TORONTO, Oct. 31, 2013 /CNW Telbec/ - While economic uncertainty
persists at home and abroad, Canadian holiday retail sales are expected
to grow 3.5% over last year, supported primarily by online commerce, EY
"Retail sales were inconsistent this year. Still, the most recent sales
results, bolstered by stronger consumer confidence and the promise of
stable interest rates, are generating some cautious optimism in the
short term," says Daniel Baer EY Partner and National Retail and
Consumer Products Industry Leader. "That said, retailers are grappling
not only with modest sales growth, but increasing competition and an
unprecedented pace and intensity of tech-driven change. Consumers are
expecting more, especially during the busiest shopping season of the
year - the way a retailer responds will have a big impact on its
EY's recent Americas' Retail Quarterly Report supports that, showing 70% of Canadians research products online before
buying. Of those who research online, 58% say they then buy a product.
Although Canadians still trail American consumers in adopting
e-commerce overall, retailers here must carefully evaluate how these
shifting trends will affect their client base. That means assessing
everything from loyalty programs to digital wallets. More and more,
retailers need to evolve from a physical location where products are
sold, to a comprehensive provider of knowledge, insight, convenience
All that said, Baer notes, "While technology is definitely transforming
the retail landscape, consumers remain conservative and focused on
price. Online customers are even more price-sensitive and interested in
promotions than their traditional consumer counterparts."
Retailers are expected to use a number of strategies to make the most of
this holiday shopping season, including deep discounts coinciding with
American Black Friday promotions, free and faster shipping, better
omni-channel delivery, a shift to digital advertising, improved use of
social media, flexible returns, and better websites for tablet users.
Retailers are also expected to respond to spotty consumer confidence by
adapting inventory and promotions to the different spending trends
across the country:
The three Prairie provinces will continue to show the strongest sales
results, with strength in Alberta continuing.
Sales in British Columbia will improve over last year, but are expected
to remain below the national average.
Results in Ontario will continue to improve and be in line with the
average national increase.
Soft sales are expected in Atlantic Canada.
Previously-noted softness in Quebec appears to have worsened for
retailers there. With concerns around economic growth in Quebec, sales
will continue to lag behind this year.
In terms of product popularity, clothing, electronics and jewelry should
enjoy a fair piece of the spending pie. Expected new product releases
for tablets and smart phones will help drive traffic, which will in
turn drive higher volume in these categories, if not higher dollar
sales. Gift cards will also remain a popular choice.
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SOURCE: ERNST & YOUNG
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