14 minute read 5 May 2021
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The CEO imperative: accelerate now, emerge ahead of changing Canadian consumers

By EY Canada

Multidisciplinary professional services organization

14 minute read 5 May 2021

Contributors:  Lokesh Chaudhry, Ryan Beck, Rodger So, Glenn Parkinson, Carlos Leal, Sulagna Gupta, Patrick Caraan, Niki Non

The longer the pandemic lasts, the clearer it becomes that consumers aren’t going back to the way they shopped before. Here are five considerations for leaders to meet consumers where they are headed.

In brief
  • People are becoming more worried, not less, about the impact of COVID-19 pandemic.
  • Canadian consumers want to fundamentally change their lives once the pandemic is over.
  • Companies must now act boldly and accelerate their transformation.

This article in EY’s Canadian Future Consumer Index series provides critical insights on how leaders can reframe the future of their organizations to serve the consumers in the new normal, identifying five steps to help you transform more quickly:

  1. Redesign your business around how people live, not what consumers buy
  2. Compete for shoppers whenever and wherever they are
  3. Rebuild your supply chain around the consumer
  4. Change your operating model to make it “asset right”
  5. Look at value through a wider lens

Canadians began the year with optimism but still worried about their health

As the Canadian economy begins to show signs of recovery, consumer confidence started to reach pre-pandemic levels at the start of 2021 with optimism and a positive economic outlook after reaching its lowest point ever in April 2020.1 However, health concerns remain high due to new variants, more waves of a growing number of COVID-19 cases and ongoing restrictions, which could undermine the optimistic outlook.

The fourth EY Canada Future Consumer Index finds that Canadian consumers are increasingly worried about their health, their families and their futures compared to four months ago. Some are expecting life to get harder, not easier, and the drivers of value continue to evolve. These drivers include:

Affordability is becoming critical


of consumers say price will drive their choices three years from now.

Purpose matters more than ever


of consumers believe brands must positively change the world.

Consumers embrace data sharing


of consumers would share personal data for healthier product recommendations.

On the business side, business sentiment has also continued to recover with key drivers such as employment, and investment intentions experiencing the most significant increases since fall 2020. Continuation of government relief programs, strengthening foreign demand and growing confidence as the government distributes vaccines are additional contributing factors.2

While certain sectors continue to struggle, mostly those in high-contact and non-essential services, many brands have adapted well to the COVID-19 pandemic by leveraging trends such as the adoption of digital technologies.

For instance, a large Canadian food retailer expanded its online shopping and home delivery service, using robots to assemble orders to reduce manual efforts and expanding its reach by bringing products to customers’ homes. Similarly, one of Canada’s largest athletic apparel retailers grew by 22%, investing heavily in integrating online and store operations to provide a seamless shopping experience.3

Looking back, looking ahead: learnings from the holiday season

In the third edition of EY’s Canadian Future Consumer Index, we introduced five imperatives for the holiday season:

  1. Is your digital store as resilient as your physical store?
  2. How will your products make it to your customers?
  3. Who will be spending at home?
  4. What products are consumers looking for this year?
  5. Are you prepared for in-person shopping?

The results from the Canadian holiday season sales are in. A report from Salesforce indicated that holiday shopping revenue grew by 70% in e-commerce compared to the prior year. Boxing Day online shopping traffic alone grew by 2,170% with Canadian shoppers spending an average of $366 on online orders compared to an average of $100 during Black Friday and Cyber Monday sales. Nearly two-thirds (63%) of Canadians completed their transactions through their mobile devices.4

Results from the holiday season highlight a trend that is likely to remain in the new normal – people turning to digital channels are perceiving new value through ease of access, convenience and safety.

Some retail companies are also reaping the benefits of these accelerated trends. The consumption shift to the home, together with the increased importance of health and hygiene, has boosted growth and profits for retailers that have adapted by expanding their online presence. They’ve changed much faster than anyone thought possible: 84% of consumer companies conducted a comprehensive strategic and portfolio review in 2020.

While many retailers adapted to serve the consumer of today, they will need to continue adapting to serve the consumer of tomorrow. How can retailers learn from their recent experiences to accelerate the transformation of their business and get ahead of emerging consumer needs? It won’t be easy. It will require going beyond making the current portfolio more affordable, demonstrating the benefits of their products, innovating incrementally and experimenting with direct-to-consumer channels. Brands must be bolder about meeting the needs and expectations of the changing consumer.

