Canada State of Retail and eCommerce Market Report 2024
£ 3,695 (Excl.Tax)
Report Summary
eCommerce continues to establish itself, as online shopping frequency increases; however, consumers aren’t actually making more of their purchases online. That highlights how eCommerce is being integrated into the broader retail landscape, but isn’t overtaking the importance of in-store shopping.
The retail market’s performance has been steady, but flat. In a touch-and-go economy, consumers aren’t feeling financially comfortable enough to increase spending.
That means digital tech and eCommerce are increasingly important complements to in-store shopping. The result is an opportunity for retailers to leverage new innovations to make shopping easier or more affordable. The threat is for those that don’t evolve and watch as competitors pass them by with tools that resonate with today’s shoppers.
This report looks at the following areas:
- An overview of the current retail market and the Canadian economy
- The role of online shopping in retail, and how it has changed in recent years
- The factors that motivate shoppers to choose an in-store or online retailer
- Differences in online (including laptops/PC vs mobile device) and in-store purchases by category
- The evolution of retail, including new innovations and the circular economy
- How consumers want to interact with retailers
- How shoppers are paying for their purchases – including credit, debit and cash, as well as mobile wallets and BNPL
The retail industry is stable, but flat. Value and convenience remain paramount, but retailers must also innovate to avoid getting left behind.
Scott Stewart, Associate Director, Lifestyles & Retail
Table of Contents
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Executive Summary
- What you need to know
- What consumers want and why
- Market predictions
- Opportunities
-
The Market
- Market context
- Remote work is here to stay, but only for a small share of workers
- Graph 1: working location, 2022-23
- Market drivers
- The Canadian economy remains a balancing act
- Inflation settles to 2.5% in July 2024
- Graph 2: Consumer Price Index 12 month % change, 2019-24
- Basic costs put pressure on other retail categories
- Graph 3: shelter, 2021-24
- Inflation expectations are softening, but still high
- Graph 4: expected inflation rate in one year, 2014-24
- Disposable household income is climbing steadily
- Graph 5: year-to-year % change in total household disposable income, 2014-23
- Graph 6: household disposable income, 2013-23
- But consumers don't feel like they have more disposable income
- Graph 7: healthy, 2022-24
- Higher earners are benefitting the most
- Graph 8: gap between top two and bottom two income quintiles in Q1, 2020-24
- What this means for retail: not all shoppers are benefitting from market trends
- Market size
- Retail sales have flattened at $66 billion monthly
- Graph 9: total retail sales, 2019-24
- eCommerce sales remain below COVID-19 peak
- Graph 10: retail eCommerce sales, 2019-24
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Consumer Insights
- Consumer fast facts
- Consumer fast facts (continued)
- Online shopping frequency and share
- Consumers are shopping online more often
- Online shopping frequency is on the rise
- Graph 11: online shopping frequency, 2021 vs 2024
- Most purchases are still done inside a store
- Graph 12: proportion of purchases that are made online, 2024
- Two potential reasons for the discrepancy between frequency and share
- Online shopping is growing, but in-store remains fundamental to retail
- Online shopping is more common among younger groups
- Graph 13: online shopping frequency, by generation, 2024
- Remote workers are more frequent online shoppers
- Graph 14: online shopping frequency, by working location, 2024
- Those remote workers are also more dependent on online shopping
- Graph 15: proportion of purchases that are made online, by working location, 2024
- Retailers could also combine remote work with in-store shopping
- Parents are another group that depends on online shopping
- Graph 16: more than half of all purchases are done online, by parental status and age of children in household, 2024
- Gen Z shows how in-store shopping is still relevant
- Graph 17: proportion of purchases that are made online, by generation, 2024
- Evolving the in-store experience for younger generations
- Content creation can be as simple as recording a trip to the store
- Online shopping is increasing, but in-store remains pivotal
- How consumers choose where to shop online
- Shipping is top of mind for online shoppers
- Graph 18: most important factors when choosing where to shop online, 2024
- Shipping costs are a major barrier for online shoppers
