Sears Slashes Prices Continuing Its Sprint To The Bottom
By admin | February 17, 2012
Sears Canada announced this week that it would permanently cut the prices on 5,000 items by up to 30%.
Recently installed Sears Canada CEO, Calvin McDonald was quoted in the Globe & Mail as saying “Our customers are demanding great value every day of the week, Sears has a history of being known for great value across the store every day.”
http://www.theglobeandmail.com/globe-investor/sears-canada-slashes-prices-on-5000-items/article2340575/
Cutting prices may provide a short-term bump but we don’t think this is a wise spend of cash as Sears Canada’s revenues and profits continue to slide.
Here’s where Sears should be investing its margin during the turnaround:
Train Sears Staff – Sears store staff need to be more knowledgeable than its competitors’ staff. People are happy to pay more to get good service. This is why Safeway holds its market share in Western Canada in the face of RCSS and Walmart Supercentres. McDonald should take a page from Starbucks and close its stores for one evening and start with basic training for all staff and kick-start a service turnaround.
Be In-Stock – Sears is reminiscent of Canadian Tire in the 1990s and is continuously out-of-stock on key items, frustrating shoppers and resulting in under-performing sales both in-store and through its catalog / on-line operation. Refine the assortment and make a commitment to 100% in-stock on the same 5,000 items which were reduced in price this week.
Join The 21st Century – Sears heritage in catalog sales is one of its best assets that continues to go untapped. With a network of over 1800 catalog locations in every little town across Canada, Sears has a huge advantage over prominent in-line retailers such as Indigo and Amazon. We think that e-commerce could become the biggest and most profitable part of Sears Canada. Investing in a great website, mobile apps and free shipping to catalog locations could boost sales and bring in a new generation of shoppers that currently see Sears as their grandmother’s store.
These three initiatives would add more “value” to the Sears brand than a broad range of price cuts could ever achieve.
Price is not the only lever Canadian retailers can pull to compete with Target. They have to be excellent retailers and ensure the fundamentals of their value proposition are delivered to their shoppers each and every day. Sears (and many other Canadian retailers) have a lot of work left to do in the next 12 months.
Topics: February 2012 | No Comments »
SINS Canadian Retail Index – Week Ending February 10, 2012
By admin | February 11, 2012
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Canadian Retailers Valentines Day 2012
By admin | February 11, 2012
Valentine’s Day is one of the biggest gift-giving holidays of the year. The National Retail Federation’s (NRF) 2012 Valentine’s Day Study revealed that the average person will spend US$126.03 this year. This is the highest level in the last 10 years. The survey also revealed that in the United States consumers will spend $4.1 billion on jewelry, $1.8 billion on flowers, $1.5 billion on candy, $1.4 billion on clothing and $1.1 billion on gift cards.
In Canada, many retailers are offering a variety of Valentine’s promotions. Some of the many retailers offering promotions include Shoppers Drug Mart, Bath & Body Works, Fruits & Passion, The Body Shop, Claire’s, Hallmark, Purdy’s, Walmart, Chapters Indigo, La Vie En Rose and Apple.
According to Walmart Canada research data, 60 percent of Canadians will buy a Valentine’s Day gift. Moms will be buying for their entire families and men will do more last-minute shopping. Western Canadians will focus on romance by stocking up on rose petals and one of Eastern Canadians’ top gifts will be teddy bears.
The most popular gift ideas for the holiday include jewelry, flowers, chocolates/candy, teddy bears, wine and lingerie. But, other Valentine’s Day ideas have started to crop up in recent years.
Many restaurants are offering various heart-shaped foods. In fact, heart-shaped pizza has been gaining in popularity as Canadians are looking to unique ideas for celebrating.
Just this year, Doef’s Greenhouse in Lacombe, AB. has rolled out their very own heart-shaped cucumbers. These cucumbers will hit Save-On-Foods, Overwaitea and Safeway stores across Western Canada until February 14th.
Consumers have so many choices for celebrating Valentine’s Day with their loved ones. Although Valentine’s 2012 is already over for suppliers, it is time to think what sort of promotions, limited edition products or special offers your company can extend to drive incremental sales for Valentine’s Day 2013.
