Forging a frictionless pre-purchase journey for Canadian consumers

Our latest Global Consumer Insights Survey shows Canadian shoppers performing a balancing act. On one hand, consumers want to get out and shop: 83% say their in-store shopping will rise or remain the same over the coming months. An even higher percentage (91%) say the same about online shopping.

But we also see Canadians shifting their shopping priorities and making cautious spending plans. Consumers collectively expect only small net spending increases in most discretionary product categories.

With this discerning outlook in mind, we examined several influences affecting consumers’ purchasing decisions. We looked at how technology is reshaping the ways in which consumers research products, interact with brands and try new shopping models.

Our report draws on insights from our spring 2023 survey of more than 500 Canadian consumers and thousands more around the world. The results show how retailers and consumer goods companies can remove points of friction to create a seamless consumer decision journey—from search to consideration to purchase and, ultimately, retention.

Our survey examined the digital influences on consumers’ purchasing decisions. Asked to rank their top sources of pre-purchase information, Canadian consumers cited search engines (60%), Amazon (48%) and retailers’ websites (40%) in higher numbers than their global peers (see chart).

Interestingly, Canadian consumers are less likely to research products on social media. Just 23% ranked it among their top three responses, compared to 31% globally. But that difference disappears among the youngest respondents in our survey: Canadian Gen Z consumers are more likely to research products on social media than their peers in other countries (45%, compared to 43% globally and 40% in the US).

These results show the importance of search engine optimization, informative websites and social media marketing in removing friction from a consumer's pre-purchase journey. But effectively using these platforms to attract and retain customers requires a deep understanding of your consumer, including their personal shopping habits and purchasing preferences.

This imperative also appears elsewhere in our survey. When asked about influential forms of advertising, consumers were most likely to cite ads that link them directly to offers and promotions from their favourite brands and products. More than a third (35%) of Canadian respondents mentioned this marketing tactic, consistent with consumers globally (37%). But Canadian shoppers were more likely than their global peers to say they’re influenced by personalized email advertisements (28%, versus 21%).

Retailers and consumer goods companies that combine customer data, analytics technology and industry insights develop a powerful understanding of their customers that goes beyond socio-demographic characteristics. This lets you reach consumers with greater precision and provide personalized information that helps them make purchasing decisions.

Our survey data contained a surprising finding: those consumers most likely to increase their spending on premium products and clothing don’t resemble traditional luxury shoppers. They’re relatively young (85% are under the age of 45), with somewhat modest earnings (80% have an annual household income of less than $100,000).

These upmarket consumers may not have the same budget as wealthier and more established luxury shoppers. But their desire to buy premium products to treat themselves, keep up with trends or simply own higher-quality items represents a potential growth area for retailers with upmarket offerings.

Against this backdrop, we looked at the factors that motivate consumers to buy premium products. Unsurprisingly, respondents commonly mentioned the exclusivity of premium brands, which was cited by 19% of consumers. But at the same time, 34% would spend more on premium products that are easier to purchase, such as through different channels.

That may seem counterintuitive at first, especially since many luxury retailers are focused on becoming more—not less—exclusive. But our data shows that upmarket consumers are trailblazers when it comes to engaging brands in new ways. They’re more likely than the average Canadian consumer to research products on social media (35% versus 23%) and use the metaverse (54% compared to 26% overall). Specifically, nearly a quarter (23%) purchased a product after testing it or browsing virtual stores in the metaverse, compared to 7% of all Canadian consumers. And 19% bought a physical luxury product after viewing it digitally in the metaverse (compared to 5% overall).

It’s not clear if the metaverse will live up to its hype. It has yet to catch hold with most Canadian consumers. But business activity in the metaverse is intensifying. PwC’s strategy+business publication recently explored how companies can create real-world value in the metaverse. Here’s where they suggest you start.

• Dive in and explore: Assign at least one person or team to understand key metaverse concepts and the next generation of social media platforms.

• Lay the foundation: Recruit digital-native employees already at home with the metaverse and integrate them with existing teams.

• Make your play: Lower-risk opportunities include engaging consumers in new ways on social media, selling digital versions of physical goods and offering tours of virtual products. Leasing or buying digital real estate in the metaverse for advertising, sales or customer support are higher-risk gambles.

Selling through retailers is, and will continue to be, an important sales channel for consumer goods companies. But many of these businesses also covet the opportunity to sell straight to shoppers. It avoids the complexity of working with retailers and establishes a direct relationship with customers.

Consumers also see the appeal: 63% have purchased a product directly from a brand’s website. And there’s opportunity for growth. An additional 29% of respondents have considered buying straight from a brand, but haven’t yet made a purchase.

These Canadian results are consistent with our global findings. But the reasons Canadian consumers buy directly from brands are different. They’re motivated by better stock availability (a top-three response of 52% of Canadian consumers, compared to 43% globally) and more competitive prices (49% versus 43%).

Consumer goods companies looking at this direct-to-consumer opportunity often encounter questions of scale. Put simply, shipping a pallet of products to a retailer is logistically easier than sending individual products to customers.

Selling through subscriptions is one way to overcome this challenge. And we see room for subscription growth. Nearly a third (31%) of Canadian consumers buy at least one item through a subscription service. But for many of those products, the number of consumers planning to start a subscription is nearly double that of active subscribers.

Canadian consumers are most interested in subscribing to health and well-being products, such as supplements, with 18% saying they plan to start a subscription (on top of the 8% who subscribe now). That’s followed by household groceries such as fruit and vegetable boxes or meal kits, with 17% interested and 8% currently subscribing, and tea and coffee, with 15% interested and 8% currently subscribing.

These products share common attributes: they’re staple products that are consumed daily in the same quantity. This predictability makes a subscription more appealing for consumer goods companies and customers alike. We drilled down deeper and asked subscription shoppers why they use this service. Canadian consumers were more likely than their global peers to say it’s cost-effective (59%, versus 47%) or convenient (56%, versus 51%).

Paradoxically, the top reason Canadian consumers cancel subscriptions is that it’s too expensive, a perception cited by 51% of former subscribers. Nearly three in 10 (29%) also mentioned unexpected or increasing fees—something separate research shows has an outsized impact on consumer trust.

Consumers in our 2023 Trust Survey highlighted small and personal events, including a lack of transparency experienced through hidden fees, for example, as issues that erode their trust. By contrast, executives in our survey were more likely to focus on large-scale, headline-grabbing events such as security, legal or compliance issues. This disconnect underscores the importance for retail and consumer goods leaders to scrutinize their customers’ purchasing journey and pick out overlooked points of friction.

A human-led, tech-powered approach to frictionless retail

Technology is changing consumers’ pre-purchase journeys. Companies that harness the power of AI, data analytics and consumer engagement platforms can create a frictionless retail experience that attracts and retains customers.

Combining these powerful technologies with business insights lets you give consumers the personalized product information they need to make purchasing decisions. This helps you build trust with consumers in ways that earns their sustained loyalty.