- Free shipping and returns are a tool for tight budgets
- Graph 19: most important factors when choosing where to shop online, by financial situation compared to a year ago, 2024
- Graph 20: most important factors when choosing where to shop online, by employment status, 2024
- Value retailers are in the spotlight
- Old Navy offers free shipping and free returns
- Retailers targeting older consumers need to ensure data security
- Graph 21: most important factors when choosing where to shop online – data security, by generation, 2024
- Heavier online shoppers care about sustainability and easy customer service
- Graph 22: most important factors when choosing where to shop online, by online shopping's share of total purchases, 2024
- Graph 23: most important factors when choosing where to shop online, by online shopping frequency, 2024
- Millennials are the most concerned about sustainable shipping
- Graph 24: most important factors when choosing where to shop online – sustainable shipping, by generation, 2024
- Sustainable shipping's positive effect has a ceiling
- There are simple ways to make shipping more sustainable
- Focus on the basics first, then use differentiators to stand out
- How consumers choose where to shop in person
- Loyalty programs help drive in-store visits
- Graph 25: most important factors when choosing where to shop in-store, 2024
- Why the importance of loyalty varies between online and in-store
- Younger consumers aren't swayed by loyalty programs
- Graph 26: most important factors when choosing where to shop in-store – offers loyalty points/rewards, by generation, 2024
- Newer Canadians are also looking past loyalty programs
- Graph 27: most important factors when choosing where to shop in-store – offers loyalty points/rewards, newer vs established Canadians, 2024
- Loyalty programs are a budgeting tool
- Graph 28: most important factors when choosing where to shop in-store – offers loyalty points/rewards, by financial situation vs a year ago, 2024
- The message needs to be "loyalty = savings"
- Store amenities are of varying importance across generations
- Graph 29: most important factors when choosing where to shop in-store – checkouts, by generation, 2024
- Graph 30: most important factors when choosing where to shop in-store – parking and transit, by generation, 2024
- Newer Canadians appreciate public transit options more than others
- Using a public transit hub to promote samples
- Gen Z is more influenced by self-checkout than staffed checkout
- Younger shoppers want apps with utility
- Graph 31: most important factors when choosing where to shop in-store – websites and apps, by generation, 2024
- IKEA's app makes trips to the store more efficient
- Find a target, then prioritize their priorities
- Loyalty programs
- Nearly all consumers use loyalty programs
- Graph 32: loyalty programs regularly participated in, 2024
- Scene's gain is Air Miles' loss
- Loyalty programs skew to older consumers
- Graph 33: loyalty programs regularly participated in, by age, 2024
- Newer Canadians are also underdeveloped
- Graph 34: loyalty programs regularly participated in, newer vs established Canadians, 2024
- Two birds with one stone: setting up a credit card and loyalty account
- Triangle Select is a case study in paid membership
- In the US, Target is also rolling out a paid membership tier
- Triangle Select shows how a paid program can succeed with a target
- Graph 35: regularly use Triangle Select, by age, gender and parental status, 2024
- Loyalty programs are increasingly seamless
- A fragmented loyalty program market is here to stay
- Where consumers shop for different categories
- Grocery and mass merchandise stores drive in-person visits
- Graph 36: categories purchased in-store in the past 12 months, 2024
- Formulating marketing strategies at a category level
- Clothing is a major online shopping category
- Graph 37: categories purchased online using a laptop/computer in the past 12 months, 2024
- Graph 38: categories purchased online using a smartphone in the past 12 months, 2024
- 25-54s are the most likely to shop on their phones
- Graph 39: categories purchased online using a smartphone in the past 12 months, 18-24 vs 25-44, 2024
- Smartphone shopping isn't ideal, but it can be the best option
- Smartphone shopping as a time-saving tool
- Smartphone shopping can actually offer unique capabilities
- Fully remote workers aren't buying as much in stores
- Graph 40: categories purchased in-store in the past 12 months, by working location, 2024
- Amazon's Daily Essentials are useful for remote workers
- Be prepared to evolve ecommerce strategies
- Innovations in retail and ecommerce
- There is no shortage of innovation in retail
- Graph 41: experience with and interest in shopping innovations – in-store, 2024
