Canadian consumers embracing AI to identify lower-cost alternatives, finds EY survey

While consumers reliance on technology increases, trust stays stagnant

• 71% of respondents are actively using artificial intelligence on e-commerce platforms
• 61% of Canadians bought a product based on an influencer's recommendation or promotion
• 13% increase in number of respondents concerned about ID theft since last year

TORONTO, June 11, 2024 /CNW/ - Traditional territory of the Mississaugas of the Credit, the Anishnabeg, the Chippewa, the Haudenosaunee and the Wendat peoples – As the cost of living continues to rise, Canadians are turning to artificial intelligence (AI) and digital platforms to help make more informed purchasing decisions by identifying cheaper alternatives to costly products and services, according to the latest EY Future Consumer Index.

"We're seeing a shift towards independent consumerism, where people are actively seeking out information, making decisions and taking actions autonomously," says Elliot Morris, EY Canada Grocery and Consumer Packaged Goods Leader. "With that, consumers are becoming more self-directed and tech-savvy in their shopping journeys – leveraging AI to discover savings and create convenience."

AI at the forefront of consumer decisions

While only 18% of Canadians fully understand AI technology, 71% are actively using it on e-commerce platforms, and 61% believe AI will improve online shopping in the future. Trust in AI is also growing, with 61% trusting AI to offer tailored promotions and 53% trusting it to provide purchase reminders – a 6% increase since April 2023.  

"To engage today's consumers effectively, retailers should continue to prioritize the integration of AI technologies," explains Claudiane Boulay, EY Canada Consumer Marketing Leader. "But retailers can't rely on AI alone. Earning a place in their customers' circle of influence requires authentic and trustworthy connections, emphasizing the importance of human touch more than ever."

Trusting peers over brands

Forty-nine percent of respondents who follow an influencer do so because they create content that they find valuable, and 56% do so because they feel that the content reflects similar views to their own, providing consumers with a sense of community.

This trust is translating to purchases. The survey found that 61% of respondents have bought a product based on an influencer's recommendation, while only 21% responded to social media ads. Younger generations, particularly Gen Z (34%) and millennials (39%), are leading this trend.

"Because brands can't dictate influencer messaging, establishing an influencer network that maximizes return on investment will demand a delicate balance between trust and oversight to safeguard brand reputation," suggests Boulay. "That's why selecting influencers aligned with brand values and audience aspirations is crucial to be successful."

Heighted concerns over data security

Recent data breaches and leaks are contributing to the rise of concern about data security. Concerns over ID theft have increased significantly, with 64% of respondents worried about ID theft, up from 51% in April 2023. Additionally, 60% of Canadians are now concerned about data security, marking a 9% increase since April 2023. A further 59% are concerned about the company they share their data with being hacked (up from 45%).

"Data security is paramount for consumer trust," emphasizes Morris. "Companies must be transparent about data use and invest in cybersecurity to reassure consumers and protect their information."

About EY

EY exists to build a better working world, helping create long-term value for clients, people and society and build trust in the capital markets. Enabled by data and technology, diverse EY teams in over 150 countries provide trust through assurance and help clients grow, transform and operate. Working across assurance, consulting, law, strategy, tax and transactions, EY teams ask better questions to find new answers for the complex issues facing our world today.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. Information about how EY collects and uses personal data and a description of the rights individuals have under data protection legislation are available via ey.com/privacy. EY member firms do not practice law where prohibited by local laws.

For more information about our organization, please visit ey.com. Follow us on Twitter @EYCanada.

This news release has been issued by Ernst & Young LLP.

SOURCE EY (Ernst & Young)

Dina Elshurafa, [email protected], 519 697 2694