Charting the holiday shopping trends Google searches reveal

Canadian shoppers are stuck in a bind this holiday season. Caught between the COVID-related scarcity and supply-chain shortages of the last two years, and the nasty inflation of 2022, many are bargain-hunting aggressively, or cutting back entirely.

That’s according to Eric Morris and his team at Google’s retail practice in Canada.

Drawing on search data, the team reveals contradictions COVID-19 has brought to the shopping of Canadians. Despite all the financial difficulty many have faced over the last three years, overall sales are up.

As people wrap up their holiday shopping, Google’s treasure trove of data makes it clear that the pandemic has left its mark on Canadian shopping habits.

The Star spoke to Morris about holiday sales, how retailers have adapted to the pandemic, and his own gift-buying plans:

Christmas shoppers are very concerned about the rising cost of everything; how do you convince them to go out, when they can’t even afford gas or food?

For the last few years, we’ve largely had a shared experience living through COVID, working through COVID, having kids home during COVID. I think what’s occurred over the last year is those experiences have started to diverge. Economic indicators are mixed, and I think that’s what makes this period so confusing. The unemployment rate is low. Savings rates for Canadians, in aggregate, are high. Inflation is high.

All of these things impact Canadians differently. There are Canadians making decisions around buying groceries or the same number of gifts that they had last year—and may have to choose places to cut. Then, there are other Canadians who aren’t faced with the same choices. Different Canadians, and by extension, different retailers, are experiencing something very, very different.

What we’ve observed at Google and from our retail partners is that Canadians who choose to shop are more price-conscious and value focused than ever before. They’ve started their holiday shopping earlier. Even in September, searches for Black Friday deals were up 300 per cent versus the year before.

It sounds like we’re seeing a recovery where some shoppers are spending a lot and some aren’t. Is that correct?

It is. In aggregate, retail sales are up and e-commerce sales are up this year. RBC just published a report that cited credit card data to say Canadian holiday purchases are actually up (compared to) the year prior. There are all of these signals that shopping is still at elevated levels and growing, versus a year ago, but again, these things affect retailers and shoppers differently.

Many of us invested heavily in exercise equipment early on in the pandemic. But we were buying fewer suits, fewer dress pants, and dress shoes, because we weren’t going into the office. If you think of the economy as one giant stock portfolio or mutual fund, the retail industry is similar; (the portfolio) has good and bad stocks, year over year, depending on the sentiment of any given cohort of Canadians.

How do you make time to shop for people in your life over Christmas?

I’ve got three young kids at home. This is, as you know, a really fun time of the year. I think the last few years have been so challenging as a parent, when we’re not sure if our kids are going to be in school. All of us want to bring a little more joy this holiday season, myself included.

As a shopper, I would say I am no different than the “average” Canadian. I shop online. And I shop in-store. I come into the office three days a week, so I shop in stores that are close to my office and home. I love the convenience of shopping online and getting what I want delivered to my home, I also take a lot of pride in wanting to support the businesses around me, especially for last-minute gifts. I’m like a lot of Canadians where I’m shopping for gifts the day before Christmas, running to the Eaton Centre.

How have retailers changed to meet the demand for convenience and for cheap prices?

Canadian retail changed forever during the course of the pandemic. When stores were closed in 2020, e-commerce tripled, quadrupled, or (grew even) more. As stores have reopened and we’ve gone back to something closer to normal, e-commerce remains at historically elevated levels. E-commerce now represents roughly 15 per cent of total retail sales, roughly double where we were a few years ago, before the pandemic.

So Canadian retailers embraced the moment out of need and have leaned into serving Canadians who want to shop online.

At the same time, this year is different in many ways. In-store retail sales are at elevated levels versus a year or two ago. That’s a really, really interesting dynamic for retailers to manage where they’ve built the infrastructure for online shopping, but in-store experiences lend themselves better towards impulse purchases.

For retailers who operate online and in-store, the in-store transaction is heavily valued, and heavily desired, and very profitable for them. The retailers we see doing this the best are the ones that meet customers where they are. If a customer wants to research online and buy online, they have a great e-commerce experience, or (they can) buy in-store. Many retailers know through their own data that their most loyal customers are the ones who shop online and in-store. They tend to shop twice as frequently, and spend twice as much, because the retailer is meeting them where they are.

We’ve been bracing for a recession. Do you see the possibility of stores cutting down on their in-person or online sales strategies because they feel they can’t afford to support it?

I think that’s a bit of a false dichotomy. What we observe is that the investment retailers make online and the investments they make in stores, whether it is physical real estate or staffing, drive revenue and drive profitability. And they drive loyalty. It’s not about thinking about one channel at the expense of the other. It’s about finding the right investment level to support both.

Online and in-store shopping, together, are better than the sum of its parts.

When you invest in both at the appropriate level, you deliver a far better customer experience, and that’s what we see retailers doing in this country.

Consumers seem worried about supply shortages in 2022. With the exception of children’s medication, we haven’t had as many retail supply issues in the last couple of months. Is this concern just a holdover from the pandemic?

We’re creatures of habit, right? The shopping experience we’ve all had these last few years is very fresh in our minds. We’ve experienced store closures, supply shortages, and even delays in e-commerce deliveries for the last two years. All of these things have encouraged us to shop earlier than we had ever before.

We’ve seen that data at Google as well. All of the Black Friday searches we saw in September is one sign of heightened shopping activity, and reminiscent of what we’ve seen over the last year or two. I think, for most retailers this year, it’ll be less about being short of inventory. Many are flush with inventory. It’s been very hard as a retailer to predict exactly what demand will be like this year.

Many retailers see their sales (affected) by the weather. The last few weeks of October and November were unusually warm. Canadians are more likely to shop online for the holidays when it is cold, dark, and snowing. An unusually warm fall may have pushed out holiday sales that we would have normally seen in October into November and December.

What do you think is the most overlooked metric for measuring how busy shoppers will be this year?

Google Search is a really interesting barometer into just how decided or undecided Canadians are. It’s… about analyzing data and distilling it into insights that help retailers. Sometimes, for a retailer, the products they think are going to be bestsellers just aren’t the bestseller. Even retailers can be surprised.

It’s not uncommon for the retailers we work with to adjust their strategy, whether it’s their advertising strategy, their website strategy, their promotional strategy, or their email marketing strategy based on the real-time insights they glean from Google searches.

What’s one aspect of customer engagement that you can’t measure right now, but wish you could?

The single biggest challenge that retailers have is connecting the online and the offline experiences. Every retailer knows that most, if not all, of the purchases made in-store are heavily influenced by what we do online: what we search for, what videos we watch, what articles we read. But it’s really hard to quantity.

Retailers are leaning into these challenges and working very hard with us to try and solve them. It’s much harder to measure the exact impact of a website visitor on in-store sales than we realize. The ability to connect those two experiences and deliver a unified experience really is the Holy Grail for retailers.

Brennan Doherty is a former staff reporter for Star Calgary and the Star’s 24-hour radio room in Toronto. He is now a freelance contributor.


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