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TORONTO, Jan. 27 /CNW/ - Canadians are radically reassessing how they spend their money by focusing primarily on cost and quality, according to a new American Express study released today. This renewed focus on value for money and quality goes hand-in-hand with a new type of consumer behaviour in which Canadians seek products and services that are in line with their personal values and that support both their local and national economies.
"Canadians are increasingly looking for meaning in their purchases, so when they buy products they are asking questions about whether the product is ethically made or environmentally friendly," said retail consultant Anthony Stokan, partner at Anthony Russell and Associates in Toronto. "People are looking for a closer relationship with what they buy by choosing local products and retailers."
The report -"American Express: Consumer Spending Futures: The New Era of Pause and Purchase"- classifies four key consumer spending trends that have emerged and looks ahead to see how new technologies, changing social norms and increased brand transparency are causing a significant shift in the way consumers will shop and spend in the future.
The new report found key indicators that show how consumers are redefining value and how businesses can better connect with customers.
"The savviest spenders in Canada now consider so much more than just cost," said Jennifer Hawkins, VP and General Manager Consumer Products and Partnerships, American Express Canada. "We're seeing a 180-degree turnaround from the last decade where consumption was conspicuous. Now people are buying to make a statement about the kind of world they want to live in."
Top Four Consumer Spending Trends for 2011 and Beyond
The four key trends that are shaping Canadian consumer spending today were identified based on a combination of consumer survey data, expert interviews and qualitative research that form consumer case studies:
1. SLEDS (Supporting Local Economies Through Direct Spending)
Urban consumers report that they are shifting their habits towards those
of their rural neighbours, seeking more local, home-grown and
community-focused interactions, both in-person and online. These
'SLEDS' buy to be part of their local community and are shopping for
more sustainable products that protect the environment.
- 36% of Canadians say they want to be a greater part of the local community, therefore they buy from local brands and vendors
- Almost half (47%) say the availability of locally-sourced or locally-made products affects their spending today
- 46% say they were more aware of their environmental impact as consumers
Implications: In the coming years, more consumers will continue to patronize smaller, community shops, local vendors and brands. Additionally, more ethical products will be prioritized as consumers make choices that promote a more self-sufficient, sustainable lifestyle.
2. V-tailing (Value retailing)
Canadians are shopping less, are choosing products that represent value
for money and expect value from brands that align with their own desire
for simplicity and ethical living.
- 76% of Canadians describe themselves as cost-conscious and 62% describe themselves as quality-driven
- 46% say they are more conscious of their environmental impact
Implications: Consumers will seek out brands whose actions are in sync with their personal beliefs. They may soon expect reminders of who or what their purchase benefits to make their efforts tangible.
3. SMUGS (Socially-Mobile Ultra-Green Seniors)
Canada's 55 to 64-year-old demographic is redefining traditional notions
of the baby boomer generation. These seniors value individual freedom
and they seek luxury and new experiences.
- Almost one out of ten (87%) of 55 to 64-year-olds make luxury purchases
- One in three (27%) say 'being free' is essential to their quality of life
- More than half (54%) say being able to access the internet nearly everywhere impacts their shopping habits
Implications: So-called Boomers will expect to play a bigger part in creating products and goods, radically changing the traditional retail model.
4. Re(n)tail
Cost-conscious young consumers aged 18-34, brought up in an era of online sharing and collaboration, are choosing to downsize and simplify their possessions, experiencing products and services rather than owning them.
- Almost half (48%) think very carefully about what they buy
- 32% think long and hard before spending money
- More than half (57%) say they shop for things they 'need,' versus 37% who say they shop for things they 'want'
Implications: Younger consumers will gravitate toward businesses that offer a chance to make a smaller investment tailored to their perceived frequency of use of a product or service. A 'Cost per wear' and 'Cost per use' way of thinking will permeate purchasing decisions for this age group.
The study, conducted by Future:Poll, the research division of The Future Laboratory, explored the impact of change on current and future consumer-spending trends across six key markets: Canada, the US, the UK, Australia, Japan and Mexico.
For more information on the report, please contact Killeen Kelly at kkelly@breespr.com
About Consumer Spending Futures: The New Era of Pause and Purchase
American Express commissioned Future:Poll, the research division of The Future Laboratory, to explore the impact of change on current and future consumer spending trends across six key markets. The survey polled the opinion of 1,000 respondents aged 18 to 65+ years old in each of the six countries, totaling 6,000 respondents. The process utilized a combination of quantitative and qualitative methodology, spanning extensive desk and visual research, online consumer surveys, expert interviews and consumer case studies.
About The Future Laboratory
Recognized internationally for its innovative approach to trend forecasting, consumer insight and brand strategy, The Future Laboratory offers qualitative and quantitative insights into future consumers. Since 2001, they have developed a consultancy that unites editorial work, independent research and creative thinking of the highest caliber with engaged operations that respond to a brand's need for research and enquiry. thefuturelaboratory.com
About American Express in Canada
American Express in Canada operates as Amex Bank of Canada and Amex Canada Inc. Both are wholly owned subsidiaries of the New York based American Express Travel Related Services Company, Inc., the largest operating unit of the American Express Company. Amex Bank of Canada is the issuer of American Express Cards in Canada. Amex Canada Inc. operates the Corporate Travel, Travel Services Network and Travellers Cheques divisions in Canada. American Express opened its first offices in Toronto and Hamilton in 1853 and now employs 3,700 Canadians coast-to-coast.
Visit American Express Canada on Facebook at www.facebook.com/americanexpresscanada
Killeen Kelly, on behalf of American Express, (416) 644-2273, kkelly@breespr.com;
Amanda Betti, American Express Canada, (905) 474-7903, amanda.betti1@aexp.com;