By admin | December 8, 2013
This year, retailers are poised to offer the latest merchandise offerings over the holiday season for consumers searching for unique, one-of-a-kind or traditional gifts for loved ones. Retailers are ready to offer customers many deals as items are made available either in-store or online.
With so much selection out there, how do consumers decide where to allocate their dollars for Christmas gifts? Some companies have stepped up their offerings to compete for consumers’ holiday dollars.
There are a variety of different categories that consumers spend money on for the holidays. Some of these categories include toys, electronics, housewares, fashion, health & beauty and food. But perhaps some of the most popular items during the holidays are toys and electronics.
Some of the popular toys this season include robotic pets such as the unique robo fish, teenage mutant ninja turtles, a newer version LeapFrog, toys from the new Disney movie Frozen, Monster High dolls and the ever-popular traditional toys.
Electronics are always a major selling category and in the last few years this category has been dominated with wide-screen TV’s, smartphones, tablets and ereaders. But with the proliferation of these products, this year the category is turning towards newer version game consoles such as the Xbox One and the Play Station 4.
As consumers are deciding what to buy they are also using different forums to buy products. Bricks-and-mortar store shopping continues to dominate, but online shopping is slowly starting to gain momentum in Canada.
According to the Deloitte 2013 Holiday retail outlook, more than ¼ (27.9%) of Canadian shoppers prefer shopping online as opposed to going to the mall. These shoppers are using websites, blogs and social media more and more.
Report findings suggest that this season 18.9% of Canadians will spend their holiday budget online and Canadians in higher income tax brackets are expected to spend almost 25% of their shopping online.
Canadians are primarily concerned with high shipping costs of online products and Forrester Research reports that as much as 68% of Canadians regard shipping costs as a major determinant in online purchasing. Canadians are also concerned with competitive pricing and selections.
According to Forrester, online sales in Canada are forecast to reach $34 billion or 8.0% of the retail sales market by 2018 and leading the charge is a company we are very familiar with called Amazon.
The following retailers are considered to be some of the current leaders in the world of online retailing at the current time within Canada and can be looked towards for some of those hot holiday deals for the 2013 holiday season.
Top Holiday Selling Websites In Canada:
Amazon entered Canada in 2002 as a rival to Chapter’s Indigo. The company started off slowly adding different categories along the way. Currently, the company offers entertainment, electronics, tools, beauty, household goods, pet care, lawn & garden, luggage and the new and very popular toy category. The Canadian website features 300,000 toys for kids from infants to teenagers. Free shipping is offered on orders over $25.
As a rival to Amazon, this company has done well within the Canadian market. In addition to a host of online books, the company has diversified its product channels to offer many unique and interesting toys, lifestyle and other products. Free shipping is offered on orders over $25.
This company is known to offer some of the best online technology deals as well as appliances, health, home and toy products. Whether you are looking for the latest tablet, wide-screen TV, camera or espresso maker, this company is sure to have a product available online to fit your needs. Free shipping is offered on orders over $20.
The company relaunched its website this year just as Target was entering Canada and recently the company has increased its online offerings. Customers can find a wide array of products at Walmart.ca. A new flyer is featured that allows customers to purchase items from the flyer with a mobile device.
Even though this troubled company has dispelled rumors about it’s possible demise, it offers many different products to suit customers’ needs for the holiday season. A wide selection of toys and other offerings are available online or through the catalogue.
This company operates Gap, Old Navy and Banana Republic Stores. The company is doing it right by offering a wide selection online. Promotional codes are frequently posted on the website for usually between 15-40% savings. There are also good return policies with shoppers offered either free mail backs or physical store return policies. Shipping is free on orders over $50.
There are many other great sites available in Canada. For example, Joe Fresh recently launched its online site featuring a variety of cutting edge style clothes. Home Depot, Lowe’s and Costco also provide a comprehensive list of products.
Over the next few years, Canadian companies will start to offer more and more products for customers available online. But for now, customers can start to browse the sites such as the ones listed to start becoming more familiar with online shopping in Canada.
Enjoy the holidays and don’t let the long lines get you down!
By admin | December 1, 2013
One of our Agents commuting on the Canada Line in Vancouver spotted this virtual toy store which is the second-evolution of the partnership between toy-maker Mattel and Walmart’s on-line business.
