COVID-19 drastically shifting how Canadians shop, celebrate, and spend--good news for Amazon

Canadians expect to spend an average of $1,405 this holiday season, compared to $1,706 last year

Key findings

• Overall holiday spending is expected to be down 18% in 2020, with Canadians citing economic concerns, higher food prices, and job loss as major factors in cutting back
  
  
• COVID-19 has accelerated the shift to online shopping, with 47% of consumers saying they've been shopping online more often since the pandemic began
  
  
• Amazon has dethroned the store as the kickoff point for Canadians' shopping journey, as online shopping and Amazon Prime loyalty outweigh the risk of physical stores
  
  
• While consumers still value the in-store shopping experience, 64% cite the risk of exposure to COVID-19 as a reason to avoid stores
  
  
• Canadians love online shopping, but many are reluctant to share personal data with retailers, with 57% stating they'd do it if there was a complete guarantee of safe, secure data capture
  
  
• Although consumer confidence is lower in the country's economic outlook, Canadians are feeling more charitable in 2020, indicating they will be donating more this season
  
  
• Over half of Canadians (51%) are opting to avoid in-home entertaining entirely this year, yet entertaining budgets remain virtually unchanged from 2019

TORONTO, Oct. 20, 2020 /CNW/ - According to Deloitte's 2020 Holiday Retail Outlook, the COVID-19 pandemic—and all the challenges it poses in the upcoming months—is fundamentally changing how Canadians plan to shop and spend this holiday season, which will certainly be unlike any other. Overall holiday spending is expected to drop 18 per cent from last year, while online shopping is gaining traction at an exponential speed, with Amazon taking the biggest slice of the pie.

The ongoing pandemic has directly affected two-thirds (68 per cent) of Canadians this year, casting a cautious shadow over the 2020 holiday season. While many consumers feel relatively secure about their household finances, they are less optimistic about the outlook for the economy, especially as the country prepares for a looming second wave of the pandemic. With this mindset, one in three (35 per cent) plan to cut back on their holiday spending, especially on travel and dining out, but expect to spend more on groceries and cannabis. Overall, Canadians plan to spend an average of $1,405 over the holidays, compared to $1,706 in 2019.

"The pandemic has thrust widespread changes upon the way we live and work at a pace few could have anticipated. Same goes for how Canadians shop, and it's unlikely they will ever return to their old shopping habits," said Marty Weintraub, partner and national Retail leader at Deloitte Canada. "Whether personally affected by COVID-19 or not, consumers are much less optimistic about the country's economy, which will drastically alter how much and where they're going to spend this holiday season. Retailers will undoubtedly see the significant impact of these changing shopping behaviours in the upcoming months."

Canadians love Amazon: online giant ahead of competition

While online shopping has been increasing over the past several years, the global health crisis has significantly accelerated the trend, with 47 per cent of Canadians saying they've been shopping online more often since the pandemic began. Online shopping is set to gain even more traction as a response to COVID-19. This year, consumers expect to spend almost half (44 per cent) of their holiday budgets online, up from 36 per cent in 2019; and 66 per cent claim they'll use Amazon to find and purchase items this holiday season, up from 60 per cent last year—well ahead of both Google (57 per cent, up slightly from 54 per cent in 2019) and bricks-and-mortar stores (53 per cent, down sharply from 69 per cent last year).

Canadian consumers love Amazon. For many, it's where the shopping journey begins—and ends. With just 53 per cent of consumers likely to head to stores to research and buy holiday gifts and other items this year (down from 69 per cent in 2019), Amazon has dethroned the store as the kickoff point for Canadians' shopping journey. While 25 per cent expect to spend the largest proportion of their holiday spending at Amazon this season, Amazon Prime also continues to glean a loyal fan base in Canada, with 35 per cent of Prime members believing their Amazon spending will increase this year compared to 2019.

