difficult for online items to arrive in time. Those lesser-known brands and retailers able to overcome supply chain challenges may find significant opportunities to get in front of holiday shoppers and win new customers for the long term.

Bricks-and-mortar retailers shifting to a “transactional” experience

This year, consumers are seeking a “frictionless” experience, drawn to bricks-and-mortar retailers less out of holiday magic, but to avoid shipping costs (56 per cent), interact with a product (55 per cent), and facilitate easier returns (43 per cent). Above all, Canadians crave convenience, with 44 per cent of shoppers planning to get what they need for the holiday season in one trip, and another 38 per cent preferring one-stop shops. Likewise, consumers aren’t inclined to linger, with 44 per cent looking to limit their browsing to get in and out of stores as quickly as possible.

“Since the start of the pandemic, retailers have made significant strides in engaging consumers by increasing their online presence and tapping into social media, but there’s no denying the fact that the physical store is increasingly becoming more of a transactional experience,” added Weintraub. “While it’s yet to be determined whether this is a temporary shift in response to the ongoing pandemic, it is indicative of Canadians’ continuing migration to online shopping. What is clear is that e-commerce and bricks-and-mortar both have a significant role to play along the path to purchase—and a frictionless, omnichannel experience never goes out of style.”

Keeping in line with Deloitte’s report published in the early months of the pandemic, The future of the mall: Building a new kind of destination for the post-pandemic world, there has been a shift in the amount of customers shopping at enclosed malls. Before the pandemic, 24 per cent of customers indicated that they shop at enclosed malls more than once a week; now, only 13 per cent report similar activity. Despite this notable drop in physical shoppers, customers aren’t giving up on traditional retail just yet, with 49 per cent stating they prefer to shop in stores for holiday purchases, spending 55 per cent of their holiday budget at bricks-and-mortar locations.

Canadians want to shop local, but can’t shake the allure of Amazon

Shopping local may be top of mind for most Canadian consumers in 2021, but that doesn’t mean most retailers still won’t have to compete against the enduring allure of Amazon. Although over half of shoppers (53 per cent) want to buy gifts that support local or small businesses this holiday season, Amazon will be the top shopping destination for Canadians (62 per cent), ahead of mass merchants (55 per cent), grocery stores (48 per cent), and warehouses/membership clubs (41 per cent). Likewise, 40 per cent of Canadians are now Amazon Prime members, up from 37 per cent last year.

Despite Canadians’ clear preference for shopping via Amazon, they do express some concern when it comes to the amount of packaging involved in online shopping (48 per cent), although it appears the allure of fast, free delivery may trump the worry of excess waste. All told, most consumers will be looking to Amazon this year for the convenience of shopping from home (62 per cent), 24/7 availability (57 per cent), and home delivery (53 per cent). Likewise, Amazon remains the leading destination for gift inspiration for the second year in a row (57 per cent), ahead of browsing stores (56 per cent) and Google searches (55 per cent).

Learn more about the 2021 holiday spending forecast and retail trends here.

SOURCE Deloitte & Touche

Exit mobile version