While the sales are likely a “blip” for Mattel in the grand scheme of things, this early partnership with Walmart Canada will likely pay dividends for future holiday campaigns.
By admin | December 1, 2013
Loblaw has expanded its PC Plus rewards program presence by rolling out the program across Canada. Earlier, the company started the program at 44 Ontario stores in May of this year.
The new program features the PC Plus app that provides customers with individualized offers and points are earned that can be put towards dollars off of your grocery bill. Complex algorithms that analyze previous purchase behavior and then provide individualized offers based on these previous purchases accomplish this.
For example, if a customer usually buys Palmolive dish detergent every 3 weeks, the app might send the customer a coupon in the third week, in order to purchase the dish detergent at a discount.
The PC plus rewards program goes beyond traditional loyalty card programs by specifically individualizing offers for each customer. In fact, it truly taps in to the mobile phone and new technology market by creating these types of offers.
The app also creates individualized menu plan ideas and recipes based off of what customers buy and even helps customers navigate and find items throughout the store with their specific grocery list. Loblaw CEO Galen Weston says “It’s sort of like having your own personal flyer.”
When customers click on a recipe they like, the customer is then given the option to add the items in the recipe to the grocery list. The ease and functionality of this takes grocery shopping to a new level.
Canadian Grocer reports that at a conference call this month following third quarter results, Loblaw’s president Vicente Trius said PC Plus “is performing beyond our expectations” and is looking to be a real “game-changer.”
The site also provides various meal plan ideas. Meal suggestions can be customized to what customers buy the most and/or what is on sale in the current week.
The shopping list feature allows customers to enter items into the shopping list and designates quantities and departments (eg. produce or dairy). Weekly sale items are added to the bottom of each department on the list so that customers can clearly see what is currently on sale. This feature provides a simpler and more convenient way to track sale items as compared to fliers.
If the nationwide program is indicative of preliminary results, it should be a success for Loblaw. Mobile phones are becoming more widespread and consumers will be looking to their phones to assist with buying purchases and decisions. The PC Plus program will tap into this need while at the same time continuing to provide relevant and individual information and offers.
By admin | November 16, 2013
In the past we have been somewhat critical of Shoppers Drug Mart’s efforts in the food category, especially when it comes to its over abundance of private label offerings in such a small overall assortment.
We recently observed the “Fall Baking” display shown here at a SDM store and it did strike us as a mini “one-stop-shop”, if only you were in dire need of doing baking at a moments notice (when all the grocery stores were closed).
The thinking behind the displayer is bang on (other retailers should really take note) but the offering itself seems disjointed from the overall positioning of SDM stores as destinations for Health & Wellness.
It will be interesting to see the influence of Loblaw on the food offering at SDM. We expect that it may become more of a focus at SDM, but will likely be play a clearer role in the overall offering at SDM. Watch for President’s Choice to play a predominant role.
By admin | November 3, 2013
Old brands never die. Frequently they seem to end up as retro t-shirts which seem to be all the rage these days.
We spotted this ad in Saturday’s Globe & Mail where someone is trying to breathe new life into Dylex’s old discount brand BiWay.
With all the news about e-commerce maybe BiWay will live again!
By admin | September 29, 2013
Calgary Co-op recently unveiled its new, state-of-the-art designed grocery store in North Calgary. This store is the model for future renovations and expansions in its Calgary stores.
We wanted to see what all the buzz was about and we sent a Field Agent to this store to gather a few photos so we could take you inside this newest Co-op venture.
Co-op conducted significant market research internationally and across North America and came up with a model that differentiates itself by offering fresh, local products and a variety of specialty services.
Calgary Co-op has 24 supermarkets and is one of the largest retail co-operatives in North America. With over 440,000 members, 3600 employees and annual sales of just over $1 billion.
Calgary Co-op is a member of Federated Cooperatives Ltd. with approximately 230 retail Co-op stores across Western Canada. Total retail sales are in excess of $8.8 billion.
Download our full report HERE
By admin | September 15, 2013
I must confess I did not step inside many retail stores this summer except for my weekly trips to the grocery store and the odd items I needed to pick up from different retailers. Instead, I spent the summer enjoying the weather and spending time with my kids in various summer spots across Alberta and British Columbia as well as a jaunt down into Idaho.