The consumer in the new normal

The COVID-19 crisis is continuing to have a transformative impact on the lives of consumers. While the boom in at-home consumption is unlikely to sustain at the current levels, other consumer changes will only accelerate.

Before the holiday season, 30% of consumers surveyed in Canada said they would be purchasing online, with technology (54%), apparel (33%) and cosmetics (31%) being the most popular product categories. Considerably less likely to generate online shopping interest were food and beverage categories, such as fresh food (9%), alcoholic beverages (10%), non-alcoholic beverages (10%) and packaged food (14%).

These shifts in consumer preferences make it increasingly important for brands to understand their customers and their journey in relationship to their product lines. They also reinforce the need for building an online strategy that aligns the organization’s desired outcomes with the consumer’s desired experience.

The viability of vaccines has added a new layer of complexity to consumer sentiment given the race against the clock to beat the new variants of the virus that are emerging. That said, even as some ideas remained unchanged over the past few months, other concerns have become more pronounced. For instance, four months further into the pandemic, the percentage of Canadians surveyed who think they will live in fear of COVID-19 for at least another year has risen slightly, from 40% to 42%.

At the same time, people are increasingly concerned about the health of their family, access to necessities, personal finances and basic freedoms. This differs around the world.

Consumer behaviour will keep on changing

Consumers will continue to make deep and permanent changes to their lives. Some of these shifts have been forced on them, but many are the result of choosing to live differently.

Some 40% of Canadian consumers believe post-vaccine life will be better than before the pandemic, and 35% say COVID-19 accelerated changes they had always wanted to make. That’s reflected in their attitudes around online shopping, product affordability, personal health and sustainability.

These changes differ across geographies, although consumers across the regions surveyed seem to agree that some areas are expected to get better, such as how they work, how they shop and how they are entertained. Others are likely to get worse, such as how they travel for vacations, how they use transportation and how they socialize.

Beyond the pandemic, consumer spending will reflect the different ways people expect to live their lives, and how they make choices will reflect what really matters to them. Based on the segments emerging beyond the pandemic, survey responses indicate that most consumers will prioritize affordability or their health. Others will focus on environmental or societal issues, but a minority intend to catch up on lost time and live in the moment.

These five future consumer priorities — affordability, health, sustainability, social impact and experience — define our consumer segments beyond COVID-19. According to the latest responses from Canadian consumers, each segment will align their consumption preferences and behaviours to each of these priority areas. Interestingly, the respondents’ distribution across the five segments remained relatively consistent in comparison to the survey from fall 2020, when we first introduced them.

  • Affordability: In Canada, 62% plan to be more aware and cautious of their spending in the longer term. Eighty percent say price will be the most important purchase criteria for them three years from now.

  • Health: Some 52% of consumers want to make healthier choices in their product purchases in the longer term; 37% say health or “what’s good for me” will be among the most important purchase criteria for them three years from now.

  • Sustainability: Fifty-nine percent will prioritize the environment and climate change in how they live and the products they buy; for 40%, sustainability will be among their most important purchase criteria three years from now.

  • Social impact: Sixty-seven percent will be more likely to buy from companies that ensure what they do has a positive impact on society; 46% will buy more from organizations that benefit society, even if their products or services are more expensive.

  • Experience: Globally, 37% indicated they will be less inclined to get involved in experiences outside the home on account of health and safety concerns. In Canada, 75% indicated they have changed the way they entertain themselves.

While the last global edition of the EY Future Consumer Index highlighted the e-commerce opportunity,5 keep in mind that not all product categories will shift completely to e-commerce channels. As we highlighted in the third Canadian edition, the true opportunity is to meet consumers where they want to be. To do this, companies must capitalize on the omnichannel experience: balancing volume and demand online vs. in-store and considering how the vaccination campaign can change — and even propel — physical store traffic in the near term.

Overall, consumer preferences around where to shop for certain product categories haven’t changed much over the winter. Consumers are still more likely to purchase certain products offline, including fresh food (83%), alcoholic beverages (80%) and packaged food (77%). On the other side, categories such as technology (55%), clothing, shoes and accessories (47%), and beauty and cosmetics (43%) look to have high potential for e-commerce channel uptake. That means the key question to ask now is: where do consumers want to be in a post-pandemic world, and are brands ready to meet them there?

What can brands do now to best reach future consumers tomorrow?

More than two-thirds of companies (68%) plan to spend more on transforming their business and operating models in the next three years.2 Some may want to be even bolder: only 28% say their business model is the area they will change most in response to current trends.3 What can CEOs do now to meet consumers where they are ultimately headed?

