The start of the 2015 has coincided with unprecedented pessimism about the Canadian retail landscape. The recent announcements came in back to back and shocked the system.
- Target closing all 133 locations. The lack of an ecommerce offering wasn’t obviously the only factor but it can’t be denied that it did not help. Canadians are notorious online pre-shoppers and Target really missed the boat here.
- Mexx declared bankruptcy and is shutting down its 95 Canadian stores
- Sony Canada closing its 14 stores amidst years of losses.
- Late 2014 also saw the Smart Set brand disappear as well as the disappearance of Jacob after 37 years
Is there real reason for concern? Is this a seminal moment for Canadian retailers to reassess their strategy.
I for one don’t buy the headlines. Canadian retail is alive and well. The industry as a whole grew at a healthy 5% in 2014. We are at a new dawn and the new possibilities for growth are promising. However, it is time for the decision makers to take action and future proof their businesses.
Retail growth 101
The three components that define a strong retail strategy are:
- Store strategy and operations
- Customer focus
I will focus on the third point. Customer focus starts today with understanding the customer journey. The journey today begins with connected technology as evidenced by estimated the 5+ billion monthly searches conducted every month by Canadians. In addition, they spend 75 hours (!) online each month and this number is growing. Mobile and tablet growth rates are simply stunning.
It is not just the time spent online that is important to look at but the actions that they are doing. It’s never been easier for retailers to better understand their customers and gain a clearer sense of how to better serve them.
Some tips to start
- Use search data to recognize new product opportunities as well as competitors’ market share
- Deep dive in your analytics to understand pre-shopping behavior
- Explore the burgeoning field of mobile tracking in stores
The new Retail operating model
Facing these recent headwinds, what can Canadian retailers do? It is clear for me; the launch point should be measurement. Data will always win the day.
Cross-channel and cross-device measurement is the central piece in this massive jigsaw puzzle. As we said, Canadians don’t simply walk into stores anymore without having gathered some information even if it is simply store hours. Tracking from online to offline is easier than ever before. HBC was able to prove a 2.6% in store uplift from its online advertising efforts.
The emergence of Bluetooth low energy as a standard will be a boon for retailers as they seek to provide offers / augmented store experiences. Undoubtedly, this is already being met with privacy concerns. There are a few innovative Canadian companies leading in this space.
The unified view of the customer via customer relationship management and programmatic platforms is already underway. The barriers to connect these data points are quickly lifting. This data will allow retailers to invest according to high value customers and their current lifecycle.
For Canadian retailers, the ability to innovate and compete with their American counterparts is now at hand. Among the wreckage of the past few weeks, stronger and more agile companies will surely emerge. There is no other alternative.