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The holiday season is an important time to boost the bottom line for retail businesses.

But just how much consumers are spending this year is hard to pin down, says Brad Davis, a retired Associate Professor at Wilfrid Laurier University’s Lazaridis School of Business and Economics, who specializes in consumer behaviour and trends.

According to the Retail Council of Canada (RCC) and Leger, this year average holiday spending was expected to be around $972, which is up $74 or eight per cent from the 2023 holiday season. Meanwhile, PwC Canada says Canadian consumers were planning to spend an average of $1,853 on gifts, travel, and entertainment this holiday season, a 13% increase over last year.

Shoppers, it seems, are adopting more strategic behaviours when it comes to gift giving. With inflation still impacting prices, an Angus Reid Group study indicates that 71% of Canadians are budgeting carefully, seeking promotions, and comparing options extensively.

Black Friday and Cyber Week have remained key shopping periods, with many delaying purchases to capitalize on discounts.

“The last few years I've taught I've been kind of really disparaging about spending surveys and I think you see so many of them where the results say one thing and then the actual behaviour is totally different,” says Brad. “I think we've created this environment where there's kind of a disconnect between immediate gratification of purchase and then the actual feeling of having spent money you don't see until the credit card bill arrives.”

That same Angus Reid Group survey, conducted from Oct. 15-21 from among approximately 1,500 Canadians 18 and older, also indicates at least 46% of holiday shoppers were planning to spend less this year. 

Sustainability and quality key factors

Sustainability and quality are also playing a significant role in purchasing decisions this year. Shoppers increasingly prefer high-quality, longer-lasting items and even second-hand products. For retailers, offering compelling loyalty programs and promoting ethical practices could further attract this value-driven demographic.​

Brad says while the holiday shopping season is an important time for many businesses, planning for the long term has also become a priority.

“You’ve got the sales now and the cash flow, but there is so much stuff going on with artificial intelligence and the relationship between online and bricks and mortar stores,” he says. “There’s that balance between being very reactive to what’s happening now and not compromising what you’re going to have to do for that long-term adjustment to current changes. I think many are still dealing with kind of a post-COVID restructuring.”

According to the Angus Reid Group, 26% of Canadians were planning to do most of their holiday shopping in-store this year, while 34% will do the majority online. With half (48%) of small businesses finding it harder to compete with the rise of online giants.

Survey results show Ontarians are leading nationwide in online shopping, with 41% of their holiday budget spent digitally, balancing this with the tactile experience of in-store shopping​, something Brad says is hard to define for many retailers.

“Every retail space has presumably different consumer experience expectations,” he says, adding the term ‘customer experience’ is the mantra retail experts often tout. “But when you have so much traditional retail stuff or a customer experience which is designed to create that kind of more spontaneous or in-store decision making, how do you balance that with online?”

By focusing on value, engaging promotions, and omnichannel excellence, experts say Ontario retailers and businesses should be maximizing their potential this holiday season.

Some key spending drivers this holiday season:

Consumer spending growth: Rising disposable incomes, particularly among millennials and Gen Z, are fueling higher expenditure on gifts, travel, and entertainment​.

Preference for online shopping: Retailers with robust digital platforms and promotions, especially during key events like Black Friday and Cyber Week, are poised for success​.

In-store experience matters: While online shopping grows, 62% of Canadians still value the tactile experience of in-store shopping. For Ontario retailers, curating an engaging, festive in-store atmosphere could capture the attention of consumers seeking the traditional holiday shopping experience​.

Strategic shopping and sustainability: Items like clothing, home essentials, and gift cards dominate wish lists. Retailers offering eco-friendly options or emphasizing value-driven strategies are likely to resonate with shoppers​.

Impact of promotions and loyalty programs: Businesses offering early deals, compelling promotions, and customer-centric loyalty programs will stand out during this competitive season​.

Challenges facing Ontario businesses:

Economic uncertainty: While economic indicators are improving, the lingering effects of inflation mean that consumers remain cautious. Retailers need to balance pricing strategies carefully to attract budget-conscious shoppers without eroding profit margins​.