However, in late August I made a trip to Winners and was surprised to see two racks of Halloween costumes that were already being picked over. Halloween? It hadn’t occurred to me that Halloween costumes were already being sought out and sold to customers. The thought crossed my mind that perhaps I should ask my kids if they wanted to come see these costumes before they sold out in August!
Every year retailers have been expanding the length of the seasonal creep by marketing holiday products earlier and earlier to increase profits. This way, retailers can take advantage of the commercialized holiday and resultant heavier shopping.
Of course, we all like to complain about how early merchandise is showing up for sale by not allowing us to have a break in between holidays. Or rather, we are forced to start thinking about the next holiday or season before the current one is even over.
Christmas trees appeared at Costco in August and the Club retailers has probably been one of the biggest drivers of seasonal creep with their “treasure hunt” approach which encourages members to get it while supplies last.
Recently the back-to-school faded right into Halloween displays which will melt right into Christmas displays.
But as much as we like to complain, are shoppers really opposed to it?
Last year, Target ran holiday ads in mid-October and had Festive Christmas merchandise right alongside Halloween displays. The perception Target had among moms rose after its Christmas holiday ad aired in October, which leads many to believe that seasonal creep is not as widely disliked as thought.
Nearly 4 in 10 parents with children under 18 begin holiday shopping before November according to couponing website RetailMeNot.com
According to Ali Lipson, Mintel retail and apparel analyst, retailers are competing for higher sales dollars by trying to be the first to provide merchandise to customers. She says, “They want to get ahead of competition by starting to sell items in advance of when others might typically do so.” Also, “… in terms of holiday shopping we’ve seen the deals and promotions start earlier and earlier each year, again aiming to be top of mind among consumers.”
Since Wal-Mart and Lowe’s pioneered seasonal creep by offering Christmas merchandise for sale in October, every holiday and season has experienced more of the creep. Back-to-school creep occurred this summer when retailers started offering back-to-school products the week after school got out instead of the traditional late July and early August.
In the US, Black Friday kicks off the popular holiday selling season ending with Christmas. The holiday has seen its fair share of holiday creep as opening times have been moving earlier and earlier.
In the past, stores have traditionally been closed on Thanksgiving and open the next day on Black Friday, the busiest shopping day of the year. But, stores have started opening up earlier to take bigger slices of the retail pie for this important shopping day.
Brad Wilson, CEO of BradDeals.com reflected on the changes in the industry when he said “As recently as 2009, we didn’t even launch our Black Friday site until early November. In 2013, we’d miss half the season if we did that.”
In 2011, several retailers including Target, Kohl’s, Macy’s and Best Buy opened at midnight for the first time. Last year, Wal-Mart opened up at 9:00pm on Thanksgiving Day and door buster deals started at 10:00pm. Sears also opened up at 8:00pm and Target opened up at 9:00pm. Clearly, the trend to now open up on Thanksgiving Day instead of waiting until the day after for Black Friday deals is clearly on its way.
Gap spokeswoman Liz Nunan says the company has been testing Thanksgiving hours for the last three years. The company had 1,100 stores open on Thanksgiving Day last year and the year before and Ms. Nunan says that the customer response is in favor of continuing.
Ellen Davis, VP of the National Retail Federation says, “About one quarter of all Black Friday shoppers were at the stores at or before midnight last year compared with just 3% in 2009.”
She also says “The customers are driving the bus.” Furthermore, “If customers weren’t shopping on Thanksgiving night retailers wouldn’t be open…some who didn’t open at midnight [last year] may feel they lost out on market share.”
Many retailers have been jumping on board to seasonal creep and some that haven’t may be left behind in the dust or may decide to jump in.
Maybe an extreme example from the US is the Kmart Christmas ads that are already appearing on TV:
To watch this video please click here.
It is clear that seasonal creep is here to stay and that it will continue to become a longer and longer season for each holiday or occasion involved. What does that mean for shoppers? We better get to the stores early if we want to be the first to take advantage of the deals before the best deals are gone!
By admin | August 31, 2013
Recently, market research firm, Forum Research, conducted a new customer satisfaction survey. Target came in last place in the survey as rated by Canadian consumers across the country.
