Over the past decade, the Canadian consumer has been propping up the Canadian economy. In a ridiculously low interest rate environment, we have been borrowing, spending and accumulating at rates that were unprecedented and unsustainable. Sadly, the day of reckoning has come for so many families living close to the margin as unemployment rises.
This is an important insight for retailers as many consumers have shut their wallets for approximately nine weeks.
Going forward, the feel-good factor of retail therapy could be replaced with the feel-good cushion of an emergency fund.
Here are five signs the retail landscape is shifting and what retailers might want to consider.
- After over a month of being in a relative retail freeze, we have come to realize the difference between what we want and what we need. We have also come to realize we have more than enough stuff and haven't missed the so called shopping experience.
- Many Canadians are living close to the margin and don't have a lot of wiggle room should some sort of financial emergency arise. The roof could leak, the car could break down when you least expect it, and many have already have lost their jobs. The importance of having an emergency fund worth three-to-six months of living expenses in cash, or near-cash equivalents like a GIC, is going to be far more satisfying than a new pair of shoes.
- Health is the new wealth. What’s good for your body has to be good for everything else. Sustainability is the theme that is gaining in momentum from process to end product. Living through the recent pandemic we don't need a lot of stuff –we need time. What we value has changed.
- There is an renewed emphasis on buying local, buying Canadian and buying quality. There is a growing recognition small businesses have been slammed and consumers want to support their communities and the people who work there.
- Cleanliness is a must. Self-checkout or touches payment options are a must. Hand sanitizes need to be everywhere. Fear is still very much present and as consumers go into a retail outlet that has recently re-opened for business that fear just doesn't disappear overnight. Retailers need to find ways to create a calming and safe environment.
I reached out to Calvin Carter, CEO of digital transformation consultancy Bottle Rocket, for his thoughts on the retail landscape and here is what he had to say.
“As we start to enter a post-COVID-19 era, brands will need to find new and innovative ways to re-attract lost audiences and compete with the likes of Amazon, Target and Walmart,” he said in an email.
“The consumer will have the final say, so retailers are best-advised to centre all their thinking around what the consumer wants right now.”