At a time when many retailers are downsizing stores or going completely virtual, Canadian Tire is trying to weave some digital reinforcement into the foundations of its physical stores without shutting them down.
“Retail is no longer bricks-and-mortar, it’s omni-channel,” said TJ Flood, senior VP of marketing at Canadian Tire during a retail sector event hosted Tuesday by Google Canada in Toronto.
Flood then detailed the ways Canadian Tire is attempting to capitalize on the growing role of digital technology in shopping. Although it lagged behind competitors in getting onboard e-commerce, Canadian Tire now allows customers to buy goods online. Shoppers can use its mobile app to find the exact location of items inside the stores.
A digital version of Canadian Tire money can be collected and redeemed via a loyalty card or mobile app. And geotargeting technology notifies Canadian Tire customers via their phones how close they are to the nearest store, driving directions to get there and how many Canadian Tire loyalty points they have.
In May, the retailer opened Digital Garage, its second innovation lab in the Kitchener-Waterloo, Ont. area to house the development of apps as well as new in-store and online technologies. That follows last year’s opening of Cloud Nine, a 28,000-sq.-ft. data centre, development and testing lab in Winnipeg that boosted Canadian Tire’s computing power by 20 times and its network bandwidth by 10 times.
It’s all part of a plan outlined by CEO Michael Medline at the firm’s last annual general meeting “to establish Canadian Tire as a world-class leader in innovation and digital,” a goal he dubbed his “single biggest priority.”
Canadian Tire focuses on young, active families whose lives have become incredibly busy, Flood told the Toronto audience.
“Their shopping habits have changed dramatically and become much more mobile,” Flood said. “We have to figure out how to accommodate that busy schedule.”
While digital is playing a bigger role in accommodating those busy customers, the company isn’t ready to ditch some of the more traditional aspects of its strategy just yet.
Rather than downsizing stores or closing them down, Canadian Tire is actually boosting its physical retail capacity by 400,000 square feet after buying out leases on 12 former Target Corp. spaces in Canada for $17.7 million. In June, the company also opened the doors to its largest ever store, this one measuring a monster 140,000 square feet. Although the mega-store features virtual reality simulators so shoppers can test drive tires and design their perfect backyard patio, its sheer size sticks out in a retail landscape that increasingly caters to online rather than in-store purchasing.
Although Target, Black’s Photography and Future Shop have all closed their doors in Canada recently, there is some traction in the bricks-and-mortar side of the business. Indigo Books & Music Inc. saw its in-store traffic rise two per cent and its same-store sales increase 6.5 per cent during its last fiscal year. Those figures may suggest Indigo’s emphasis on closing under-performing locations, expanding merchandise categories and improving customer experience at its remaining shops is finding favour with consumers. CEO Heather Reisman recently said Indigo might even open stores in the U.S. market.
While Canadian Tire is embracing new digital trends, it does so while incorporating them with more traditional approaches.
Exhibit A: although customers can purchase items directly from the Canadian Tire website, they still have to pick them up from their nearest store because the chain doesn’t offer delivery. It may seem antiquated in an era when Amazon is testing delivery via drones, but Flood said ‘click-and-collect’ is convenient for shoppers because most live close to a Canadian Tire store.
“One of our biggest strengths for Canadians is that we’re accessible. We’ve got 490 stores around the country. About 90 per cent of the population lives within a 15-minute drive of a Canadian Tire. So it allows us to offer the folks who love to shop at Canadian Tire another way to shop at Canadian Tire.”
Exhibit B: while many retailers leave it to customers to post their own product reviews online, Canadian Tire has assembled an army of 15,000 Canadian consumers (unpaid volunteers, no less) to really put its products through the wringer. Only products rated highly by these testers nab Canadian Tire’s Tested For Life in Canada seal of approval. Customers can still post regular online reviews but the testing boosts trust in digital ratings during an age when online anonymity has somewhat eroded it, Flood said.
“Given the migration to a digital environment, authenticity is massive,” he said. “If you see a product with a Canadian Tire Tested For Life badge on it, it’s because real Canadians have tested it and given it a four- or five-star rating.”
The retailer’s reluctance to abandon bricks-and-mortar stores (and retire its remaining paper money featuring that Sandy McTire character) both complemented and contrasted with new research presented by Google at Tuesday’s event:
- the number of shopping searches coming from smartphones has jumped by 115 per cent during the past year globally
- 38 per cent of Canadians report having made a purchase in their kitchen
- 24 per cent have made one from their car
- 70 per cent of Canadian smartphone users consult their phones while in a store; one-fifth of those users watch a video related to their purchase
- 70 per cent of Canadians who watch online video watch it prior to making a purchase
