BC Business
Retail trends in B.C. | BCBusinessRetailers that can respond to B.C.'s changing demographic makeup are primed to do well in the coming years.
Retail trends in B.C. | BCBusinessRetailers that can respond to B.C.’s changing demographic makeup are primed to do well in the coming years.
Three industry experts shared their thoughts and research on the year ahead for retail at the ICSC’s “Consumer Trends Revealed” panel on February 7. The panellists included Evi Mustel, president of Mustel Group Market Research; James Smerdon, vice-president and director of retail consulting at Colliers International; and Andrew Ramlo, director at Urban Futures Institute.
The overall sentiment was that despite an aging baby-boomer population, retail spending is not facing a severe drop-off. It is, however, undergoing a complete transformation, but based on the ways that people shop, not the number of people in the population. Evi Mustel referenced a quote from author Paco Underhill, saying “The world of shopping will change more in the next five years than it has in the past fifty years.” The panel also agreed that cross-border shopping is a going concern. According to James Smerdon, “It’s also tourism, not just consumerism,” making it a more difficult issue to combat.
Armed with slides showing B.C.’s changing and aging demographic, Andrew Ramlo started the session by debunking the myth that baby boomers will leave a vacuum in consumer spending. “Demography changes at a glacial pace,” says Ramlo, stressing that the gaping hole left by the aging baby-boomer population does not actually exist.
Ramlo referenced the 1999 book Boom, Bust and Echo 2000 that predicted the next generation would have 45 per cent fewer consumers than the baby boomers. When in fact, Gen Y—those born between 1966 and 1985—actually make up 27 per cent of the population, providing a robust group of consumers: nine million people between the ages of 27 to 46, to be exact. Not the dire situation that has been anticipated and prolifically written about in recent years.
Immigration is changing the makeup of consumers in B.C., so much so that by 2031, people who self-identify as a visual minority will actually be the majority, at 61 per cent of the population in Vancouver. Ramlo says that this change in demographic will make it more difficult for retailers to navigate the market, but those nimble enough to respond to and understand these changes are primed to do well. “Vancouver and Toronto are the two most ethnically diverse cities in the world, and there hasn’t been much research to fully understand that,” adds Evi Mustel.
Retailers, Ramlo says, should be prepared to adapt their strategies for a changing demographic, but not the fallout that “demographic doomsday-ers” are predicting.
“Consumers have become savvier,” says Mustel, calling them “bargain hunters” rather than shoppers. In a recent poll of B.C. adults, 53 per cent admitted to being concerned about job security and their source of income. The attitude surrounding shopping is changing, and more people are proud to be bargain hunters and are increasingly open about sharing the deals they got at big-box discount retailers like Winners or Target.
In addition to being concerned about income, more consumers are downsizing to smaller spaces, says Mustel. And with smaller spaces comes a greater awareness of what is truly needed and the amount of garbage that’s being produced. These habits and values are being reflected in how consumers choose where they want to shop. Mustel called out London Drugs as an example of a retailer who is successfully catering to the environmentally minded consumer and the increased desire to shop sustainably.
Tablet sales doubled in the last year, and more consumers are becoming better equipped to find things quicker and easier, and get more engaged with the stores they’re buying from. Mustel encourages retailers to use online tools and technology to engage with consumers; “don’t see them as a threat,” she says.
Engaging with consumers is also the best way to promote your brand. “The most effective form of advertising is word-of-mouth,” says Mustel. “The medium is the people, and they’re the ones sending messages to each other.”
Mustel points out that bricks-and-mortar are still paramount in the retail strategy. Stores that capitalize on people’s desire to connect with other people are going to do really well. Mustel referenced Chapters’ success in creating “that living-room feeling” in its stores.
James Smerdon stressed the importance of knowing what is most important to your customers. A U.K. company saw little success after offering same-day delivery to its customers, seemingly ignoring research that had shown that 58 per cent of shoppers expressed a desire for free or discounted shipping, and 42 per cent wanted easier returns and exchanges. This ties back into Mustel’s points about using technology to engage with customers.
-Create an in-store environment where consumers want to hang out -Use technology to engage and learn from your customers -Look at the changing ethnic demographics in B.C., not the aging baby boomers -Consider shoppers’ values, like sustainability and environmental concerns -Think of every shopper as a potential word-of-mouth advertiser
Kristen Hilderman is the assistant editor at BCBusiness magazine, specializing in retail and manufacturing. | Twitter