American Express Canada's Canadian Retail Insights Report finds 85 per cent of retailers have optimistic financial outlook about the next 12 months
MARKHAM, ON, April 30, 2012 /CNW/ - Financial optimism dominates the outlooks of the majority of Canadian retailers, according to the inaugural Canadian Retail Insights Report, a study conducted on behalf of American Express Canada. Surveying decision makers in the Gas, Grocery, Pharmacy, Restaurant, Fast Food, Apparel, General Retail and Big Box businesses, the Report focuses on what's top of mind for Canadian merchants, including industry and business outlook; challenges and pain points; growth strategy; customer loyalty; competition and strategies for attracting customers.
Despite the turbulent economic climate of the past few years, the Insights Report reveals 85 per cent of Canadian retailers consider their financial outlook to be positive for the next 12 months, with Apparel (95%), Fast Food (94%) and Gas (85%) being the most optimistic. Not only are these merchants feeling good about the next year, nearly two thirds (64%) indicated they are not worried about the state of their business over the next 12 months. Merchants are also optimistic about their industries' financial outlook (80%), with the one exception: the Drug Store/Pharmacy sector, where nearly half (44%) indicate a negative financial outlook for the industry.
"Retail - in all its forms - is often portrayed to be in crisis. What we're seeing in this Report is merchants are more optimistic than anyone might have imagined," said Colin Temple, Vice President and General Manager of Merchant Services, American Express Canada.
Retailers focus on attracting new customers
The optimistic outlook among businesses can be attributed to the fact that more than half (52%) of those surveyed say their sales have grown compared to this time last year, crediting this growth to attracting new customers (72%) and offering new products (56%).
Across verticals, the study found that strategies to attract new customers differed. For example, 70 per cent of respondents in Restaurants, 61 per cent in Fast Food and 58 per cent of Apparel said they plan to use social media to attract new customers - all much higher percentages than the other sectors polled (average 52%). Further, 39 per cent of Apparel retailers plan greater investment in e-commerce this year, and 57 per cent of Drug Store/Pharmacy respondents plan to do more marketing and advertising this year.
"While some growth tactics vary across sectors, the research found there are many similarities between such disparate verticals," said Temple. "Significantly, Canadian merchants across the board share a realization that putting the focus on the customer needs to be a top priority and is critical to attracting and retaining customers."
Service and loyalty help retailers battle increased competition
The Report reveals that Canadian merchants, regardless of sector, see a customer demand for excellent service, with 98 per cent of those surveyed revealing customers' expectations are higher than ever. And with competition heating up in nearly every vertical - 88 per cent say their target customer has more options than ever before - 94 per cent indicated they are placing a focus on providing better customer service to stand out from the crowd.
This focus on customer service is vital for all sectors as nearly every respondent (99%) believes customer loyalty is driven through excellent customer service, and customer loyalty is imperative to their business (95%).
Besides making investments to improve customer service, merchants plan to drive customer loyalty by focusing on sales and discounts (78%) and expanding product offerings (66%). Despite plans to provide new product offerings, most retailers don't anticipate they will open new locations within their current market (52%), new Canadian markets (48%) or internationally (68%).
"With two-thirds of those we spoke with telling us it's harder than ever to keep a customer, and nearly every sector looking for innovative ways to attract and retain customers, insight into purchasing behaviour is more important than ever," said Temple. "With competition intensifying, merchants can't rely on intuition or luck to find the silver bullet to keep customers coming back. Rather, they need a firm understanding of what resonates with those who shop at their businesses - and what will appeal to those who don't."
Other interesting findings
By sector, the following are the biggest pain points for Canadian merchants:
- Drug Store/Pharmacy: Increasing Revenue (21%)
- Gas: Rising cost of doing business (28%)
- Grocery: Rising cost of doing business (31%)
- Restaurant: Rising cost of doing business (35%)
- Fast Food: Attracting new customers (29%)
- Apparel: Attracting new customers (26%)
- General Retail: Attracting new customers (22%)
- Big Box: Increased competition (28%)
About the American Express Retail Insights Report
The American Express Retail Insights Report was conducted by Harris/Decima from March 16th to April 3rd, 2012 with a sample of 375 Canadian businesses from the drug store/pharmacy, gas, grocery, restaurant, fast food, apparel, and general retail sectors. The margin of error for the total sample is +/-5.1%, 19 times out of 20.
About American Express Merchant Services
American Express in Canada operates as Amex Bank of Canada and Amex Canada Inc. Both are wholly owned subsidiaries of the New York based American Express Travel Related Services Company, Inc., the largest operating unit of the American Express Company. Amex Bank of Canada is the issuer of American Express charge and credit cards, with outstanding products like the American Express(r) Gold Rewards Card, and the American Express(r) AeroplanPlus(r) Gold Card. Amex Canada Inc. operates the Corporate Travel and Travellers Cheques divisions in Canada. American Express opened its first offices in Toronto and Hamilton in 1853 and now employs 3,700 Canadians coast-to-coast. For more information, visit AmericanExpress.ca or connect with us at Facebook.com/AmericanExpressCanada.
For further information:
or a full copy of the report, please contact:
Kate Weersink, (416) 644-2241
April Brown, (416) 644-1793