1. Redesign your business around how people live, not what consumers buy

CEOs have long talked about putting the consumer at the centre of their business. Few have come anywhere near achieving this. Why? Consumers have been reluctant to share the data required until now. The pandemic has driven an explosion in the sharing and use of consumer data. For example, 54% of Canadian respondents will share data in exchange for healthier product recommendations.

Meanwhile, companies have lacked the capabilities to make the most of the information that is already available to them. Brands need to become listening organizations, using powerful analytics and AI to manage a repository of data that provides a single version of the truth for each consumer served. A listening organization has the agility to continuously meet constantly changing consumer needs.

Consistent with what we saw in the third Canadian edition, listening organizations can gain insights and use them to adapt their product and service portfolios. That means gaining a valuable understanding of target consumers in near real time, even as priorities around health and affordability shift to accommodate experience-first, society-first or planet-first shoppers.

2. Compete for shoppers wherever and whenever they are

There have never been more ways to reach shoppers, or more brands scrambling for their attention. As of February 2021, 86% of Canadian consumers have changed the way they shop. This will continue, but only 36% of companies are currently investing to accelerate the digitization of customer journeys and business processes.4

If brands don’t understand all the possible ways their business can engage with shoppers and how to optimize each one, they will struggle to win. Capitalizing on the changing way people shop requires tracking and connecting with people across social and digital media and within their own channel ecosystem, whether that’s through e-commerce or physical locations.

3. Rebuild your supply chain around the consumer

Channel shifts, stockpiling, store closures and border issues have wreaked havoc on the consumer goods supply chain over the last year. And 56% of companies expect the supply chain to be the part of their business that changes the most over the next three years.5

While we touched on driving closer proximity to customers through digital transformation across business functions, it is important to highlight how supply chains will be critical to connecting to consumers in the future.

The supply chain of the future can act as a real growth engine and key competitive differentiator. But it must be agile, predictive, efficient and resilient. It also needs to be digitally networked, so that visibility improves. Leaders should reimagine their supply chain operating model. There are strategic choices to make about what gets done locally, regionally and globally; how warehouses and manufacturing sites best fit into the chain; how to create real-time, end-to-end visibility and monitoring; how to rationalize SKUs; and how to reduce environmental impact and waste. Collecting high-quality data to inform these strategic choices will help leaders make informed decisions and find better ways to move products through their company’s supply chains.

4. Change your operating model to make it asset right

Many consumer products CEOs have experimented with outsourcing and partnering during the pandemic, often as an agile response to supply chain disruption. This should continue and accelerate. It’s the only way to meet changing consumer expectations with the speed and efficiency the future demands, and without taking on excessive risk.

Digital transformation is essential to understanding and meeting consumers where they want to be in the future, but organizations can’t do it alone. As we’ve shared before, having partners that embrace digitally focused values can complement the organization’s digital ambitions, will create operating models that drive bottom- and top-line improvements, as well as overall value for consumers and organizations.

Brands need a clear vision of which capabilities give them differentiated value, and where they want to outsource or share value creation with an ecosystem of partners. This is the “asset right” model that will give them the ideal blend of in-house, outsourced or partnered capabilities. Today, while 72% of consumer products leaders are making significant investments to develop and manage their business partnerships, 82% have not yet clearly defined their role in future ecosystems.6

5. Look at value through a wider lens

As channels and occasions blur, companies need to look beyond siloed profit measures and explore the wider business impacts. For example, consumers have embraced home delivery, but they don’t like paying for it. It’s their number-one frustration with online shopping. Given the rapid growth of e-commerce since the beginning of the pandemic, it’s never been more important to re-evaluate e-commerce models and create profitable cost-to-serve.

Viewed separately, these kinds of activities might not feel intuitive. But taken together in the broad context of today’s reality, they’re essential to each brand’s future success. They can create immense value outside direct profits (or losses). It’s time to take a fresh look at their capabilities, and redefine their approach to profitability with a holistic, systemic lens.


While some expect the pandemic will come to an end, others believe we may need to learn to live with COVID-19 even after herd immunity is reached. Irrespective of this future, one thing is certain, Canadian consumers have adapted. Their sentiments since last summer have remained relatively stable up to this point, underlining the continued importance of affordability, and an ongoing focus on health. That said, other consumers will be more focused on sustainability, community and experience as the situation evolves.

Leaders who want to strengthen their connection to consumers post-pandemic need to target their values now, explore where they’ll want to shop and align their own organization accordingly to continue to stay relevant now.

About this article

By EY Canada

Multidisciplinary professional services organization