May 1, 2012, Markham, ON — Financial optimism dominates the outlooks of the majority of Canadian retailers, according to the inaugural Canadian Retail Insights report.
The study, conducted on behalf of American Express Canada, surveyed decision makers in the gas, grocery, pharmacy, restaurant, fast food, apparel, general retail, and big box business to determine which issues are top of mind for Canadian merchants.
Despite the turbulent economic climate of the past few years, the report revealed that 85 per cent of Canadian retailers consider their financial outlook to be positive for the next 12 months, with apparel (95 per cent), fast food (94 per cent), and gas (85 per cent) being the most optimistic. Not only are these merchants feeling good about the next year, nearly two-thirds (64 per cent) indicated they are not worried about the state of their business over the next 12 months. Merchants are also optimistic about their industries' financial outlooks (80 per cent), with one exception. In the drug store/pharmacy sector, nearly half of all respondents (44 per cent) indicated a negative financial outlook for the industry.
"Retail — in all its forms — is often portrayed to be in crisis. What we're seeing in this report is merchants are more optimistic than anyone might have imagined," said Colin Temple, vice-president and general manager of merchant services at American Express Canada.
The optimistic outlook among businesses can be attributed to the fact that more than half of those surveyed (52 per cent) said their sales have grown compared to this time last year, crediting this growth to attracting new customers (72 per cent) and offering new products (56 per cent).
"While some growth tactics vary across sectors, the research found there are many similarities between such disparate verticals," said Temple. "Significantly, Canadian merchants across the board share a realization that putting the focus on the customer needs to be a top priority and is critical to attracting and retaining customers."
The study also revealed that Canadian merchants, regardless of sectors, see a customer demand for excellent service, with 98 per cent of those surveyed revealing customers' expectations are higher than ever. Eighty-eight per cent said their target customer has more options than ever before, and 94 per cent indicated they are placing a focus on providing better customer service to stand out from the crowd.
This focus on customers service is vital for all sectors, as nearly every respondent (99 per cent) believes customer loyalty is driven through excellent customer services and customer loyalty is imperative to their business (95 per cent).
Besides making investments to improve customer service, merchants plan to drive customer loyalty by focusing on sales and discounts (78 per cent) and expanding product offerings (66 per cent). Despite plans to provide new product offerings, most retailers don't anticipate that they will open new locations within their current market (52 per cent), new Canadian markets (48 per cent) or internationally (68 per cent).
"With two-thirds of those we spoke with telling us it's harder than ever to keep a customer, and nearly every sector looking for innovative ways to attract and retain customers, insight into purchasing behaviour is more important than ever," said Temple. "With competition intensifying, merchants can't rely on intuition or luck to find the silver bullet to keep customers coming back. Rather, they need a firm understanding of what resonates with those who shop at their businesses – and what will appeal to those who don't."
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