Bricks-and-mortar losing its luster

Although Canadians are feeling better about their health and safety months after COVID-19 hit¹, they're still changing their shopping habits. While 47 per cent are stating they've been shopping online more often since the start of the pandemic, and 50 per cent avoiding enclosed malls, less than half (43 per cent) of consumers say they prefer to do their holiday shopping in a physical store this holiday season, down from 53 per cent in 2019.

Consumers still value the in-store shopping experience for a number of reasons, such as avoiding shipping costs, interacting with products, and easier returns, but these "pulls" are outweighed by several factors. Though a majority (58 per cent) of Canadians feel retailers have implemented the right precautions during the pandemic, 64 per cent cite the risk of exposure to COVID-19 as a reason to avoid stores, along with crowds and long lines both inside stores and to enter stores in the first place.

"Holiday shopping is not going to be viewed as a fun experience this season, but rather as a task to be completed as quickly, efficiently, and safely as possible," added Weintraub. "For many Canadians, this will simply mean shopping online, but bricks-and-mortar retailers haven't completely lost their attraction. Despite the fast-growing popularity of online shopping, those that can address consumers' concerns around protecting health and safety, and deliver a seamless, personalized, engaging customer experience that goes beyond expectations, will still bring customers in."

Keeping personal data safe: top of mind for Canadians

As online shopping among Canadians continues to rise, consumers should expect to see many retail brands significantly ramp up their digital marketing efforts this holiday season. This attempt to capture consumers' attention and wallet share will also open up new opportunities for Canadians to share their personal data with retailers, which may lead to an increased risk of cyber breaches and data disclosure or theft.

While more than one in three Canadians (37 per cent) report being impacted by a data breach—involving the theft of credit card information, health or personal data, or identity—they seem willing to share personal information with retailers, but under certain circumstances. Here, security is paramount: 57 per cent of consumers say they would be willing to share personal information if there was a complete guarantee of safe, secure data capture, 52 per cent would provide such information only with their explicit consent, and 51 per cent would like assurances their data will not be shared with a third party. Retailers have no other choice than to double their efforts to regain consumers' trust in their ability to keep their personal data safe and secure. Those that meet Canadians' exigencies for data privacy and security stand a much better chance of obtaining the data they need to uncover game-changing insights.

Learn more about the 2020 holiday spending forecast and retail trends here.

^1 Deloitte's State of the Consumer Tracker, August 2020: https://www2.deloitte.com/ca/en/pages/consumer-industrial-products/articles/deloitte-state-of-the-consumer-tracker.html

About the survey
The 2020 holiday retail spending outlook explores the shopping behaviours, attitudes, and preferences retailers need to know about during the upcoming holiday season. The findings are based on a September survey of more than 1,000 Canadian consumers across age groups, financial situations, and geographic regions. All dollar figures quoted are in Canadian currency. 

About Deloitte
Deloitte provides audit and assurance, consulting, financial advisory, risk advisory, tax, and related services to public and private clients spanning multiple industries. Deloitte serves four out of five Fortune Global 500® companies through a globally connected network of member firms in more than 150 countries and territories bringing world-class capabilities, insights, and service to address clients' most complex business challenges. Deloitte LLP, an Ontario limited liability partnership, is the Canadian member firm of Deloitte Touche Tohmatsu Limited. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Our global Purpose is making an impact that matters. At Deloitte Canada, that translates into building a better future by accelerating and expanding access to knowledge. We believe we can achieve this Purpose by living our shared values to lead the way, serve with integrity, take care of each other, foster inclusion, and collaborate for measurable impact.

To learn more about how Deloitte's approximately 312,000 professionals, over 12,000 of whom are part of the Canadian firm, please connect with us on LinkedIn, Twitter, Instagram, or Facebook. 

SOURCE Deloitte & Touche

Marilyne Plouffe, Deloitte Canada, 514-393-5471, [email protected]; Kyle Wyskiel, Deloitte Canada, 416-354-1574, [email protected]