Consumers say price is the top factor impacting their purchase decisions with many hunting for deals online yet preferring to buy in-store finds a new KPMG in Canada report
TORONTO, April 15, 2025 /CNW/ - Despite the rise in online retail during the pandemic, it's clear that the death of the physical location had been exaggerated, with six in 10 Canadians still mostly shopping at brick-and-mortar stores and finding the online shopping experience frustrating, according to a new KPMG in Canada report.
The report is based on a survey of 1,522 Canadians about their retail shopping habits and found that the type of product being purchased heavily influences whether consumers decide to buy in-store or online. Most respondents said they prefer to buy electronics and clothing online, while opting to shop in-store for auto supplies, health products, and groceries.
"While we do expect e-commerce popularity to grow, we're seeing a shift in retail trends post pandemic where what's old is new again," says Kostya Polyakov, Partner and National Consumer and Retail Leader at KPMG in Canada. "But not all trends will be permanent across the industry. The recent retail failures underscore the importance of knowing the market and your customers. Our survey found 85 per cent of Canadians identified price as the number one factor that influences their buying decisions. They hunt for the best prices online before deciding to purchase but still want to touch and feel the merchandise. This is why it's essential for retailers to take an omnichannel approach so they can connect with consumers no matter where and when they want to shop."
The KPMG report finds Canadians like a deal, with 57 per cent saying that finding a good discount is far more likely to motivate them than brand loyalty, and across most retail categories – groceries to home improvement and clothing -- people are using digital platforms to compare prices.
Though they use digital platforms to research merchandise, Canadians remain frustrated when purchasing online because of products not matching descriptions, inconvenient return processes and shipping delays, the report points out.
Product availability and the ability to compare prices ranked high as features that would make Canadians more likely to shop online, the report says. Eighty-six per cent of consumers say they are more likely to choose retailers that effectively manage inventory and minimize out of stock items and eight in 10 feel it's extremely or very important for retailers to have a reliable stock of products they frequently purchase.
"Regardless of what they sell, businesses need to meet customer expectations for always having certain products in stock. For example, if a customer is stopping by a sporting goods store for some hockey tape, they would expect that to always be in stock, as opposed to a specific size and width of hockey skates which may need to be ordered. Consumers' buying behaviours are influenced by their expectations of the stores they plan on visiting," says Mr. Polyakov. "Retailers who can meet this expectation and communicate accurate inventory levels with their customers will get ahead of the competition."
Katie Bolla, Partner, Customer Practice at KPMG in Canada, says loyalty programs are a great way for retailers to gain insights into customer behaviour and product demand.
"The reason retailers create loyalty programs is to really understand their customer's buying behaviours and patterns," says Ms. Bolla. "This allows them to plan their promotional and personalized marketing campaigns, product innovation and operational planning. Our recent survey shows most consumers are price conscious, so designing loyalty programs to better build connections and suitable offers is even more important."
While nine in 10 consumers say they are a member of a retail loyalty program and 92 per cent agree loyalty programs influence their decision to shop at a particular retailer, nearly 50 per cent are uncomfortable with retailers sharing data about shopping habits to improve inventory management.
This highlights a significant concern among Canadians regarding data privacy with more than 90 per cent saying they are concerned retailers aren't doing enough to protect their information from cyber criminals and they should be more transparent in how they protect and store customer data.
Despite these worries, poll findings show that consumers still want retailers to use data, especially when it comes to empowering their workforce. Many respondents view technology as a solution with 78 per cent agreeing that their shopping experience would improve if staff were equipped with data-driven tools.
"Our survey found that 90 per cent of consumers return to stores where they've received service from knowledgeable staff. To stay competitive, it's critical that retailers improve the interactions between their employees and customers by providing staff with the information they need to succeed," says Ms. Bolla. "A little technology can go a long way in accomplishing this. Front-line workers who have a tablet integrated with real-time inventory, customer or product data can better assist shoppers with the personalized help they are looking for."
Key survey highlights:
- 61 per cent of 1,522 Canadians surveyed say they mostly shop at brick-and-mortar stores
- 57 per cent say they are frustrated with the online shopping experience (e.g., either the product is not what was advertised or returning merchandise is inconvenient or costs too much)
- 85 per cent rank price as the top factor that influences their purchasing decisions
- 57 per cent say "hunt for deals (e.g., comparison shopping, do more research)" best describes their shopping behaviour
- 35 per cent say the primary reason they make a purchase in-store is the ability to try on or test products
- 26 per cent say the primary reason they make a purchase in-store is the speed of getting the product (i.e., no shipping)
- 16 per cent say the primary reason they make a purchase in-store is the instant gratification of getting to take the product home immediately
- 86 per cent say they are more likely to choose retailers that effectively manage inventory and minimize stockouts (employees have access to real-time or up-to-date inventory data)
- 79 per cent say it's extremely or very important that retailers have a reliable stock of products they frequently purchase
- 90 per cent say they are a member of a retail loyalty program
- 92 per cent say loyalty programs are influential in their decision to shop at a particular retailer
- 49 per cent say they are uncomfortable with retailers sharing data about their shopping habits to improve inventory management
- 91 per cent say they are concerned retailers aren't doing enough to protect their personal and financial information from cyber criminals
- 78 per cent agree that their shopping experience would improve if staff were equipped with data-driven tools, such as inventory management, customer feedback tools, loyalty program information, and digital chat bots
- 90 per cent say they would return to a store where they've received exceptional service from knowledgeable staff
About KPMG in Canada's Consumer & Retail survey
KPMG in Canada surveyed 1,522 Canadian adults about their shopping preferences and behaviours from Dec. 27, 2024, to Jan. 10, 2025, on Sago's AskingCanadians panel, using its Methodify online automated platform. Fifty-five per cent of the respondents are men and 45 per cent are women. The respondents are ages 18 to over 65 and have a household income of $100,000 to $149,000 (19 per cent), $50,000 to $74,999 (17 per cent), $75,000 to $99,999 (16 per cent) or $25,000 to $49,999 (12 per cent). The margin of error is +/- 3.1 percentage points at a confidence level of 95 per cent.
About KPMG in Canada
KPMG LLP, a limited liability partnership, is a full-service Audit, Tax and Advisory firm owned and operated by Canadians. For over 150 years, our professionals have provided consulting, accounting, auditing, and tax services to Canadians, inspiring confidence, empowering change, and driving innovation. Guided by our core values of Integrity, Excellence, Courage, Together, For Better, KPMG employs more than 10,000 people in over 40 locations across Canada, serving private- and public-sector clients. KPMG is consistently ranked one of Canada's top employers and one of the best places to work in the country.
The firm is established under the laws of Ontario and is a member of KPMG's global organization of independent member firms affiliated with KPMG International, a private English company limited by guarantee. Each KPMG firm is a legally distinct and separate entity and describes itself as such. For more information, see kpmg.com/ca.
For media inquiries:
Alannah Page
National Communications and Media Relations
KPMG in Canada
(306) 934-6255
[email protected]
SOURCE KPMG LLP
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