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The holiday shopping season has begun, and retailers are hoping for the best despite the fact consumer indicators have been painting a less than perfect picture of the weeks to come. In fact, according to Deloitte Canada’s 2023 Holiday Retail Outlook, Canadians are expected to spend at least $1,300 over the holidays representing an 11% drop from last year. 

But how these dire predictions will affect them in 2024 remains to be seen.

“I think in 2024 retailers will be facing an awful lot of pressure on inventory management and cashflows just because of the interest rate problems,” says Brad Davis, Associate Professor at Wilfrid Laurier University’s Lazaridis School of Business and Economics, who specializes in consumer behaviour and trends. “I think retailers are going to have a real deal seeking consumer base who are going to want deals, and that again cuts into their margins and can play havoc with inventory turnover.”

He says like the past couple of years, effective retail management will be required noting that consumers, in general, don’t really pay attention to consumer indicators.

“We’re not very good a judging what is a good deal or what is good value,” says Brad, noting that many consumers are very susceptible to perceived ‘sales’. “We have this whole apparatus that is designed to stimulate impulse purchasing.”

To encourage more in-store shopping, which has been facing turmoil as anti-theft measures and store closures detract from the customer experience, retail experts insist consumers must be provided exclusive products and deals or fun, and experiences they can’t find online. 

However, Brad says the true definition of what that special ‘customer experience’ is can be hard to pinpoint.

“Experts can never seem to quite define what this is,” he jokes, adding a positive in-store environment with expediated delivery and payments, and return policies should play a role. “We used to just call it good customer service. But for most consumers, when you talk to them about what they think is a good experience it’s ‘Can I find stuff easy?’, ‘I want to be able to check in and out fast’, ‘I don’t want salespeople bugging me unless I need help’. It’s sort of fairly basic.”

He says customer mapping is also something to consider, noting that online searching can lead consumers to physical stores. Industry experts often refer to the omnichannel approach where consumers may start their search in one place and make their purchase in another and encourage retailers in 2024 to learn where their audience is discovering products and where they are buying them.

“There is still a huge social component of shopping in a mall, particularly with younger generations,” says Brad, noting that humans still crave that ‘tactile’ physical encounter. “You have a generation of young people who is always going to gravitate to that sense of immediate gratification.”

He says the key for retailers going forward is to remain flexible in their approach to conducting business.

“Something that worked before and got you where you are now does not mean it’s going to get you where you need to go next,” says Brad. “Things are just happening so fast in multiple directions, and you have to be open to rethink and revisit what you thought was truth before.”

Released this past fall, the 6th annual RCC X Leger Holiday Shopping Survey from Retail Council of Canada (RCC) unveils the evolving shopping patterns of more than 2,500 Canadians: 

A few findings:

• Savvy Shopping in Spotlight: Economic apprehensions, including inflation and rising living costs, weigh on many. Accordingly, 88% (vs 83% in 2022) of Canadians are turning to proactive holiday shopping tactics, most notably hunting for sales (52%), preparing in advance (41%), and adhering to a precise budget (40%).
• Retailer Selection: To help shoppers decide which retailers to buy from this year, Canadians are prioritizing holiday sales/promotions (66%) and free shipping (55%). They are also looking for in-store exclusives (48%) and distinct online promotions (60%) to provide additional value.
• Shopping Experiences Enhancers: In-store shopping will benefit from value bundles (26%) and product sampling (25%). Conversely, online shopping will be amplified by unique product offers and extended return policies, both at 33%.
• Lead Spending Categories: Clothing emerges as 2023’s frontrunner, constituting 17% of the holiday budget, followed closely by home entertainment and essentials like food and alcohol grabbing 16% of the planned spend. 
• More Gift Cards:  45% of shoppers are leaning towards purchasing gift cards for others this season, with a notable 37% of Canadians (up from 32% last year) expressing a preference for receiving gift cards over traditional presents. Dining gift cards top the charts (42%), while big-box retailers come in at 33% and food outlets register at 27%.
• Local Shopping Upswing: Supporting local businesses this holiday has seen an increase in intent, with 82% of Canadians accentuating its importance, a leap from 74% last year.

Source: Canada News Wire

Our Chamber of Commerce over the years has not only learned how to pivot, but how to address the concerns, issues and needs of the small and medium-sized businesses in our community.

The events of the last few years have only strengthened our reason for being. We not only champion small and medium-sized businesses but are a source of information, guidance, and the most powerful connector there is.

We have now taken that connection to a new level thanks to ‘The Link’, a place where YOU, an SME business owner/manager can source solutions in a one-stop shop atmosphere. And since this is Small Business Week (Oct. 15-21), it's very important to always remember and celebrate the contributions SMEs make to our economy.

For the last seven months, our Chamber has undertaken this huge project (for us). To say we’re excited is a dramatic understatement because for you, we’ve invested and created an exciting, inspirational space that will not only knock your socks off but provide a place where you can share your troubles and find connections to help you navigate those issues that sometimes surface for every business.

At The Link you can source HR solutions, legal forms and information, access grant writing, and discover business services of all types that help you streamline, or even eliminate operational costs, and yes, of course, we also have direct access to financial resources only for business.

Another aspect to this renovation project is the creation of additional meeting spaces. We can now offer two boardrooms, one that can seat more than 20 and the other between eight and 10, plus a more informal meeting space for five and a private soundproof meeting “pod” also for up to five people. As well, have casual conversation areas and provide a wonderful coffee service.

