The future of retail is a co-existence of online and offline shopping: Analyst
Retailers haven’t been forced to balance higher supply costs while keeping consumers happy in over 20 years, according to Marty Weintraub, partner and Canada’s national retail leader at Deloitte Canada.
“Retailers, quite frankly, are getting squeezed from both sides, on the input cost side as well as pressure from the consumer to ‘please don't put another burden on our precious dollars,’” Weintraub said in an interview Friday.
“So you’ve got to protect margins and also keep your customers happy at the same time, which is a muscle they've (retailers) never really had to exercise in the last 20 plus years.”
Weintraub added that “retailers haven't had to deal with inflation like this for decades” and many “younger executives in the industry have never faced this in their careers.”
CONSUMERS PLAN TO CUT HOLIDAY SPENDING
Earlier this week, a report and survey by Deloitte Canada found average household spending will fall 17 per cent this holiday season to $1,520.
Of the individuals who plan to cut back on their spending this winter, most say its due to higher food prices (76 per cent), inflation worries (67 per cent) and economic concerns (60 per cent).
The report also found more Canadians are also looking to stretch their dollar this year, whether that’s looking for items on sale (69 per cent), only buying what their family needs (41 per cent) or starting shopping earlier this year (37 per cent).
FUTURE OF RETAIL
While the report found more than half of Canadians (56 per cent) plan to do their holiday shopping in-person, Weintraub said digital sales aren’t going away anytime soon.
“E-commerce is not going away, stores are not going away, the future is quite frankly, a coexistence of online and offline,” he said.
Weintraub added that one opportunity retailers might be missing out on is showing more empathy towards consumers.
“Whether that's more aggressive on promotions, making sure retailers absolutely turn over every rock and eliminate every opportunity for waste or excess costs to sharpen and pass back those savings to the customer,” he said.
“It really boils down to simple basics, you know if you do the right thing, you're (the retailer) going to probably get the right outcome.”
“The findings are based on a national online survey of 1 000 Canadian adults over the period of August 25-30, 2022. The sample is representative of the overall population in terms of age, gender, financial situations, and geography. All dollar figures quoted are in Canadian currency. The margin of error associated with a sample of this size is +/- 3% at the 95 per cent level of confidence. The data is weighted to reflect Canadian demographics.”