If heart shaped pizzas and cucumbers can make it on shelf you can probably find a unique angle on your products too!
Happy Valentine’s Day!
Topics: February 2012 | 1 Comment »
A Snapshot Of Deloitte’s Global Powers Of Retailing 2012
By admin | February 4, 2012
Deloitte recently published its Global Powers Of Retailing 2012 Report. This report provides a global retailing outlook, highlights key trends and analyzes the top 250 companies in global retailing. Five key trends were listed in the industry.
According to Deloitte, retailers will be continuing to look at entering emerging markets that are currently characterized by high growth. These emerging markets include areas such as Asia Pacific, Africa and South America. Acquiring desired real estate from local sources and tailoring stores to local needs will be important.
The second trend identified in the report is the use of multi-channel strategies. Retailers will be looking to develop innovative strategies that encompass mobile, social networking, the internet and the bricks-and-mortar store. Consumers are increasingly using these various platforms so companies must be proficient in these various areas.
Mobile was the third trend identified. The popularity of smartphones has been an area that retailers cannot ignore. According to Deloitte, they are “emerging as the most dominant consumer technology platform” (8). Also, “the ability to leverage mobile to deliver an improved customer experience will be a critical success factor” (Deloitte, 8). Retailers must try to develop usable and effective apps for these phones.
Data Analytics is another area that has vastly changed. As new channels continue to develop, more and more customer information is collected from these various channels. Analytics will be able to derive and analyze all of this information to improve customer offerings.
Lastly, the bricks-and-mortar store still remains the core of retailers’ operations. However, as multiple channel strategies are developed, retailers must adjust store-operating models as deemed fit to efficiently integrate all channels together.
Canadian retailers place in Deloitte’s report of the top 250 global retailers as measured by retail sales (US$m) has improved this year over last year. Actually, all of the 10 Canadian companies that made the list in 2012 improved their list ranking over last year.
Top honors for most improved list ranking year over year goes to Canadian Tire Corporation which bumped up to spot 118 from spot 127 last year. Jim Pattison Group and Rona also bumped up their list rankings by 8 spots to 205 and 235 respectively.
Loblaw had the highest retail sales of all Canadian companies on the list, and thus took the 39th spot. Sales were USD$21,782m and net income was USD$679m.
This was followed by Alimentation Couche-Tard Inc. (43rd), Empire Company Limited/Sobey’s (53rd), Metro Inc. (86th), Shoppers Drug Mart (93rd), Canadian Tire Corporation (118th), Katz Group Inc. (147th), Jim Pattison Group (205th), Liquor Control Board of Ontario (232nd) and Rona (235th).
Of notable mention, Alimentation Couche-Tard Inc. made the list of the 50 fastest growing retailers this year and last. Also, the Liquor Control Board of Ontario was a newcomer to the top 250 global list last year at spot number 237 and improved to spot 232 this year.
Nine out of ten of the Canadian companies have operations solely in Canada. Alimentation Couche-Tard Inc. is the only Canadian retailer with international operations in a total of 9 countries.
According to Deloitte, growth in 2012 is “likely to be slower than was experienced in 2011 in many of the world’s leading markets” (4).
Canadian retailers will have to utilize some or all of the key trends identified to remain competitive and improve sales and profits in 2012.
View full Deloitte report here.
Topics: February 2012 | No Comments »
SINS Canadian Retail Index – Week Ending February 3, 2012
By admin | February 4, 2012
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Big Box Retailers Should Think Small To Grow Sales
By admin | January 27, 2012
In the era of big box retailers, we have been provided with massive stores with a huge assortment of products and prices to fit almost every need. This strategy has proven to be successful for companies like Superstore and Walmart. But, there is a growing demand for something else. Consumers are looking for smaller!
Dollar stores have been capitalizing on their small store formats of low-priced items. These stores have proven to be very profitable ever since the recession hit and people started increasingly looking for low cost alternatives. Walmart was no longer the only lowest priced retailer in town.
Consumers like the convenience and consistency provided by familiar brand names on smaller, more targeted stores.