The Link is modern, accessible, and a great place to have a coffee and share conversation all contained in little over 2,220-square-feet of prime real estate at Highway 401 and Hespeler Road.

Along with this incredibly cool and unique space comes some unbeatable programming to help you and your team get onside, get ramped up, and get excited for what comes next.

Programming at The Link has already been released and space is very limited, so you need to get in early and make sure there is a seat for you. Our Program Manager, (Amrita Gill), is already developing new and different ways for us to connect with meaning, with passion, and as always, with inspiring ideas.

The doors opened Oct. 1 and we already have some committed entities ready to set up shop at The Link, but there may still be room for you and your organization. Do you serve only small and medium-sized business? If so, send me a note and maybe, if all the checkmarks are in place, we may just have a spot for you at The Link, but you need to hurry. Yes, there is a cost because we are not a “funded” organization and our support comes from our membership.

Speaking of membership, did you know the Cambridge Chamber of Commerce has NOT increased its membership fees in more than 25 years? Talk about an inflation stopper, wow! That is what serving business means to us. We will always find ways to support you and now we are looking for your support to continue the work we do.

So please share your expertise with us and book a pod at The Link, or come in and get help from organizations and businesses that are here for you. Even better, drop in and enjoy a coffee, latte, cappuccino, espresso, or my personal favourite, a mochaccino. Hey, I might even buy you one. See you soon at The Link, 750 Hespeler Rd., the Cambridge Chamber of Commerce.

While COVID-19 has created a uniquely difficult situation for Ontario’s municipalities, it has also exposed areas to improve municipal fiscal governance.

Local governments do not have the fiscal autonomy they need to make them competitive and maintaining the status quo could be devastating for communities in a post-COVID economic recovery. The impact of the virus and the resultant public health measures have meant that most municipalities are seeing a decline in revenue and increase in expenditures.

In response, as all levels of government look to balance debt and deficits while protecting the well-being of our communities, the Ontario Chamber of Commerce (OCC) released its latest report, Better Budgets: Bolstering the Fiscal Resilience of Ontario’s Municipalities, which identifies 14 recommendations for both the Province and municipalities which can bring immediate and long-term relief to communities across Ontario.

“Municipalities in Ontario are facing a triple threat this year: an ongoing pandemic that has been devastating to local economies, reduced revenue from closed or limited services, and increased spending on public health and human services. The Financial Accountability Office estimates the pandemic will collectively cost municipalities $2.7 billion in 2021, on top of the expected $4.1 billion impact of 2020,” said Cambridge Chamber of Commerce President & CEO Greg Durocher. “In Budget 2021, the Government of Ontario committed to a long‐term economic growth plan. It is imperative public policymakers do everything they can do to ensure communities like ours do not get left behind in recovery.”

During the June 28 edition of our Chamber Chat, Cambridge City Manager David Calder and CFO Sheryl Ayres took a closer at the report and provided some great insight on the merits and viability of some of these recommendations, while identifying misconceptions relating to others.

“I commend the Ontario Chamber of Commerce on their work on Better Budgets,” said David, adding the report contained some ‘old chestnuts’ municipalities having been trying to change for many years when it comes managing finances. “It’s a good variety. Some we can support and some that might not be as supportable.”

Greg said for many years there has been ongoing discussion centred on the ‘restrictiveness’ of municipalities’ ability to raise revenue, noting changes are clearly needed, especially when it comes to Ontario’s property tax system.

“We have to undue to the system so to speak and make sure taxes are applied appropriately,” he said.

Sheryl agreed the current property tax system, which has been in place since the 1990s, is need of a full review.

“In doing that, they also need to look at other revenue tools that municipalities can use in addition to property taxes,” she said, noting that 91% of tax dollars go to the Provincial and Federal governments, leaving the remainder for municipalities. “Yet, we’ve got the greatest portion of expenses related to the assets that we own, and we are closer to the people in terms of the local services we provide. I believe we need a comprehensive review of the whole tax system and how it’s allocated across three levels of government, ensuring there is transparency and equity in how the funds are raised from the residents of Canada.”

David said the downloading of services to municipalities is an important issue that needs to be addressed.

“We need to review who should be providing what services and whether there are ways to be more cost efficient in the supply of those services,” he said. “It’s a very complex conversation but one that needs to take place.”

David said municipalities have been looking for ways to be more autonomous for many years in effort to make better decisions at the local level.

“We’ve got to figure out where do we want to be in that spectrum,” he said. “There needs to be discussion around trying to make sure we control our delivery a little bit where appropriate.”

The OCC report agrees and states the Ontario’s post-pandemic recovery and long-term success will depend heavily on unleashing the economic potential of its municipalities.

“Given that local governments in Ontario cannot run budget deficits, their current options for fiscal sustainability are limited to tax increases, service cuts, and the use of reserves,” said Claudia Dessanti, Senior Manager, Policy of the OCC. “Now is the time for municipalities and the province to explore alternative means of achieving fiscal sustainability.”

Key recommendations outlined in the report include:

Undertake a comprehensive and forward-looking review of Ontario’s property tax system to ensure the system is more equitable, efficient, and predictable for businesses.

Adhere to the ‘pay-for-say principle’ to ensure that all responsibilities are accompanied by adequate funding.

Enhance and incentivize regional collaboration across municipalities.  

The OCC report was created in partnership with KPMG Canada. Read the report.