ETHOS Wednesday Business Blog

TRENDS

The Business Development Bank of Canada is a wealth of information for new and existing entrepreneurs. In this infographic, they outline 5 must-watch trends shaping the future of Canadian business – http://www.slideshare.net/BDC_Entrepreneur/bdc-sme-trendsinfographic

A study by the Business Development Bank of Canada presented relevant information on trends and facts about entrepreneurs. Economist Benjamin Tal, who authored the paper, said several factors appear to be driving specific trends.

Overall trends that we see for those who are self-employed include:
1. Changed path of consumer purchasing/Internet
2. Web
3. New “health mania”
4. “Made in Canada” advantage
5. Customization is King
6. Mass-produced products
7. Lingering effects of the recession

1. The changed path of consumer purchasing

Talking Point: The Internet now shapes nearly every aspect of a consumer’s purchasing decision. The first step for many Canadians begins on the web: they search for the product or service, are heavily influenced by online reviews, compare product characteristics across websites, locate businesses with proximity searches, and often purchase online. Price wars now take place across the planet.

2. Web

Talking Point: A simple Web presence is no longer enough. A structured, proactive and tailored multi-platform strategy has become critical in today’s business environment, and the underdeveloped online Canadian retail presence offers substantial opportunities for business. Those that move quickly to adapt their business models and embrace these changes can make the most of this new reality.

3. The new “health mania”

Talking Point: Health concerns are rising and health awareness is growing among Canadian consumers and will continue to accelerate as the population ages, with 25% of the population over the age of 65 by 2031. Consumers now look for products and services to help them maintain and improve their health, changing the type of products they purchase for their families, the sports they play, and how they spend their leisure time. The demand for health and wellness-related products is increasing rapidly, and 31% of Canadians are willing to pay a premium for health-enhancing products. Companies that can adapt their products to these growing health concerns are likely to generate positive reactions from customers and position themselves favourably in the marketplace.

4. The “Made in Canada” advantage

Talking Point: Social and environmental concerns have become increasingly influential in consumers’ purchasing decisions, and corporate social responsibility has become a prerequisite for the majority of Canadians who want to know that companies adopt high ethical and green standards throughout their value chain. A majority of Canadians now make an effort to buy local or Canadian-made products and some are willing to pay a premium. Small business should highlight the local characteristics of their products. Even if not made locally, business should emphasize other local features of the value chain, such as research and development, product design or product assembly.

Of all the consumer trends, the buy-local movement has been the most powerful. Close to two-thirds of Canadians say they have made an effort to buy local or Canadian-made products in the past year, and two in five consider local production an important factor in their buying decision.

“The ‘Made in Canada’ brand is powerful because Canadians have clear understanding of what buying locally made products means to the national economy”

The research shows that consumers who buy local do so for economic reasons: 97% of Canadians do it to support the local economy, 96% do it to support local farmers and 93% do it to create local jobs, while 87% think it is better for the environment. Quebecers and Atlantic Canadians are the most faithful users of locally made products, with roughly three-quarters indicating they recently bought products made in Canada; consumers in Saskatchewan and Manitoba are the least likely to do so.

5. Customization is King

Talking Point: Consumers are increasingly looking for custom-made solutions that fit their specific needs, becoming more engaged in product creation. Many companies are expanding their product lines to better address consumer preferences. Others have developed “mass customization” techniques, which deliver tailor-made solutions at prices and lead times that match traditional. “Consumers want personalized, high-quality products at reasonable prices and are using many penny-pinching strategies like group couponing to get more bang for their buck.”

6. Mass-produced Products

Talking Point: For example, a German business mixes and sells customized cereals online to reflect factors such as customers’ allergies, special diets, athletic needs and varied tastes. Nimble business can leverage both approaches—designing niche products and empowering their customer base—to compete with large producers, increase their margins and minimize product development risks.

7. The lingering effects of the recession

Talking Point: Certain consumer habits that arose during the 2007–08 recession are becoming the new standard. Consumers expect quality at a low cost, and are interested in pricing models based on use rather than ownership.


References: http://www.bdc.ca/Resources%20Manager/study_2013/consumer_trends_BDC_report.pdf, http://www.bdc.ca/EN/about/mediaroom/news_releases/Pages/entrepreneurs_must_watch_consumer_trends.aspx

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