Holiday retail sales in Canada are projected to grow four per cent over last year, with millennials driving spending and British Columbia leading the sales, according to the Ernst & Young (EY) report Redefining loyalty for retail.
In addition, the report points to millennials leading a shift from consumption to experiences, both online and in-store, while being more interested in exclusive invitations than discount offers. And while clothing, toys, electronics and gift cards remain top choices, millennials’ “thirst for experiences” will lead to more gift cards purchases directed towards restaurants and travel.
“Millennials seek experiences, fun and personalized indulgences, and they’re willing to pay a premium for them,” says Daniel Baer, EY partner and national retail and consumer products industry leader. “But for purely functional items, millennials seek convenience, selection and low prices. Millennials are also social-media savvy and digitally connected, meaning the smartphone and tablet will be key interactive tools for retailers.”
Overall, shoppers may be more optimistic and confident this season, due to the expected tax relief for the middle class, a 19 per cent decrease in gas prices year over year, new and generous federal child tax payments and employment growth.
Meanwhile, the value of the Canadian dollar means less of a drain on sales from cross-border shopping, but higher prices for consumers. As for American Black Friday, Canadian retailers are being urged to use this day to drive December traffic, while focusing on promotions to encourage shoppers to spend their limited budget in Canada.
“While Canadians may have a little more money in their pockets, retailers must realize that ways to engage consumers are multiplying rapidly,” explains Baer. “To thrive in this omni-channel environment, retailers must be quick and agile to deliver the integrated experience consumers want.”
Baer adds that despite online sales growth, brick-and-mortar stores is where the majority of shopping takes place and “retailers need to adopt the right technologies and the right attitude to leverage their real estate if they want to delight consumers.”