Canadian Tire rolls out online and store upgrades
TORONTO — As retail skirmishes follow consumers back and forth from the big- box mall to the mobile phone, Canadian Tire is banking heavily on digital commerce so it doesn’t get left behind.
Putting money into an evolving way of shopping can be tricky for retailers needing to continually re- invest and support overhead costs of a massive store network, president Mike Medline said Thursday after a meeting of industry analysts in Toronto, at which executives announced the company’s new three- year strategic growth plan.
“When we get better at ecommerce, the goal is to not cannibalize our own business, it’s to take other peoples’ business and grow ( Canadian Tire’s) business,” he said after announcing Canadian Tire will spend an average of $ 575 million a year on digital technology and store upgrades from 2015 to 2017. “You have to be good at both, and they augment each other.
“The one thing you can’t do is put your head in the sand and pretend it’s all going to slow down, because it is only going to accelerate. Online will get bigger and stronger and more important to our customers, and you can be one of the first to get great at it, or you can choose to be a laggard, at which point it is not a competitive advantage, and you lose.”
Medline, who will take over as CEO from Stephen Wetmore in December, believes it is possible for the 490- store chain to increase its digital sales as well as its square footage, even as box retailers such as Future Shop, Staples and Toys R Us shrink their overall store footprint. Square footage at Canadian Tire’s retail operation will grow one per cent per year in the next three years and locations still have an average size of 41,000 square feet.
“Unlike some big- box retailers, we did not overgrow our stores,” he said, adding Canadian Tire was fortunate to have backroom storage space to accommodate the customer pickup model for online sales.
Canadian Tire has spent the past three years aggressively pulling itself out of the digital wilderness after it axed its first online shopping website in 2009 due to poor sales. The company began a cautious ecommerce foray again in 2011 with online tire sales before its reboot last year on a more thorough and modern Canadian Tire website offering in- store pickup of goods for customers.
The retailer also began experimenting with digital flyers and interactive social media advertising, and launched a digital research hub in Waterloo, Ont., to liaise with new customer tools such as a shopping app and digital tablets and screens in stores. “We believe close to a majority of our customers go online before they come into our stores,” Medline said.
At the same time, Canadian Tire has been ramping up the wow factor of shopping by integrating it with digital technology at certain flagship stores because shopping is still an inherently social activity that people enjoy, he said.
This year Sport Chek opened an 80,000- square- foot retail store at the West Edmonton Mall with 800 in- store screens showing 240 channels of digital content. The retailer has also struck a deal with sports network TSN to develop and produce content for Canadian Tire’s traditional and digital flyers, online advertising and in- store advertising.
Additional digital media goals announced Thursday include redoubling Canadian Tire’s efforts to target young families to its stores with special offers on products they buy heavily — sporting and outdoor goods, housewares and small appliances. Mark’s, which has the bulk of its customers in the 50- 65 age range, will begin targeting those in the 35- 50 age set.
Attracting digitally- savvy target customers has been a critical factor behind its FGL Sports division’s 12 consecutive quarters of same- store sales growth. On Thursday, its Sport Chek banner announced a partnership with the Scene loyalty card program run by Cineplex and Scotiabank, which bought a 20 per cent stake in Canadian Tire’s financial services business this year for $ 500 million. Scene will launch nationally at more than 180 Sport Chek stores next month, allowing customers to redeem Scene points for merchandise such as Nike running shoes.