With widespread uncertainty, Canadians to spend less this holiday season
Sunday, October 18, 2020 10:29:00 AM
- Canadians to spend an average of CA$1,104 (30.7% decrease from 2019).
- Canadian shoppers expect to spend the same or less this holiday season, with deep cuts in travel spending.
- Online shopping will continue to outweigh in-store purchases, as consumers prioritize convenience, health and safety.
- In-person cross-border shopping will likely be limited, as the rise of the online global shopper is more visible.
- Younger generations continue to be heavily influenced by online and social media advertising, particularly YouTube and Instagram. -
Canadians will spend an average of CA$1,104 for the 2020 holiday season, a net decrease from CA$1,593 (or 30.7%) in 2019, according to PwC Canada's Holiday Outlook report. In a report released today, PwC Canada conducted a survey of 1,000 consumers in Calgary, Montreal, Toronto and Vancouver to find out their shopping plans for the upcoming holiday season.
"Many Canadian consumers and retailers aren't sure what to expect as we approach the 2020 holiday season. This year, the impact and implications of the COVID-19 pandemic are top of mind for consumers. Canadian consumers plan to do more of their shopping online than in stores this holiday season, as they focus on convenience, health and safety, rather than the shopping experience itself. One thing is clear: successful retailers will be those who adapt to our quickly changing business environment and understand what a more digital world means for how they interact with consumers," says Myles Gooding, National Retail Leader, PwC Canada.
A COVID-19 type of holiday
A whopping 86% of Canadian consumers expect to spend the same or less this holiday season, with deep cuts in travel spending. When asked how the pandemic will affect their personal spending capabilities for the holiday season, 57% of respondents said it's had a negative or slightly negative impact. Also, 85% Canadian consumers plan to use their credit card at some point during the holiday season. Among those, 79% of them aren't worried about debt.
Similar to last year, the biggest proportion of holiday spending among respondents as a whole will be on family members. But people will be spending a lot less on themselves (-49%). In 2020, Canadians will spend $630 on gifts (vs. $647 in 2019) , $308 on travel (vs. $743 in 2019), and $166 (vs. $204 in 2019) on entertainment.
Among the generations, Millennials are set to spend the most. When looking at overall holiday shopping, Gen Z (17-24 years old) and Millennials (25-38 years old) plan to spend CA$1,216 on average, compared to CA$1,058 for Gen X (39-53 years old) and Baby Boomers (54-73 years old). This younger group is also much more likely to travel during the holidays.
The new normal : Online shopping will likely outweigh in-store shopping this year
Another major trend accelerated by the pandemic is curbside pick-up, with 33% of shoppers choosing this method for their online purchases, compared to 13% last year. Unchanged from last year is the fact that Gen Z and Millennials are most likely to use this method either regularly or on occasion. When it comes to in-store shopping trends, we're seeing a big generational divide: 60% of those planning to do at least three-quarters of their holiday shopping in stores are aged 55-plus. When it comes to what influences consumer purchases, we're seeing another big generational divide: younger generations are much more likely to be influenced by online and social media advertising.
Virtual borders disappearing as geographical borders tighten
With the current US/Canada border closed, the number of respondents who said they'd consider in-store cross-border shopping is down drastically from last year. But at the same time, we're seeing an increase in online cross-border shopping—a phenomenon we refer to as the rise of the global shopper.