BDC’s 5 consumer trends to watch
October 21, 2013 | Deborah Aarts for Profit | Comments
Today’s consumers have the world at their disposal. They have more choice at more price points available to be purchased in more ways than ever before. Discerning their exact wants and needs is tricky business – especially for SMEs.
The Business Development Bank of Canada (BDC) recently set out to learn what trends, if any, most define Canadian shoppers now. The result is a research report called Mapping Your Future Growth: Five Game-Changing Consumer Trends, which maps out the main forces driving buying behaviour, based on a survey of 1,023 Canadians in August of this year.
The report reveals a consumer base that is complex, highly educated and at times contradictory in its demands. “Consumers are different now,” Pierre Cléroux, BDC’s chief economist, told Profit. “They attach value to different things.”
Details, details, details
“70% of consumers trust consumer opinions posted online.”
Canadian shoppers are very web-savvy. That’s nothing new. But what is new is that they’re carrying high expectations for the websites they visit. The bare-bones “here’s our address, here’s our hours” web approach used by so many small and independent Canadian storefronts isn’t going to wow them. Indeed, according to the BDC report, “the underdeveloped online Canadian retail presence offers substantial opportunities for SMEs.”
Consumers aren’t necessarily looking for bells and whistles in retail websites, so you can park those Flash graphics and background music away. They simply want an easy-to-navigate interface with lots of detailed information about products, including specs, photos and, crucially, customer reviews. “Reviews have become one of the most trusted sources of information for consumers,” says Cléroux. Obviously, good reviews are helpful. But even bad reviews can engage customers, provided you’ve demonstrated that your company has responded to them. In today’s transparent web culture, probably the worst thing you can do is not include any reviews at all, because it suggests that you might have something to hide, explains Cléroux.
Health (or the promise of it)
“The average Canadian spends $935 on health and wellness every year.”
Perhaps it’s because the population is aging; perhaps it’s because people are more informed than ever, but today’s consumers have high ideals when it comes to wellbeing. They’re hungry for products and services that they perceive as promoting wellness and vitality. Think: fresh food, non-toxic cleaners, active vacations.
While Cléroux acknowledges that we’re a long way off from a land of total virtue—”you’ll still be selling chocolate bars, that’s for sure”—the trend is enough to warrant your attention. That’s because nearly one-third of buyers—31%, to be exact—are willing to pay a premium for things that improve their health. Want to target this cohort? Don’t necessarily look to the affluent. Across the country, the willingness to shell out extra for health was highest (36%) among those with a household income of between $40,000 and $60,000. For those raking in more than $100,000, that figure is only 29%.
“66% if Canadians have made an effort to buy local or Canadian-made products recently.”
Is protectionism back? Not quite, but shoppers in Canada are increasingly looking for products that were made and/or conceived of here. It’s a backlash to the saturation of cheap, made-in-China products on store shelves in recent years, says Cléroux; the average consumer now feels that made-in-Canada products are of better quality and more sustainable. “People are more and more conscious about the environment; they’re more aware of the importance of corporate social responsibility,” Cléroux explains. “They are translating their concern into a desire to buy more locally-made products.”
“Allowing consumers to customize products leads to an average order increase of 20%.”
In Canada, individuality is having a moment. “Consumers today are looking to be different,” says Cléroux. “They want products made specifically for them, that meet their specific needs. Today’s buyer doesn’t want the same t-shirt as everyone else has; they want a shirt that perfectly fits their measurements, or that boasts an individual message, or that comes in a colour that perfectly complements their aesthetic.
That means adjusting the consumer economy from one of high-volume, mass manufacturing to customizable, smaller-batch production. It’s a big shift, acknowledges Cléroux, but it’s something that has become much more feasible, thanks to such technology as 3D printing and sophisticated on-demand ordering software: “There’s great potential there, because as technology progresses it’s more and more possible for companies to offer customizable offerings.”
“More than 80% of online group-coupon users use a business for the first time because of the coupon.”
While there are key pockets in which buyers will happily spend away, the average consumer is still on the hunt for a deal—and expects it from retailers. “This trend is not easy for businesses to manage,” admits Cléroux. “People want everything. But over the past five years Canadian revenue hasn’t increased much at all. And the debt level is at a historic high. Consumers are not really in a great position in terms of having a lot of money to spend. They’re looking for ways to get deals.”
According to Cléroux, two of the best ways to appeal to this stingy mindset are to offer coupons (though he warns that these “aren’t great for every business—you have to be careful”) or to let buyers rent and/or share your wares.
While none of these five trends are necessarily new, they are attaining enough critical mass to affect all consumer-facing companies, says Cléroux. “If you want to be successful today, you have to think of these trends and how you can innovate – or adjust your products – to meet them.”
The full BDC report is available here.