Kathleen Polsinello is the head of Boston Consulting Group in Canada and a core member of the firm’s global Consumer practice. In addition to leading the Canadian business for the Calgary, Toronto, and Montreal offices, she is a member of the North American Management Team. She works primarily with retail clients on commercial, operations, and organization topics.
Since joining BCG in 2006, Kathleen has worked with a wide range of clients in Canada, the UK, and the US. She has extensive experience leading food and general merchandise retail leadership teams through large-scale business transformations, and has worked on strategies in growth, customer segmentation, format design, pricing and promotions, organization, and target operating model.
During her time at BCG, Kathleen has taken on several firm leadership roles focused on people and career development. Prior to leading the Canada system, she led the Toronto office, the Consumer practice in Canada and the Women@BCG initiative in Canada. She has published and spoken extensively on consumer sentiment and its implications on buying behavior, as well as on diversity, equity, and inclusion (DE&I) topics focused on the advancement of women in the corporate world.
Outside of BCG, Kathleen sits on the boards of the Canadian Club of Toronto, Enterprises Norman Hebert Inc., and the Whitney Child Centre. She is also a member of the Business Council of Toronto, an executive table of Canadian CEOs focused on galvanizing industry and government into action on the Canadian productivity gap.
As we approach the 2024 holiday shopping season, what are the top three consumer trends emerging in Canada?
This season, tech is changing how Canadians shop. According to BCG’s latest report on Canadian consumer sentiment, 87% of Canadians plan to make at least some of their purchases online, with nearly half intending to shop exclusively on digital platforms. This shift is happening across all age groups, and it’s only accelerating. On top of that, emerging tech like generative AI is playing a bigger role. About 34% of Canadians are already using or planning to use AI to find deals and compare products.
Beyond the tech-driven shift, there’s also a major shift in consumer behavior due to ongoing cost-of-living pressures. That means that Canadians are getting more conscious about where their money goes, prioritizing essentials and looking for value, no matter their income level.
How has the cost-of-living crisis changed Canadian shopping habits?
Even with the rising cost of living, Canadians are not just participating in this year’s sales events – they’re planning to spend more. On average, consumers are anticipated to spend $445 during these events, reflecting a 7% increase compared to 2023. But the way they’re spending is changing. More than half of Canadians are cutting back on non-essentials – like clothing, electronics, and dining out – so they can save for essential items.
This shift is happening across all income levels. For instance, lower-income and middle-income households are saving by cutting back on outings and unnecessary purchases, while higher-income groups are more likely to shop based on discounts and promotions. So, while overall spending might rise, Canadians are being more selective and strategic in where they allocate their dollars.
For small and medium-sized businesses, this is an opportunity to connect directly with consumers by making them feel heard – whether that’s by offering clear promotions or making shopping easier through flexible payment options. Businesses that can show consumers they’re getting good value, even in this climate, will be in a better position to thrive.
Artificial intelligence is transforming industries across the board. How does BCG envision AI influencing retail operations and consumer engagement in Canada over the next decade?
At BCG, we see artificial intelligence as a game-changer for the retail industry, with its potential to reshape both how consumers shop and how retailers operate. AI is already influencing Canadian shoppers’ behavior. Like I mentioned, our research shows that 34% of Canadians are using or planning to use generative AI to find the best deals, and nearly 1 in 5 Gen Z shoppers have already integrated AI into their shopping experience.
What’s particularly striking is that 81% of those who’ve used AI found it helpful. This presents a major opportunity for retailers to enhance the shopping experience by making it more personalized and efficient. While we don’t have a crystal ball, we believe that AI will be at the core of every future retail transformation, and retailers must be ready for that future.
What unique challenges and opportunities does the Canadian retail sector face in connecting with consumers, and what strategies can businesses use to build lasting relationships with their audience?
The Canadian retail sector is facing a highly competitive environment. While awareness of major sales events like Black Friday remains high – 95% of Canadians are aware of Black Friday – shoppers have become more selective and value-driven in their purchases. With a large percentage of consumers expecting deep discounts, retailers must work harder to meet rising consumer expectations, especially in a market where online shopping dominates and price comparison is just a click away.
One of the biggest challenges for retailers is standing out amid this growing competition. Price transparency and clear communication about deals and discounts are essential. Canadians are increasingly using AI tools to compare prices, so retailers need to ensure their offerings are easy to find and clearly presented.
Despite these challenges, there are significant opportunities for growth, particularly by embracing digital engagement. Canadians are increasingly looking for personalized shopping experiences, and retailers who can deliver tailored recommendations, discounts, and promotions will build stronger connections with consumers.
Looking ahead, how do you see global economic trends shaping the Canadian retail landscape, and what advice would you offer to SMBs preparing for these changes?
It’s hard to say what the future holds, but the ongoing inflation concerns in Canada will likely keep driving consumers toward more value-conscious and digital-first shopping habits. With 85% of Canadians expecting inflation to stick around, shoppers will keep focusing on deals and discounts, especially during major sales events like Black Friday. But for small and medium-sized businesses this also presents an opportunity. The key for SMBs is to start early and innovate. The rise of AI tools levels the playing field, allowing small businesses to personalize the shopping experience and better compete with bigger players.
In short: SMBs that focus on value, tech, and timing will stay ahead of the game.
