The BDC study released Monday also looks at the increasing importance of the internet in decision-making, with half of consumers conducting an online search prior to buying.
“It’s a look at how consumers perceive value now and it’s important for small and medium-sized enterprises to be aware of these trends to stand out in a crowded marketplace,” said Pierre Cléroux, chief economist for the BDC.
The five consumer trends identified by the BDC are:- The buy-local movement: Consumers are shopping close to home, looking for locally made goods and aware that buying Canadian-made may be a better ethical and environmental choice.
- Rising health awareness: The aging population is become more aware of healthy choices in food, cosmetics and ergonomically designed products. Half of Canadians consider the health impact of a product when making purchasing decisions and one-third are willing to pay a premium for healthy products.
- Frugality: Canadian incomes are stagnant and debt is high, meaning consumers are cautious about spending. As the baby boomers retire, an increasing portion of the population will be living on fixed incomes.
- The desire for customized goods: Consumers are looking to get exactly what they want and new technology makes it possible for them to buy it.
- The impact of the internet: An increasing amount of research about products is done online, even when consumers don’t buy online. At the same time, online shopping is growing and online reviews are critical.
“We see the impact of technology increasing every year,” said Cléroux. Some products aren’t suitable for buying online – cars, for example – but consumers will turn to the web first to research a product.
Consumers use the internet to find out where to buy, how much things cost and details of the product, including dimensions, materials and ratings. Online reviews are critical, with 70 per cent of buyers saying they are influenced by such reviews.
“This is a growing trend. We can’t go back. It is critical for small business to get ahead of internet trends and manage their image, including managing online reviews,” Cléroux said in an interview with CBC News.
About 30 per cent of Canadian small businesses don’t have a web presence, he added. “And it’s not just having a website. They need more than that – they also need a strategy on the web.”
The BDC study found 45 per cent of consumers had made an effort to buy local in the past year, 87 per cent believed it was more environmentally responsible and 97 per cent said they bought a product to support the local economy. They also are paying close attention to corporate business practices.
This goes beyond the local food trend seen in farmers markets popping up in urban centres throughout the country, Cléroux said.
“In general, consumers are looking to buy Canadian products because when they buy local, it has a positive impact on Canada and Canadian jobs and the environment,” he said.
Marketing a made-in-Canada, or better still, a local connection can be a big advantage for small and medium-sized businesses (SMEs), he said.
He cites the example of the very successful Canadian coat that markets itself as a Canadian product, and the big furniture store than offers a 20 per cent discount on Canadian-made products.
Cléroux acknowledged that the value consciousness of Canadians may work against smaller businesses at a time when there is intense competition in discount retail.
But he said innovative companies are offering alternatives that save buyers money. Among the ideas to attract value- conscious consumers are group coupon discounts, discounts for buying online and offering rental arrangements instead of buying – such as the car-sharing programs Autoshare and Zipcar.
Customize your muesli
Customization is a niche trend that SMEs can take on with a little innovation. Some are approaching the choosy consumer with a wider range of products – 3,000 brands of flooring instead of 300 – but others are actually tailoring to the individual.
One company makes a “My Muesli,” which provides exactly what they consumer wants in a breakfast cereal. Do the buyers have issues with cholesterol or nuts; do they need gluten-free?; would they prefer strawberries or almonds? The customer can order a product online that exactly meets their requirements and, because of improved production technology, the company can make what they want.
“It’s a great way to differentiate yourself in a crowded market,” Cléroux said.
The BDC, which has a mandate to promote Canadian entrepreneurship, based its figures on a review of the literature, followed by an Ipsos Marking survey of 1,023 Canadians that was undertaken in August.