Have you seen The Customer Experience Factbook?

In this 180+ page report, you'll find all the information and support you need to build a profitable, effective CX Improvement Program that spans every part of your business. You'll be able to implement and manage meaningful and profitable change, and grow your bottom line despite a slowing economy.

Get it on Amazon (Kindle/Print)

Consumers' digital habits drive big changes in retail

Canadian retailers are stepping up to the challenge

"Technological disruption has fundamentally changed the retail experience, but many Canadian retailers are still playing catch up," warns Willy Kruh, Consumer and Retail National Leader, High Growth Markets, KPMG in Canada and Global Chair for Consumer Markets. "Retailers today not only have to compete with fierce e-commerce competitors, including large global platform companies, but also respond to rapidly shifting shopping expectations driven by new technologies and demographic changes. Recognition is only half-way to doing something, and too many Canadian retailers are not keeping pace with the fact that consumers and their shopping habits are undergoing a sea-change."

E-commerce adoption on the rise
KPMG's forthcoming 'Me, My Life, My Wallet' report, a multi-dimensional study of consumers in the digital era, shows that an increasing number of Canadian shoppers are turning to online channels, led by the fast-growing Gen Y and Z demographics. While e-commerce adoption in Canada lags other developed countries, Canadians' buying habits are evolving and they are gradually migrating online, driven by the growing need for convenience and personalization.

Kruh explains, "Traditional retailers are facing an urgent choice: be relevant or go out of business as pressure mounts in the face of innovative online, omni-channel and specialty competitors. Canadian retailers who fail to respond to this rapidly changing environment are likely to face dire choices, including store closures."

E-commerce share of retail sales in Canada is expected to grow year-over-year, but is still less than 10% of overall retail. An increasing number of retailers are responding by using technology to improve the customer experience either through innovative in-store experiences, artificial intelligence, online channels, loyalty programs or tech-enabled touch points. However Canadian consumers are slower to adopt digital commerce than their counterparts in the U.S., the UK and Europe.

The Rise of Generation Y
Millennials will soon be the world's largest single demographic grouping and they are already the largest generation in the Canadian workforce. Close to four in 10 Millennials live with their parents, and these parents are closer to their kids than any generation before. The merging of these two huge cohorts is reshaping retailing in Canada.

"Millennials tend to be very tech savvy and that is rubbing off on their Boomer parents," says Kruh. "This is accelerating the shift to online and experience-based shopping, but still too many Canadian retailers are stuck in a Boomer mentality."

Big data needs a big re-think
Data has transformed the consumer and retail sector as sophisticated analytics and an openness to big data can help organizations with their digital transformation strategies. Analytics can give fresh insight into everything from store location to product selection and, crucially, the cost to serve a customer.

However, Canadian consumers are among the least trusting in the world with their personal data. More than 30% of Canadians surveyed would not trade their data for anything; 54% are anxious about identity theft; 46% are concerned about the unauthorized tracking of their online habits; and 63% do not trust behaviourally-tracked ads. Tellingly, only 6% of Canadian consumers trust retailers with their data, among the lowest ranked industries.

"Companies must begin to appreciate that the modern customer is highly aware of the worst ways in which their data can be misused," noted Kruh. "From hacking to unwarranted tracked advertising, customer are rightly worried. Transparency and better communication will go a long way to reassuring customers that their data is in safe hands and that it is being used in their benefit. Every business needs to think hard about how to use data responsibly to build deeper insights and relationships with their customers. And they have to know that if they don't, their competitors will."

The case for bricks-and-mortar
The majority (71%) of Canadian consumers surveyed believed that brick-and-mortar stores will not disappear. Half of consumers surveyed in Canada across four demographic groups do a mix of online and brick-and-mortar shopping, and most still have a positive view of traditional malls and grocery stores, in particular. Food, clothing and household goods, for example, were noted as items that consumers prefer to purchase in-store, as well as those purchased most frequently.

"Many retailers will have to right-size their portfolio of stores, but they are also planning new business models or re-evaluating the in-store experience to offer hybrid experiences for customers," added Kruh. "Retailers must have a clear understanding of where and how they're investing so they can fully benefit from the connected-customer approach. Only then will they be able to deliver what consumers want."

A number of companies that started solely online are now beginning to introduce physical "showrooms" to offer virtual-physical experiences for customers. For instance, some players in the grocery space are eyeing even more locations in the years to come. Indeed, retail companies are developing new business models, or rethink existing ones, in direct responses to the "new normal" in the shopping world.

"Amid disruption from the Amazons of the world, retailers should focus on creating value and innovating on the links between online and physical shopping," says Kruh. "Every business needs to think hard about how to cater to what customers find relevant and enhance their overall experience. Today, consumers are most keen on digital experiences that improve and complement the physical environment around them."

Lured by discounts?
Brands are also increasingly treating social media as a sales platform, a move that reflects the growing importance of social media in e-commerce. Yet a sizeable segment (42%) of Canadians surveyed did not find a brand's social media presence important, higher than their global counterparts (29%) surveyed in the same study. If they were to engage with a brand on social media, however, about half (48%) of Canadians surveyed said they would respond positively if they were offered a deal or discounts.

"One of the biggest Canadian shopper segment is Generation Y parents looking to stretch the family budget. The most likely route to persuading them to hand over their personal data is to offer deals and better experience in exchange," concluded Kruh.

Have you seen The Customer Experience Factbook?

In this 180+ page report, you'll find all the information and support you need to build a profitable, effective CX Improvement Program that spans every part of your business.

You'll be able to implement and manage meaningful and profitable change, and grow your bottom line despite a slowing economy. Grab this goldmine of easily adaptable and up-to-date strategies, walk-throughs, trends, technologies, research, suppliers and partners, plus all the supporting arguments you need to build a solid CX strategy.

While most marketers could list maybe a dozen key points for improving their brand's Customer Experience (CX), the researchers and writers at The Marketing Factbook have identified FORTY main 'CX Keys' which will help you drive your customers to new levels of delight, loyalty, advocacy and profitability.

The areas in which customers have direct contact with your organization are perhaps the most obvious places in which CX improvements can be made, and this report addresses all 24 of these 'Direct CX Keys', applicable to offline and online businesses alike.

At the same time there are many other areas that indirectly affect CX (such as the supply chain, policies and processes) in which every business can make simple but far-reaching improvements. This report guides you through the problems and solutions for all 16 of these 'Indirect CX Keys', many of which are often forgotten or under-played even in the best CX strategies.

Get it on Amazon (Kindle/Print)