9 minute read 18 Sep. 2020
Rows of shopping carts

Future Consumer Index: Can you reopen with certainty in an uncertain world?

By EY Canada

Multidisciplinary professional services organization

9 minute read 18 Sep. 2020

Contributors: Lokesh Chaudhry, Rodger So, Glenn Parkinson, Anthony Rjeily, Carlos Leal, Sulagna Gupta, Adam Purdon, Niki Non

The second Canadian edition of the EY Future Consumer Index suggests that Canadians’ uncertainty about what things will look like post-pandemic is leaving them cautious about the future.

As COVID-19 restrictions ease and businesses reopen, Canadian consumers are cautious about what could be just around the corner – and they’re spending accordingly. Responding best to this changed reality requires retailers to drill down to a deeper understanding of their customer than ever before by acknowledging consumer caution, acting transparently and – above all – innovating in ways that align to what your customers value most.

For this Canadian edition of the EY Future Consumer Index, we took a look back at four previously identified consumer segments — cut deep; stay calm, carry on; save and stockpile; hibernate and spend — to explore how the pandemic has changed consumer behaviour, and we identified three key ways retailers can adapt:

  1. Recognize that optimism and caution go hand in hand.
  2. Embrace transparency as tantamount to safety.
  3. Connect innovation to consumer values.

Recognize that optimism and caution go hand in hand.

Make no mistake: Canadian consumers are eager to return to normal, and that includes visiting retail stores.1 But consumers are still operating in a fearful environment. With every passing week of the pandemic, consumers have worried more about how the crisis would change their daily lives, jobs and freedoms for months or even years to come. This is shifting consumer sentiment towards one of caution and pessimism about the future. Nearly half of all Canadian respondents now indicate a decrease in consumer sentiment.

These factors are hitting the economy hard. Bank of Canada research shows weak sales expectations and reveals business sentiment bordering the trough seen during the 2007-09 financial crisis.2 With 57% of survey respondents fearing a second COVID-19 wave over the next six months, it’s clear that health fears, exacerbated by concerns over job security, are having a real impact on consumers’ willingness to go out and spend.

Long-term expectations


of survey respondents fear a second COVID-19 wave over the next six months.

That’s something we see in our own EY Index. Respondents from all over the world continue to cite anxiety amid the ongoing pandemic.3 For example, China was one of the first countries to emerge from lockdown, yet many of its citizens are still concerned about the pandemic and remain cautious about “returning to normal.” On the flip side, the safer consumers feel in your retail environment, the more likely they are to embrace it.

How can you adapt today?
  • Walk the talk on safety. Cautious consumers are evaluating risks regularly, as many still worry about getting sick. Let go of what worked yesterday and start seeing your physical space through your customers’ eyes today. Some restaurants and coffee shops have started moving cashiers and products closer to front entrances, limiting circulation to curb virus transmission at indoor retail spaces. Getting creative about how your operation runs could go a long way to making your customers comfortable enough to come in.

  • Make your team a top priority. Staggering checkout lines and wearing masks shouldn’t only be about creating a safer space for your consumers. Understanding what would help your front-line staff feel more comfortable is equally important. Remember: your people are your brand ambassadors. Like consumers, they have fears and concerns. Making them comfortable and safe at work is a business imperative that sends a clear message to all your stakeholders (external and internal alike).

  • Show, don’t tell. However you’re adapting to help consumers and employees feel safe, reinforce those measures throughout your physical space. Creating visual cues and markers for lines, distancing and shop flow can help consumers and staff interact safely, while reinforcing the message that you have their wellbeing top of mind. That makes for better consumer experiences in an uncertain market.

Embrace transparency as tantamount to safety.

The spending trends we’re seeing now are likely to remain par for the course across most categories for the foreseeable future. Winning wallet share is harder than ever in this climate, and committing to safety is critical for retailers looking to eke out a competitive edge. But truly setting yourself apart in this complex environment comes down to not only committing to safety but doing so authentically and transparently.

Some 70% of Canadian consumers say they’d be more likely to buy from a company that’s taking measures to help fight COVID-19, being transparent in all they do, and protecting/rewarding at-risk staff. A further 68% of consumers say safety and sanitation protocols are the most prominent factor when shopping at brick and mortar locations now.4 That means what you do builds brand just as powerfully as how you do it. Retailers who lead with transparency and invest in these areas now can nurture the consumers’ comfort level across all channels (in store or online).

Consumer behaviour


of consumers say they’d be more likely to buy from a company that’s taking measures to help fight COVID-19.

Our EY Index reinforces the need for retailers to set themselves apart in these ways. Most Canadians now fall into the save and stockpile and cut deep consumer segments, which see consumers shying away from spending.

All three categories saw an initial surge in demand early on in the pandemic. Now, our research shows that most respondents in all consumer segments except hibernate and spend intend to spend less on these categories over the next month. Instead, they’ll be opting to invest an average of 25% more on groceries (fresh, frozen, canned or dried food categories) to prep meals at home. Tapping into your share of that tighter wallet means leveraging every differentiator you’ve got – including your ability to exude genuine transparency across the board.

