The Importance of your People and Teams in the Canadian Retail Landscape

The Canadian retail landscape is hyper competitive.  The future is foggy at best. Numerous macro and micro environmental factors are at play that will certainly impact where retailers will land – in fact, their very survival depends on it.

The intensity of competition is accelerating rapidly as global retailers have set their sights on the Canadian Consumer.

It started with the U.S. big box stores in 1980’s followed by specialty stores. In 2002 – U.S. retailers had 30% of Canadian Market Share and prior to Targets’ pull out an estimated 50% share in 2015.

Why?

The retail market in Canada appears to be underdeveloped compared to U.S. market – approximately 14 sq. ft. of retail per capita vs. 23 sq. ft. in U.S. - population is the key. Total retail sales per capita in Canada are close to matching U.S. but this is where the opportunity lies --- driving Canadian average sales per square foot to almost double that of the US.

While all these factors are at play, in a commoditized, digital world, people are still the key to differentiate and win. People are what can differentiate a retailer and create value for consumers – beyond price.

Let’s have a look at what’s taking place.

 

The American Invasion

The intensity of competition in the Canadian retail landscape is accelerating rapidly. It’s a well know fact that U.S. retailers have set their sights on the Canadian Consumer as noted above. Several retailers have tried to conquer the landscape North of the 49th, and even with huge reserves of resources, they didn’t succeed. Consumers, vendors, suppliers and the economy are still feeling the sting of Targets retreat. Canadians expectations were high for Targets 133 stores. They knew what to expect from the U.S. brand, but Target Canada did not deliver on those expectations and experiences resulting in insufficient stock and higher prices. Creating a very slippery slope but great learning curve for other U.S. retailers.

And Target’s not the only U.S. retailer to pack up and head home –other notable failed endeavors include:  Sony, RadioShack, Kmart, Big Lots/Liquidation world, Sam’s Club, Columbia House.

Saks and Nordstrom are two notable U.S. retailers with Canadian expansion plans.

Nordstrom opened its first store in Calgary, Alberta – and will follow with stores in Vancouver, Ottawa and Toronto area by 2017. Saks Fifth Avenue is following suit by opening up in Canada in 2016.  These retailers have chosen the route of a very slow, deliberate expansion rate and learn the nuances of the Canadian marketplace by opening each individual store by store to thoroughly understand their needs, wants, expectations of their target demographics. It’s crucial that their staff fully understand the vision, mission and value proposition of their banner and more so be able to effectively engage, communicate and deliver an exceptional experience.

 

Advancement Of Digital and E-Commerce

The shift to an online world has changed the behavior of customers, affected their path to purchase and has changed their expectations. Consumers are conducting online research before buying products, are using the Internet to find out where to buy, compare prices while at the same time looking at reviews from other consumers – all of which leads to a decision to purchase or not. An online presence and even e-commerce are mandatory for retailers today.

With e-commerce growth, retailers need to have a fully integrated marketing communications message at every touch point along the path to purchase. While digital challenges bricks and mortar, retailers continue to search for the optimal balance – Canadians still like to shop and they like the experience of shopping.

So, once again the catalyst is people.  Store staff must deliver the same message and consistent experience that customers experience along the new path to purchase.

On top of these factors, retailers are also facing:

• Consolidation - last year, Loblaw’s acquired Shoppers Drug Mart creating the largest grocer and pharmacy chain in Canada. Additionally, Sobeys Empire Group acquired Safeway. Mergers and Acquisitions are creating fewer but bigger players in the retail landscape.  There is even greater pressure for retailers to segment, target, create a point of differentiation and own a unique position in the consumers mind.

IKEA is a great example of being unique from other retailers – the IKEA Concept. IKEA offers a distinctive showroom and also a cafeteria. IKEA targets young people and families with their products that are very basic and cost friendly. IKEA has influenced other retailers by doing this inexpensive, cool merchandise but that won’t break the bank.  IKEA offers augmented reality within its catalog.  Proving that the catalog isn’t dead. You are able to place IKEA furniture in your home by using the catalog app. Their catalog also provides consumers with a page turning story while showcasing their products beyond what they would be able to a television commercial.

Walmart, Canadian Tire and Costco have also clearly differentiated themselves in the minds of consumers.

• Loyalty Programs – 9/10 Canadians participate in loyalty programs – retailers want you shopping regularly at their stores. Customized loyalty programs provide incentives for shoppers but truly, retailers are gathering valuable information about you.  Gaining valuable data allows retailers to customize programs relevant to their shoppers. This is a very strong competitive advantage.   

So, what is the key to winning at retail? Take note retailers - it’s about creating value beyond price. How can a retailer achieve this? Through passionate, engaged, trained PEOPLE!

POPAI (The global association for marketing at retail) says that 65%-70% of decisions are made in a store. Can this number even be higher if retail sales staff is passionate and trained?

Interestingly, experience is still critical for sales, and we are seeing a resurgence of independent boutiques. Boutiques are growing because they have very focused lines, but more importantly, the staff knows their product lines intimately. Even take a look at New Balance and the Running Room – the staff are well-educated staff and ready to help you out with all the needs you may need. The result is personalized service and great shopping experiences that will make you want you to come back, and recommend to friends. They have also created engaged, informative communities.

The key message – empower your people to thrive.  Provide them the tools and training to enhance the customer’s experience. Bringing your vision and mission to life will provide a platform to compete beyond price. Your people will truly differentiate you in the marketplace.

Now it’s up to you. I hear the registers ringing!

 

At BLUEPRINCE,

“We empower people and teams to thrive."

Working with some of the world’s best-known companies and small - midsize family run businesses we provide tools and training to help people thrive professionally and personally. Helping people grow drives overall growth. In addition to managing, inspiring and coaching an outsourced sales team for a Fortune Top 35 client, we recently we helped a client communicate and relay his vision and mission to his franchisee ownership team resulting in a unified corporate sale of his company. We also helped a family run business create a customized sales process with coaching to significantly exceed revenue targets.

The landscape is competitive; your people are the difference. 

 

 

Source: Deloitte - The World is Coming. The Global Challenge of Retailing in Canada.

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