In this podcast episode, Jack Blackwell, CPABC’s economist, speaks with Paulina Prokop, CPA, CA, Assurance Partner at PwC Canada, about the PwC Voice of the Consumer report and what is important to consumers in 2024. Part of our Coffee Chats with CPABC podcast series.
To help companies and brands better understand customers’ evolving mindsets, PwC surveyed 20,662 consumers around the world, including 1,005 in Canada, earlier this year. PwC Canada’s recently released annual Voice of the Consumer (VoC) report shares insights on consumer influences, their views of emerging retail technologies and how their shopping habits reflect sustainability priorities. The 2024 edition finds that inflation was the number one concern among Canadians, surpassing other concerns such as economic volatility and health risks.
The report also explores trending topics, such as sustainability, consumer trust, and incorporating generative AI into the customer experience.
Can you walk us through some of the main themes from this year's report?
Paulina: Inflationary concerns continue to be top of mind for many consumers. Our latest survey of Canadian consumers found almost half of respondents ranked inflation as the top threat, surpassing other concerns such as economic volatility and also health risks.
The second theme that stood out to me is despite the inflationary concerns, consumers will pay a premium for sustainable products if they see that improved value. Consumer trust also came through as a big theme.
What can companies do to build trust and loyalty with consumers? What factors do consumers care about when they view a company as trustworthy or not?
Paulina: It’s interesting that more than 80% of the respondents cited protection of their personal data as a critical factor. Companies across industries really need to reassure customers that their personal data is secure. An overwhelming 87% of Canadian consumers are concerned AI development can infringe on their personal and data privacy, a relatively consistent sentiment across generations.
Do consumers care about generative AI? And should retailers be thinking more about how they can incorporate it into their customer experience?
Paulina: Only 39% of consumers are willing to share their data to receive a more personalized service or experience. But I do think there is opportunity for retailers to use Gen AI for their customer experience. What we've seen is that many brands are exploring how Gen AI can power more effective customer service chatbots.
From a consumer perspective, how should retailers be approaching the conversation about climate?
Paulina: Climate and ESG is a huge topic and it's been coming up a lot with many of my clients. It wasn’t surprising when I read the survey that 82% of Canadian consumers are noticing climate-related disruptions in their day-to-day lives. And again, 80% are worried about climate change to some degree. For brands and companies, this does represent an important opportunity to align their values with those of their most climate conscious consumers.
The survey also found that consumers are taking action to reduce their impact on climate change. Four in 10 Canadian consumers, or about 46% globally, are buying more sustainably made products. This includes products made with recycled, natural, or second-hand materials and less plastics.
For retailers, how much does adopting climate friendly impact business success and are companies actually seeing that benefit?
Paulina: PwC publishes an annual CEO survey, and what we found is that there are profit increases for companies that reinvent their processes to be more environmentally friendly. So nationally, from a consumer side of things, many consumers will pay an above average price for sustainably made goods. Canadian consumers will pay an extra 6.9% for sustainably made goods. One in five would even pay a premium of 10% or more.
We did ask consumers, what information about a brand sustainability, performance, and practices would make them want to buy more from a company? And what they told us is that those highly visible factors, such as either waste reduction, recycling, and eco-friendly packaging, to them are more influential than specific reporting initiatives, such as showing community engagement.
What do you think are the main takeaways that retailers and consumer companies need to think about?
Paulina: For me there were two key takeaways. The first one is around generative AI - it is a very powerful and exciting tool. Yet at the same time, consumers are telling us that they want that in-person social connectivity. It is about integrating the technology with that human element and really being human-led and tech-powered.
The second takeaway is about building consumer trust through both strong data governance and sustainability practices. I talked about how greater trust means greater rewards when it comes to consumer spending and that, despite the inflationary pressures, consumers are still willing to pay that premium for sustainable products.
Jack Blackwell is CPABC's economist