How can you adapt today?
  • Align your marketing with your purpose. We’re emerging from the pandemic into an economy now grounded in health and caring. Companies that show intentional and – above all – genuine efforts to support charitable and community-centric campaigns are more attractive to consumers who are looking to buy from authentic, honest brands. Making donations or shifting production towards personal protective equipment (like one Canadian retailer that donated 60,000 face shields to the federal government and 1,000 pairs of safety glasses to a provincial health authority) says a lot about what your brand stands for. Ensuring your marketing efforts shine the light on how your organization is making an impact can position you well in the eyes of increasingly selective consumers.

  • Paint pricing in a new way. It goes without saying: consumers concerned with job security and finances are highly sensitive to price. That means companies face a range of pricing challenges compounded by fluctuating demand (from a drop to an increase to an all-out pause). Now’s the time to explore adaptable pricing models or payment alternatives that could offer the kind of short-term relief cautious consumers now value. From terms to credits against future purchases or one-time promotions, evolving your pricing can be a step in an authentically transparent direction.

  • Expand in-store training to online channels. The last few months have made it clear that there are more ways than one for retailers to engage with consumers. Retraining in-store staff to engage digitally can help customers feel more connected to their shopping experience, even from home. Creating content like short videos and hosting customer live streams are key ways to differentiate your retail operation and build relationships better suited to the new reality. Case in point: one Canadian women’s fashion brand is using digital channels to host live styling sessions that sales associates would otherwise have conducted in stores. That same retailer is also designating product and brand experts to consult on fit or style through Instagram. In another case, a global athletic apparel retailer based in Canada is delivering safe and engaging digital experiences through home workouts. By acquiring a tech company that transforms mirrors into interactive home gyms, they’ve increased digital visitor participation in their virtual workouts from 64% to 75% during the pandemic.5 Technology means the possibilities are endless; training makes those possibilities feasible.

Connect innovation to consumer values.

Retailers that want to remain relevant and continue to meet and exceed cautious consumers’ expectations should be innovating to realign with new consumer preferences around value, quality, affordability and health.

What could that look like? Reimagining how customers engage with products or services in a contactless world shows you recognize the renewed value your customer places on safety. For example, automating some elements of your process can free up human capital to work at better and higher use on innovation initiatives. That builds brand in the eyes of the consumer and can even drive efficiency within your operating model. Both buoy your resiliency in a market where consumers remain cautious and wallet share is harder to come by.

How can you adapt today?
  • Augment reality to augment value. Your customer may no longer be as comfortable testing products out in the store. Now’s the time to think outside the box about how you provide a similarly valuable experience in a way that works for them. Augmented reality (AR) can help replicate the in-store experience, enabling customers to make remote choices beyond just how a product looks. AR can allow shoppers to get a sense of size, fit and feel by creating a remote visual sensory experience. For example, one Canadian cosmetics company that implemented AR smart mirrors in its stores has seen a surge of online global business so promising they’re now rolling the tool out in Europe, South America and the Middle East.
  • Rethink retail spaces. It’s no secret that Canada is over-retailed given our population size to retail square footage and inventory levels. That’s leading to more and more empty retail spaces right now – and a whole lot of opportunity. Companies can transform vacant lots into micro-fulfilment centres or use them as contactless curbside pickup spots. Envisioning that empty parking lot as a potential space to support last-mile delivery (or a range of other ideas) can make a big difference in how you evolve next. One Canadian grocery store is doing exactly that, transitioning their loyalty offering of click-and-collect points outdoors to enable contactless, curbside pickup. This appeals to anxious consumers’ needs, reduces indoor foot traffic and tells consumers: we understand what matters to you most.
  • Embrace new tools to plan for supply and demand. Consumers want predictability. They’re putting higher value on knowing whether essential products will be available at the right place and time. Next-generation artificial intelligence and machine learning (AI/MIL) capabilities can enhance the consumer experience by offering better inventory line of sight. That enables you to deliver products more efficiently, while optimizing price and creating a more predictable customer experience. For example, one Chinese ecommerce giant recently engaged in a supply chain transformation partnership with a US digital solution provider. The goal was to help partners and vendors better monitor and respond to customer needs. The partnership also provided the retailer with new ways of predicting potential supply chain disruptions. Embracing these kinds of tools can help you adapt to consumers’ changing values while operating more efficiently at the very same time.


Consumer values are evolving day by day in time with the pandemic. The way we reshape our retail models and strategies to best align with those changes can play a big part in our success. By innovating accordingly and keeping customers’ needs and expectations at the heart of it all, retailers can buffer themselves against the shifting consumer reality today, and whatever comes next and beyond.

About this article

By EY Canada

Multidisciplinary professional services organization