Only 27% of those polled said they were “very satisfied” with the big-box retailer. The company has failed to meet the expectations of consumers as it has gone down in ratings since April when it received a rating of 32%.
Costco received the highest ratings at 62%, which was the same rating it received in April. The company appears to be making all the right moves, as consumers are very happy with company offerings.
Marshall’s increased in ratings from 24% in April and both Sears and Target declined.
The ratings were as follows:
Ogilvy – 59%
Wal-Mart – 40%
Hudson’s Bay – 40%
Winners – 35%
Marshall’s – 35%
Sears – 34%
Holt Renfrew – 32%
Target – 27%
If these results are any indication of where the company is currently at in Canada, it has much work to do to create a more favorable impression in consumers’ minds.
There was much build-up and hype on the impending arrival of Target earlier this year as the company opened the first three of its stores last March in Guelph, Fergus and Milton Ontario.
These three stores experienced very high demand and struggled to keep up with the pace as consumers were agitated with low inventory levels. The company had a hard time keeping store shelves stocked.
After this initial soft opening, the company had its official opening on April 5th. Additional stores opened up across the country and 124 stores in total will open by year-end. Additionally, 5 to 10 stores will open up each year to about 150 by 2017.
The two main causes of customer dissatisfaction of Target’s foray into Canada thus far appear to be the lack of inventory and the price differential between Target’s US and Canadian stores.
The company has cited an unexpectedly high level of demand as the reason for low inventory levels. It says consumers have a high interest in the new retail chain and the company needs time to catch up.
Indeed, after I went to find some summer water toys in my local Target store this summer, I was forced to go across the street to Wal-Mart to find stocked shelves as the Target I was at did not have much inventory.
President of Target Canada, Tony Fisher says the company’s Canadian prices are right on track and indeed are not as low as those at its US stores. He cites various reasons for the price differential including different transportation costs, distribution costs, fuel costs, wage rates, taxes and duties.
If consumers are discouraged by the difference in prices, he is encouraging consumers to still cross-border shop and stresses that the increased competition Target brings to the Canadian marketplace can result in better prices for consumers in the long run.
The company’s second quarter results indicate that apparel sales have exceeded expectations but food, health care and other high volume categories are sluggish. Q2 sales rang in at $275 million for its 68 stores while Q1 sales were $86 million based on 24 stores at the time. Sales have remained relatively the same over the two quarters.
The company says it will try and bring more customers into the store by focusing on high-frequency items. “We need to drive trips,” says Gregg Steinhafel, Target chief executive and chairman.
Steinhafel also said “As we monitor the economy and consumer sentiment, we continue to see a mix of signals in which emerging optimism is balanced with continuing challenges.”
Indeed the company is optimistic as it has high hopes for its RedCard loyalty program. Only 2.3% of sales in the second quarter were delivered through the RedCard program. That is in contrast to the US, where 18.7% of sales were on a RedCard debit or credit card. Target says that it typically sees a 50% increase in household spending after customers sign up for the program. Thus the company expects sales to increase once the RedCard program becomes more penetrated.
Amid the consumer research survey, the company has still done well as it is in the middle of a major national expansion. It has undertaken no small feat as it has built a supply chain with 3 distribution centers renovated 68 stores and trained thousands of employees.
By admin | August 14, 2013
I had this feeling when I saw this photo of Duncan Hines Frosting Creations which one of our Agents found in a Target store.
This neat new product provides a base white icing (on left) as well as color and flavor packets that can be purchased to customize your icing (and cake). Flavors include Bubble Gum, Caramel and Cotton Candy to name a few!
My similar idea came almost 15 years ago when I toiled for the Snuggle bear in the fabric softener category. Provide the base liquid and then scent packets so you can customize your clothes scent to your mood! Unfortunately it never made it past the gatekeepers…
Duncan Hines has tapped into the customization trend as well as maximizing the shelf space (and minimizing logistics costs) by having one base SKU and a wide range of light flavor packs which can be stacked in the custom merchandising rack (which we have also seen on-shelf in the main section at other retailers).
Are you hungry yet?
By admin | July 22, 2013
This past week Loblaw announced the historic purchase of 1,200-store pharmacy chain Shoppers Drug Mart for $12.4 billion. This is the largest Canadian acquisition year to date and propels the Canadian grocery store industry into further consolidation following on the heels of last months purchase of Safeway by Sobeys for $5.8 billion.
