With the shrinking economy, Canadian shoppers are looking for ways to cut back on spending. But there’s a silver lining for retailers.
According to a new survey by digital offers site RetailMeNot.ca, 73% of Canadians are worried about the state of the economy, and only 31% feel the dollar is going to strengthen before the end of the year.
“The outlook is pretty gloomy in terms of how people are feeling about their finances,” said Kristen Larrea, communications manager at RetailMeNot. “Nearly half (47%) of Canadians are worried about being able to afford all the things they need. So the consumer is definitely feeling the pinch… and this is making people more cost-conscious.”
To save money, 72% of Canadians said they’ll look to buy things on sale; 62% said they’ll limit meals at restaurants and 48% said they’ll look for coupons and promo codes.
The good news for retailers is that as the dollar plummets, so do cross-border shopping trips. In the survey, 66% of respondents said cross-border shopping is no longer worth it because of the money lost on the exchange rate. And 59% of Canadians feel online shopping on U.S. sites is a wash now the Canadian dollar is down.
“This is a huge opportunity for Canadian retailers—you have a captive audience,” said Larrea. “[Retailers should] recognize this as an opportunity to win back some of that market share and re-engage consumers who maybe have been shopping elsewhere.”
In fact, the survey found 63% of Canadians would rather visit cities in their own country than travel to the U.S. due to the state of the dollar.
The low loonie is also an opportunity to entice Americans to travel and shop in Canada. “I think we’re definitely going to see a boost in travel and tourism because of the favourability of the exchange rate,” said Larrea. “Where there’s some losses, other industries will definitely see a boost.”
With the huge buying periods of back-to-school and the holidays approaching, Larrea suggested retailers give consumers incentives to shop. Sales and discounts are one way, but it’s not just about saving consumers money. “I think loyalty programs are going to be huge this year because if you’re not able to offer a sale, you can offer a creative incentive or a personalized experience via a loyalty program,” said Larrea. “There has to be some sort of value add.”