Some big retailers have started developing small test store formats. But can they do it successfully?
In 2011, fifteen Walmart Express stores opened up. These stores are approximately 15,000 square feet, whereas the typical Walmart Supercentre is 185,000 square feet. Target plans to launch four City Targets in 2012 and 2013, which will be half the size of regular stores. Best Buy, Staples and Office Depot are also looking at developing smaller format stores.
These smaller store formats will partly be successful depending on the efficiency in the back end. They can either use their supercentres as distribution centres or they can find cost effective ways to ship and shelve their products.
Retailers also have the option of developing smaller store formats within existing stores. Superstore has a spacious front lobby that could easily accommodate a section of low-priced, convenience items that consumers would not have to travel the entire store to find. This would help improve the price image of Superstore.
It would be nice if you could quickly run into Superstore on the way home from work and pick up some milk and eggs at the front. This would be a quick in and out providing the lower prices Superstore passes on to its customers.
This would help drive incremental sales and shopper trips for Superstore which they are currently losing to smaller format retailers like Safeway and Sobeys.
Target has already developed “Dollar Spots” at the front of their stores. Craft supply store Michaels has also started to do the same.
The extreme value end of the market is being redefined as big retailers are starting to venture more and more into smaller formats. Local mom and pop stores, pharmacy chains and coupons and daily deal websites are all vying for position.
The downsizing trend seems to be here to stay, so lets keep an eye on possible smaller store formats and smaller stores within stores to see what consumers will be provided with in the future!
Topics: January 2012 | No Comments »
SINS Canadian Retail Index – Week Ending January 27, 2012
By admin | January 27, 2012
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SINS Canadian Retail Index – Week Ending January 20, 2012
By admin | January 22, 2012
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Target Canada: One Year Down, One To Go!
By admin | January 18, 2012
It has been twelve months since Target announced that it will come to Canada through the purchase of up to 220 Zellers leaseholds across Canada.
For us here at Sales Is Not Simple it has been a busy year of getting to know Target a whole lot better, deciphering and predicting their next moves as they gear up to enter the Canadian market; and working with the vendor community to share our insights and help them prepare to start discussions with Target Canada.
What have we learned?
1) Target is first and foremost a fashion retailer that will use this strength to draw traffic to their stores.
2) Food will be available at Target stores in Canada – but just how much food and when it will be introduced is still up in the air.
3) Tier 1 vendors with a US presence are playing a key role in the initial assortment / shelving of CPG categories in Canada, while smaller vendors have had little or no contact with Target to-date.
4) It will take 9-12 months to renovate each store and finding the skilled trades to renovate the stores to Target’s standard is tough in today’s labour market.
5) It is a good time to be a good merchant or store operator, with Target having a huge recruiting task in front of them. Target will look to build their Canadian ranks by enticing the best and brightest employees from their competitors.
But where do we go from here? We are still a long way from receiving the first purchase orders from Target and this will make the next twelve months relatively challenging for potential vendors.
To ensure success a vendor must:
1) Learn Target inside and out. This is “Sales 101” but knowing your customer in intimate detail is the first step to success.
2) Determine what role you want Target Canada to play in your overall business strategy in 2013 and 2016.
3) Assess impacts on existing customers volumes and the corresponding financial implications on your P&L.
4) Develop a transition plan for Zellers volume in 2012 and use the opportunity to shift volume towards more profitable / strategic accounts.
5) Determine the right structure for you to service Target, nominate your best and brightest to the roles and get them trained and “Targetized” ASAP.
2012 will be an exciting year as vendors adapt to the changes Target is bringing to their business and strategize the opportunities that lay ahead.
If you are still looking at Target as an opportunity for your business but you don’t know exactly where to start, consider joining our one day “Selling Target In Canada” workshop which will be held in Mississauga this Thursday, January 26th.
Link: http://www.salesisnotsimple.com/products-services/selling-target
Topics: January 2012 | No Comments »
SINS Canadian Retail Index – Week Ending January 13, 2012
By admin | January 16, 2012
Topics: January 2012 | No Comments »
