Insights

The frugal economy: How brands can connect with Canada’s cautious consumers

Posted by
Adrienne Connell
Insights

The frugal economy: How brands can connect with Canada’s cautious consumers

Écrit par
Adrienne Connell

Anyone with a grandparent that lived through the Great Depression can tell you a dozen different stories about how they stretched every dollar as far as it can go: “Don’t throw out those leftovers” or “That can be sewed back together” were common phrases from members of that generation.

Findings from our recent global study, COVID-19 Mindset: The Collision of Issues seem to suggest we’ll be sharing similar stories about Canadians’ spending habits in 2020. The study shows 42% of Canadians anticipate stopping or cutting back on their spending and expenses over the next 6 months. Not only are we fully embracing the frugal life, we’re doing so at a higher rate than the global average, with only 35% of global respondents saying they are also cutting back. On top of declining consumer purchase intent, the Conference Board of Canada is forecasting that the economic recovery could take until the second half of 2021 for most provinces.

Does this equate to nothing but bad news for Canadian businesses trying to win back customers? Not necessarily. Just because Canadians are being cautious with their spending, doesn’t mean they aren’t still making purchases, they’re just being savvier about what, when and where they buy.

Canadians are less likely than their global counterparts to say they have ceased purchases of non-essential items with 57% of Canadians agreeing with this statement, 7 points lower than the global average. In addition, only one quarter of Canadians anticipate that they will delay big purchases such as cars, homes and vacations.  

The data seems to suggest that they are also increasingly willing to make purchases in-store again:

  • 81% plan to go grocery shoping in the next 6 months, 7 points more than the global average of 74%
  • 52% plan to visit large retail stores
  • 48% plan to shop at an indoor mall

We haven’t given up on online shopping either:

  • Almost half (48%) of Canadians anticipate that they will buy more things online for home delivery
  • 42% plan to take advantage of self-serve checkouts and/or curbside pickups

But before they purchase, Canadians are scrutinizing brand behaviour and it’s influencing their purchase decisions like never before:

  • Almost 2/3 (65%) of Canadians expect companies to market or advertise differently than before COVID-19
  • 60% say they will examine how a company behaved during COVID-19 when considering when to buy their product
  • 62% will explore how a company behaves when responding to issues of racial or gender equality when considering whether to buy

Brands should take notice and act accordingly, as 53% of Canadians claim to have a deeper relationship with brands based on how they behaved during COVID-19.

To connect with the cautious Canadian consumer and drive brand consideration and purchases, brands should take the following steps:

  1. Communicate clearly and often about the positive actions your organization is taking to protect its customers, employees and society-at-large. Delivering a quality product or service is no longer enough.
  2. Be mindful of the current Canadian mindset and adjust your brand communications, where possible, to demonstrate empathy and understanding for what they are experiencing.
  3. Don’t shy away from promotional content indefinitely. You may need to re-visit your channel mix and messaging, but continue to show up in brand-safe environments.

Looking for more information and advice on the road to recovery? Find the latest COVID-19 insights and resources here or contact our team to learn more about our Recovery & Resurgence support.

Anyone with a grandparent that lived through the Great Depression can tell you a dozen different stories about how they stretched every dollar as far as it can go: “Don’t throw out those leftovers” or “That can be sewed back together” were common phrases from members of that generation.

Findings from our recent global study, COVID-19 Mindset: The Collision of Issues seem to suggest we’ll be sharing similar stories about Canadians’ spending habits in 2020. The study shows 42% of Canadians anticipate stopping or cutting back on their spending and expenses over the next 6 months. Not only are we fully embracing the frugal life, we’re doing so at a higher rate than the global average, with only 35% of global respondents saying they are also cutting back. On top of declining consumer purchase intent, the Conference Board of Canada is forecasting that the economic recovery could take until the second half of 2021 for most provinces.

Does this equate to nothing but bad news for Canadian businesses trying to win back customers? Not necessarily. Just because Canadians are being cautious with their spending, doesn’t mean they aren’t still making purchases, they’re just being savvier about what, when and where they buy.

Canadians are less likely than their global counterparts to say they have ceased purchases of non-essential items with 57% of Canadians agreeing with this statement, 7 points lower than the global average. In addition, only one quarter of Canadians anticipate that they will delay big purchases such as cars, homes and vacations.  

The data seems to suggest that they are also increasingly willing to make purchases in-store again:

  • 81% plan to go grocery shoping in the next 6 months, 7 points more than the global average of 74%
  • 52% plan to visit large retail stores
  • 48% plan to shop at an indoor mall

We haven’t given up on online shopping either:

  • Almost half (48%) of Canadians anticipate that they will buy more things online for home delivery
  • 42% plan to take advantage of self-serve checkouts and/or curbside pickups

But before they purchase, Canadians are scrutinizing brand behaviour and it’s influencing their purchase decisions like never before:

  • Almost 2/3 (65%) of Canadians expect companies to market or advertise differently than before COVID-19
  • 60% say they will examine how a company behaved during COVID-19 when considering when to buy their product
  • 62% will explore how a company behaves when responding to issues of racial or gender equality when considering whether to buy

Brands should take notice and act accordingly, as 53% of Canadians claim to have a deeper relationship with brands based on how they behaved during COVID-19.

To connect with the cautious Canadian consumer and drive brand consideration and purchases, brands should take the following steps:

  1. Communicate clearly and often about the positive actions your organization is taking to protect its customers, employees and society-at-large. Delivering a quality product or service is no longer enough.
  2. Be mindful of the current Canadian mindset and adjust your brand communications, where possible, to demonstrate empathy and understanding for what they are experiencing.
  3. Don’t shy away from promotional content indefinitely. You may need to re-visit your channel mix and messaging, but continue to show up in brand-safe environments.

Looking for more information and advice on the road to recovery? Find the latest COVID-19 insights and resources here or contact our team to learn more about our Recovery & Resurgence support.

Adrienne Connell
Senior Vice President & Partner
FHR’s Social & Digital practice is one of FH’s global hubs for social and innovation, and the only one in the Canadian market. A recognized leader in the global FH network, Adrienne is sought after for her strategic approach to helping brands embrace digital innovation and transform how they communicate.
Adrienne Connell
Vice-présidente principale et associée
La pratique de campagnes sociales et numériques de FHR est l’un des centres d’innovation mondiaux de FH en matière de communications sociales, en plus d’être la seule du marché canadien. Adrienne se distingue au sein du réseau FH mondial par son sens du leadership, en plus d’être appréciée pour l’approche stratégique qu’elle adopte lorsqu’elle aide les marques à accueillir l’innovation numérique et à transformer leur manière de communiquer.