COVID-19 has had a clear effect on retail, accelerating trends that expected to take years to saturate the market in just a few months. As a result, customer habits have never been so dynamic. As we enter the school year and customer needs change yet again, who will be the big winners under the first fall and holiday season under a pandemic?
Leisure and Learning
With many Canadians working from home, boredom busters are still at an all-time high. Not only are they picking up new hobbies for themselves, consumers are also responsible for keeping their kids entertained. Furthermore, some parents have assumed the role of teacher for their children if they elected to keep them home, so any educational products, school supplies, and even electronics that facilitate at-home learning will also see an increase. As consumers remain wary of gyms, affordable home fitness products such as weights, yoga mats, or sports equipment will also be in high demand.
By the numbers: June saw a 19% increase year-over-year in Sporting Goods, Hobby, Book and Music Stores, which we expect to continue through to September. The category also saw an all-time high in dollars spent in the category for June. Electronics and Appliance Stores, on the other hand, is a much more volatile category, growing 8% in June. This category will likely see more gains closer to September, as good weather and no school would not have driven major growth until now. However, June still saw a 50% increase in specifically sporting goods sales year-over-year, and a 14% increase in arts and leisure supplies.
Home Sweet Home
Similarly, the fact that Canadians are spending more time at home has driven growth in home categories. Increased safety outside, reduced out-of-home travel, and no dine-in restaurant options all contribute to a surge in backyard hosting. As a result, homes are being decked out to the nines with outdoor and kitchen upgrades. Once cooler weather sets in, we expect to see fireplaces, outdoor heating, and seasonal decorations will also see a surge in growth. While we have likely passed the point where consumers are establishing and decorating their new home offices, spaces for children to do schoolwork undisturbed and indoor activities as the weather gets cooler, will keep these categories ramped up.
By the numbers: As mentioned above, we have likely already passed the point in June where customers were creating home office spaces, but we know from retailer reports that later months will see spikes in these categories. In fact, Statistics Canada reported a 2% increase year-over-year in June for indoor furniture, but a 71% increase in outdoor furniture. Home and garden equipment sales saw a 17% increase.
While many things will never be the same, it can be certain that holiday shopping will be vastly different this year. Store capacities, queues in winter weather, and the risk of a second wave will dramatically impede holiday shopping in physical stores, but all shopping channels may be affected by stocking issues. This may drive customers to shop for their holiday gifts early, especially since Black Friday and Cyber Monday sales have already been on the rise. In addition, Amazon’s Prime Day is rumoured to be taking place in October, which would drive early holiday shopping for new Prime members but would also drive other retailers to hold their own “Prime Day” sales during the same week to compete. Together, these factors may have a marked effect on how money is spent over the whole of Q4 2020.
By the numbers: While it is definitely too early to see any tangible effects of this prediction, particularly since Statistics Canada is still reporting for June, we know from retailer reports that winter and holiday products are already being bought up. For example, Walmart Canada has remarked that products such as skates and toboggans are already being bought up. Mountain Equipment Co-op saw similar patterns. June is still too early for Statistics Canada to report winter goods, so it remains to be seen how much an effect these early purchases will have this season.
Statistics Canada will release their July numbers this Friday. Will they be in line with our predictions? What products have you been buying a lot of? Connect with us to chat!
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