In a news conference, Loblaw executive chairman Galen Weston said, “This is a transaction about two complementary businesses.”
The two companies will continue to operate independently. Currently, Shoppers sells approximately $1 billion in groceries annually and executives anticipate the cross marketing of each company’s products.
Specifically, the President’s Choice and Blue Menu lines at Loblaw and the Life brand at Shoppers could begin to be sold across both sets of stores. Shoppers also carries lines Simply Food and Nativa Organics which we expect to be rationalized over the medium term as the economies of scale favor a President’s Choice and Life brand mix.
It is likely that in Loblaw stores we will see Exact and Teddy’s Choice be replaced by the Life brand equivalent, which have stronger equity. This will also aid in delivering supply chain efficiencies in HABA private label.
Another interesting cross-merchandising play will be Joe Fresh clothing (baby/children’s clothing in particular) at SDM. A great way to strengthen one-stop shopping for busy moms.
Shoppers Optimum with over 10 million active users is a key part of the acquisition. Both Optimum and the new PC Plus programs are expected to remain in place and cross marketing is between these programs as well.
Loblaw will see a significant increase in the pharmacy business that will poise the company well as the Canadian population continues to age and more and more seniors are in need of pharmaceuticals.
Loblaw will raise $500 million to finance the deal through the sale of new shares and says it doesn’t anticipate any store closings.
“We are changing the retail landscape in Canada,” said Weston. He also said the deal is about creating a Canadian “champion” specializing in health, wellness and nutrition.
This acquisition will immediately place Loblaw in the important small-urban sector where Shoppers has been gaining a foothold.
As the condo boom started to happen in urban centers access the country, higher density downtown areas started looking for smaller stores with a wide variety of merchandise. Proximity retailing is a strong global trend and will get a boost in Canada based on the Loblaw / Shoppers marriage.
The pharmacy chain has a strong presence in the downtown markets of major urban centers across Canada such as Toronto, Vancouver and Calgary.
Many Shoppers locations sit on prime real estate and these will likely be held in the recently formed Choice Properties Real Estate Investment Trust that contains the land that Loblaw stores are built upon.
Loblaw currently has over 1,000 stores and 134,000 employees while Shoppers has 1,242 stores and approximately 52,000 employees.
The newly combined company will see annual revenues of $42 billion, $3 billion in EBITDA and $1 billion in free cash flow. Loblaw expects to see $300 million in cost savings after three years.
For more about both companies download our Canadian Retailer Year In Review here.
The newly formed company will now compete more directly with other mass merchandisers like Wal-mart, Target and Costco in the combination of merchandise, pharmacy products and groceries being sold.
These mass merchandisers have been placing greater emphasis on their grocery sections lately according to David Soberman, professor of marketing Rotman School of Management, University of Toronto.
Wal-mart started selling groceries in Canada in 2006 and its current revenue will put it at approximately half of the newly combined Loblaw/SDM revenue.
The question remains whether or not further consolidation will happen in the grocery sector and according to equity analyst Bobby Hagedorn, Edward Jones St. Louis, “We’re seeing increased competition, but the growth really isn’t there, and that kind of lends itself to an acquisition-friendly environment.”
In the past, grocery retailer Metro has expressed interest in the purchase of pharmacy chain Jean-Coutu. However, this would place Metro’s future firmly in Quebec vs. expanding its footprint beyond Central Canada with another acquisition such as Overwaitea.
From a supplier perspective, it will be interesting to see how these brands manage the consolidation of their brand sales under one retailing organization. There are now many brands where over 50% of total sales will be made at a Loblaw/SDM banner store.
This may see suppliers invest more to support growth in other retailers such as Target, Costco and regional drug players (Rexall, Jean Coutu, Lawtons and London Drugs) in order to offset this consolidation and its potential risks.
Trade terms and business planning negotiations are in full swing for 2014 and suppliers will have to scale back vacations to ensure they thoroughly game plan and prepare their business plans or the upcoming year given these changes.
Further consolidation may be upon us and in the meantime, it will be interesting to see how Loblaw and Shoppers Drug Mart start to combine their product lines for customers as different products start appearing stores.