Canadians May Dip Into Savings For Holidays, Despite Positive Financial Sentiment
/While Canadians in general feel positive about their finances, they may still need to dip into their savings during the holiday season
While the US and China have resumed trade talks, consequences from trade tensions between the two countries are impacting most developed countries, including Canada.
As the trade war between the two countries continues, so too does global economic uncertainty, hurting business confidence and negatively effecting global trade, not to mention investments. Still, some 68% of Canadians, surveyed by Deloitte for the 2019 holiday retail outlook, believe that the local economy will remain at similar or better levels in 2020.
‘Canada shows remarkable stability in these uncertain times: consumer spending is growing at a moderate pace, unemployment rates are at a 40-year low, and wage growth is outpacing inflation. This could be why Canadians are feeling upbeat about the holiday season,’ says the survey.
Canadians feel confident about their personal finances, but they might still need to dip into their savings account
78% of the people surveyed believe that their financial situation will stay the same or improve next year, which is a positive sign for the upcoming holiday shopping season in Canada.
When this season arrives, most people will be ready to grab deals, whatever the consequences to their bank account. That’s why many Canadians will likely dip into their savings, such as their tax-free savings accounts, during the holiday season.
Good news for retailers in Canada - Spending during this holiday shopping should increase
Holiday spending levels throughout the country are expected to increase this season, according to Deloitte. Overall, $1,706 is projected to be spent by each Canadian this holiday season, which should start soon, as 63% of Canadians plan on starting shopping before Black Friday. That’s why companies that implement a sustained holiday selling strategy from early November through December are well placed to maximize revenues during this important time of year.
Online shopping vs. brick-and-mortar stores - Not all purchases are made online
While online shopping is becoming increasingly popular, Canadians aren’t ready to stop visiting brick-and-mortar stores. People still love to go to physical stores, especially to window shop and find inspiration for gifts. For last moment gifts, consumers like to know they can rely on in-store shopping or click-and-collect options with store pickup. Consumers are also increasingly concerned about environmental responsibility, which influences their buying process towards more eco-friendly brands.
What to focus on as a retailer?
It might sound obvious, but to be a successful retailer it’s important to focus on creating frictionless customer experiences by understanding client needs and providing salespeople with the right tools to support customers along the purchasing process. Your sales process has to be organised and consistent, your marketing efficient, and your offers compelling.
Further Reading - In a previous article, How Canadian Retailers Can Target Tourists with Souvenir Offerings, we explained that how ‘successful marketing strategies require developing a marketing mix [with the 4 P’s - product, place, price, and promotion] that will satisfy [your target audience] and find out where the opportunities lie to develop more effective retail strategies and increase [customers’] satisfaction’.