- Graph 42: experience with and interest in shopping innovations – online, 2024
- Shoppers are interested in leveraging their phones in-store
- Graph 43: any interest (NET) in shopping innovations – in-store, 2024
- Retailers targeting Gen Zs and Millennials need these tools
- Graph 44: any interest (NET) in shopping innovations – in-store, by generation, 2024
- These innovations should also be prioritized by retailers targeting men
- Graph 45: any interest (NET) in shopping innovations – in-store, by gender, 2024
- The online shopping experience is evolving, too
- Graph 46: any interest (NET) in shopping innovations – online, 2024
- Lowes is combining virtual reality with in-store shopping
- Younger shoppers and men are interested in online innovations
- Graph 47: any interest (NET) in shopping innovations – online, by gender, 2024
- Graph 48: any interest (NET) in shopping innovations – online, by generation, 2024
- Shoppers have a supercomputer in their pocket – so use it
- The circular economy
- Consumers fuel the secondhand market
- Graph 49: experience with and interest in the circular economy, 2024
- Higher income consumers can be a target
- Graph 50: any interest (NET) in circular economy, by household income, 2024
- It takes a long-term vision to capitalize on these trends
- Younger shoppers are interested in the secondhand market
- Graph 51: any interest (NET) in circular economy, by generation, 2024
- Brands can help make the circular economy cool
- IHG Hotels & Resorts is lending its guests stylish clothing
- Getting involved in the circular economy
- How shoppers want assistance from brands and retailers
- Shoppers want in-person support, but there’s a shift to digital connections
- In-person support is preferred, but not by much
- Graph 52: preferred channels/methods for getting assistance from brands/retailers, 2024
- There's a shift towards text-based support
- Graph 53: preferred channels/methods for getting assistance from brands/retailers, by generation, 2024
- Younger generations prefer chat to phone calls
- Graph 54: "I would rather use online chat with a customer service rep than call them on the phone" – agree, by generation, 2023
- A common theme: seamless, multitasking and at the customer's pace
- Newer Canadians prefer text-based options
- Graph 55: preferred channels/methods for getting assistance from brands/retailers, newer vs established Canadians, 2024
- Text-based channels often depend on chat bots
- Online shoppers want text-based customer support
- Graph 56: preferred channels/methods for getting assistance from brands/retailers, by online shopping frequency, 2024
- Email support is tried and true
- Offer a range of communication options for shoppers
- Payment methods used while shopping
- Most Canadians shop with a credit card
- Graph 57: payment methods used while shopping, 2024
- It's getting easier for retailers to accept contactless payment
- Cash has lost relevance among all generations
- Graph 58: payment methods used while shopping, by generation, 2024
- The allure of credit cards is clear
- Credit cards offer convenience and rewards
- Credit cards aren't always attainable
- Graph 59: payment methods used while shopping, by household income, 2024
- Payments are getting more and more seamless
- Younger generations are driving the shift to more digital payments
- Graph 60: payment methods used while shopping, by generation, 2024
- Buy now, pay later could influence purchase decisions
- Parents and students are the most likely to use BNPL
- Graph 61: payment methods used while shopping – BNPL, by parental and student status, 2024
- BNPL is relevant for online shoppers
- It's all just dollars and cents, but the method is changing
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Competitive Strategies
- Launch activity and innovation
- Eaton Centre's Queen Cross raises the bar for mall food courts
- Mountain Equipment Company's shop-in-shop expands footprint
- Shopping at Walmart in Roblox
- Virtual eCommerce isn't limited to retailers – brands can do it too
- Google's Gemini AI is making it easier to find the products consumers want
- Retail media networks create a new avenue for advertisers – and revenue for retailers
- Marketing and advertising
- Best Buy refreshes their branding
- IKEA uses a unique pop-up to promote its sleep solutions
- Opportunities
- Evolution is pivotal to survival
- In summary: key implications and recommendations
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Appendix
- Consumer research methodology
- Consumer research questions
- Consumer research questions: crosstabs and curated questions
- Consumer qualitative research
- Generations
- Abbreviations and terms
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