Supply chain and inventory management: Ensuring adequate inventory while avoiding overstock is critical. Supply chain disruptions seen in previous years underline the importance of proactive planning​.

Diverse consumer preferences: Businesses must cater to a broad range of consumer priorities, from those seeking traditional gifts to those favoring experiences or sustainable options. Flexibility and adaptability will be key​.

Since the late 2000s, Black Friday has become a retail staple in Canada surpassing the traditional Boxing Day sales as the most popular annual sale in this country.

Initially, the term ‘Black Friday’ can be traced back to 1869 when two Wall Street financiers attempted to purchase all of America’s gold to pump up its value. Their play for the gold failed, however, the term stuck and eventually more than 100 years later became associated with sales when retailers began noting they were ‘in the black’ as soon as Christmas shopping started.

“It has become another one of those consumer ritual occasions and from a buyer/retailer perspective it is now a key point on the calendar we all start to strategize for leading up to and following,” says Brad Davis, Associate Professor at Wilfrid Laurier University’s Lazaridis School of Business and Economics, who specializes in consumer behaviour and trends.

However, despite the ‘ritual’ aspect of shopping on Black Friday (Nov. 25) and Cyber Monday (Nov. 28), experts expect sales this year won’t be as brisk as in years past.

“Most of the signs indicate kind of a suppression of general sales for Black Friday and Cyber Monday,” says Brad, adding sales in 2021 were down by about 7% compared to the previous year. “I think last year we had this post pandemic burst of saved money and a desire by consumers to let loose. But it’s sort of settling back now into more normalcy because people have got it out of their systems.”

Factor in supply chain issues and the cost of inflation affecting consumers’ decisions, and Brad says the outcome could hold some surprises.

“There’s a lot of interesting question marks about consumers’ mood and are they going to be naturally a little more reticent to do impulse purchases because of inflation, rising prices and just general worry,” he says. “However, the flipside of that is anything that states: ‘regular retail on sale’ and consumers respond to it. They may be more susceptible to respond to that kind of pitch because they are worried about rising prices and think this is an opportunity to get stuff ‘at a deal’.”

Brick-and-mortar stores versus online shopping

“We saw online sales trending up before the pandemic and I’ve always said the pandemic and the response to it didn’t change anything, it just dramatically sped up existing trends,” says Brad, noting how much more ‘comfortable’ people are with ordering online for many items.

Not surprisingly in 2020 when things were locked down, Black Friday sales grew by 31% compared to pre-pandemic 2019 levels. And even with stores being reopened in 2021, Black Friday and Cyber Monday ecommerce sales still rose by 11.9% the whole month of November.

“Cyber Monday was actually starting to encroach, if not beat, Black Friday anyway before the pandemic in terms of popularity,” says Brad, adding the concepts of ‘Black Friday Month’ or ‘Cyber Monday Week’ have become more of reality now that larger retailers like Amazon and Target have implemented earlier sales.

However, when it comes to in-person shopping he says the tactile experience of going into a store remains a social exercise many consumers will continue to crave.

“We are still, by nature, two million old hunters and gatherers. We just do it in malls now,” jokes Brad. “I think we’re always going to have the need for physical retail.”

Supply chain and demand

Fear of shipping delays last year prompted many consumers to start their holiday shopping earlier on, and experts believe that has continued this year fueled by soaring gas prices plus global shipping complications.

Anecdotally, Brad says he’s heard that some categories of electronics are now very difficult for retailers to have in their inventory in effort to pull off some of the major deals they once offered on Black Friday.

“If you can’t physically get the stuff, what is that going to do if you want provide longer hours at your store?”

At the same time, he says some retailers may have higher volumes of inventory they are trying to clear out.

“You may not be seeing deals across the board anymore but instead, seeing a weird patchwork effect of deals going on as a direct reflection of what we have been going through,” says Brad.

Advice for business owners

When it comes to navigating Black Friday and Cyber Monday, Brad urges business owners to not get caught up in the ‘hype’ surrounding these shopping events.

