It’s no secret that Canadian consumers have started spending less in 2022.
It’s also no secret that this trend looks like it will continue into 2023.
Whether you’re unsure what this means for you, or looking to close or relocate your store amidst the financial uncertainty of the next year, we can help.
We’re Silverman Consulting And Retail Services, a retail store closing consultant Canada.
Let’s take a look at what the consumer spending downturn could mean for your store, and what you can do to help your store survive.
What’s Causing Canadian Consumers To Spend Less?
For many Canadians, the financial impacts of the COVID19 pandemic are still being felt.
We’ve all been hearing the word “recession” being used quite a bit recently, and this is making Canadian consumers feel anxious about the future.
Canadian consumers are feeling both inflationary pressure and economic uncertainty coming into the holiday season, which will impact spending across many industries.
Additionally, Canadians have been exposed to a lot of negative news in the past year, including things like high inflation, rising interest, new diseases, economic uncertainty, and even geopolitical upheaval.
How Do Canadians Feel About The Coming Year?
It seems that Canadian’s are feeling pessimistic about the coming year and are ready to hold onto their money, rather than spending it.
About half of Canadians are expecting the economy to get worse in 2023.
About 40% of Canadians have also had worsening household finances in the past year.
How Are Canadian Spending Habits Predicted To Change?
Despite the pessimism about the upcoming year, more Canadian consumers are looking to pursue in store shopping for the holiday season than last year.
Those that will shop in store plan to visit more stores than reported last year, although not quite as many as average during pre pandemic years.
Those are both good signs when it comes to getting customers to come back to your retail store.
However, it is anticipated that holiday spending will fall this year and Canadians will be more likely to shop early and hunt for deals.
Additionally, Canadians are going to be more likely to shop online this year than in previous years.
Because Canadians are more likely to shop around for deals this year, it also means that they’ll be willing to find substitutes for preferred brands if they’re cheaper or if what they want is out of stock.
That means you’ll need to be prepared to recognize and convert this different type of retail shopper – the bargain hunter – moreso than usual.
How Can Your Retail Store Survive?
With all these changes in consumer spending, it may start to feel like it’s impossible for your business to survive.
However, there are a few strategies you can put in place to keep customers shopping with you and to maintain customer loyalty and support, without changing your prices.
1. Connect With Your Customers
It’s important to create moments of shared intimacy with your customers to improve their shopping experience.
Customers want to know that your store and employees understand and relate to them.
It’s what keeps them coming back.
So what might this look like in your store?
Recommendations are one of the best ways for you and your staff to connect with your customers.
Recommending items based on what your customer is shopping for or what they’ve purchased is a way to show that you understand your customer and know what they might like.
It also shows your customers that you’re more focused on helping them find what they need, rather than selling to them for the sake of selling.
2. Resist The Urge To Discount Everything
While the uncertainty around money for many Canadians may make you feel like you need to offer discounts to encourage purchases and retain customers, this isn’t always necessary.
Instead of discounting everything, you should focus on offering the right items for your customer in your store.
Why?
Well, discounting may ensure that you make a sale in the moment, but if you don’t have the right items, it may not ensure customer retention.
This means, while your customers may buy something when they’re at your store, they also might not come back.
Providing discounts across your store decreases your ability to stock a variety of items.
It can also decrease your ability to have as many staff as you need to provide a good customer experience.
So, rather than focusing on trying to compete with prices, focus on trying to compete by making a customer experience great.
3. Make Gentle Suggestions
Making gentle suggestions to your customers is an important way to alter people’s behaviour in ways that benefit your store.
Online stores have the algorithms to suggest this – can you train your staff to do this too?
One example of this is when you select an item on amazon it always suggests “other people who looked at this item also looked at _____.”
This gently guides the customer on how to respond, without outright telling them how to choose.
It also helps by suggesting accompanying items like batteries that may be required, or ink cartridges for a printer, etc.
In store you can train your staff to know the inventory and great accompanying items. In a jewellery store, if a customer is buying earrings, there may be a matching pendent, be sure to show it as well.
In a retail environment, you may remerchandise your store by displaying certain items together to suggest how well they complement each other.
This guides your customer in the right direction without forcing them to purchase more products.
No matter what kind of establishment you operate, subtlety is the most important factor in this.
Your customers need to be guided, not told what to do.
4. Focus On Customer Happiness
Customer happiness is an important part of customer retention, which leads to making sales and generating revenue.
It’s not just important to make your customers happy, though.
What’s really important is to pay attention to what makes them happy and why.
Once you can answer those questions, you can focus on creating an experience that makes all the customers who enter your store feel happy.
Contact Silverman Consulting And Retail Services Today
If you’ve decided it’s time to throw in the retail towel, we can help.
Here at Silverman Consulting and Retail Services, we can help with a variety of different store closing sales, including:
- Retail store retirement sale consultant
- Change in management retail store sale consultant
- Retail store closing sales event consultant
- Retail store moving sales consultant
Whatever step you’re on in your retail journey, we can help.
Contact Silverman Consulting and Retail Services today.
Silverman Consulting & Retail Services229 Yonge St suite 400,
Toronto, ON M5B 1N9, Canada
1 (888) 955-1069