“Make sure you do your due diligence and make sure you are making smart decisions and not just for that day, but a period of time,” he says, explaining trying to clear out too much inventory may lead to cashflow trouble down the line as consumers stock up on items and wait several months before spending again. “Don’t get caught up in the hype. You need to sit down and rationally look at the numbers to see if you need to clear out that inventory.”

* With files from the National Post and Calashock Commerce

The Cambridge Chamber of Commerce has a brand-new online look.

The Chamber’s new website offers visitors a fresh and vivid digital experience as they access information on the many learning programs, incentives and events we offer that benefit our local business community.

“We’re thrilled to be able to offer a new site that is easy to navigate and still provides our Members with the valuable information they’ve come to expect,” says Chamber President and CEO Greg Durocher.

With a click of a button on the home page or from the ‘events’ page, Members will be able to easily access and manage their own accounts using a simple username system. They will not only be able to update their profiles to add or delete employees but will also be able to pay bills online.

“This feature will be a huge benefit to our Members and streamline our operation so we can concentrate on what we do best: helping businesses grow and prosper,” says Durocher.

The site itself is much brighter and colourful and contains fewer links which in turn will make using it a far more engaging experience for visitors.

As well, a new mobile site is included which means much clearer access on all digital devices.

“We have no doubt users will find this feature a huge bonus,” says Durocher, noting how much communication is conducted on smartphones.  “It’s important for all businesses to adapt to the latest trends.”

REM Web Solutions Extends 10% Discount to Chamber Members on New Projects

The Cambridge Chamber of Commerce is proud to announce our latest Affinity Program, where our members can receive a benefit through the collective buying power. Recently through the graciousness of one of our members, the Cambridge Chamber had its website overhauled and revamped (www.cambridgechamber.com) and we couldn’t be happier with the results, nor could we have achieved it without the great support from REM Web Solutions (www.remwebsolutions.com).

"All I can say is WOW!"  Both to the results of a number of months of work from my staff and Rob Matlow's, but even more of a Wow for the fact that he was able to make this financially achievable.  REM Web Solutions works with hundreds of companies and organizations creating websites that are fully customer manageable. One of the absolute musts for our Chamber was to have it fully accessible to my staff, so that changes could be made on our schedule and that new information could be added at a moment’s notice, easily and exact. REM Web Solutions has an incredible back end product that makes it easy for anyone to use. It's flexible and so expandable.

REM Web Solutions Inc. was founded in 2001 and is a full service Web Professional Services Firm based in Waterloo Region.   REM found that many businesses were paying high costs to have their website maintained and had no control over their website content.  REM developed WebWiz@rd to give small to medium sized companies the ability maintain their own website content with only basic computer skills

REM’s employees have many years’ experience developing solutions for the web and understand what it takes to establish a successful online presence.  They worked with over 800 customers across North America. REM also has experience working with not-for-profit organizations and associations.

A finished website does not mean that REM’s relationship with their client is over.  Every member of REM’s team is 100% focused on building lasting relationships with their clients.  Only a phone call or e-mail away, REM offers the best technical support possible.

Other Affinity Programs Available through Your Membership with the Cambridge Chamber

The Chamber has a number of other Affinity Programs that bring a distinct buying power advantage to their Members, pricing that simply isn’t available to most businesses. Our Group Benefits program is probably our signature piece with over 300 member businesses on the program, and offers full coverage, including dental and extended health benefits at prices that simply aren’t available to the average business.

We have great program for Visa, MasterCard and debit card transactions through First Data, where the rates are at least half of what a business can normally get. Bulk buying helps us help our members to get affordable services, it is simply a must and our Merchant program with First Data has help businesses survive because the fees are so low. 

The Chamber of Commerce also offers a Group Retirement Program called Chamber Pension Plan (CPP),  photocopier program with Information Network Systems (INS) in Waterloo. Home phone and internet program through Worldline that simply can’t be beat. Discount with Dignity Memorial on funeral services as well as a host of other Chamber Perks offering our members and their employees discounts. .

Check out all the Chamber’s Affinity and Member to Member discount programs.

Our Affinity Programs are predominantly from LOCAL providers, Chamber Members helping Chamber Members, we’re so proud of them, they really make the benefit of being a Chamber Member one of the most valuable assets we have.