Online sales in Canada dropped by eight percent in the first quarter of 2023. More and more vendors are selling direct to consumers, competing with their own retail base. And 66 percent of customers expect retailers to know what they want and understand their needs—but only 32 percent of retailers have the full ability to turn their data into customer experiences.

These were some of the insights shared by at the Retail Council of Canada’s STORE23 conference, held at the end of May. Rob Graf (pictured), global VP and general manager, retail, for Salesforce, suggested that the solution to this discrepancy is for retailers to offer "unified engagement." He explained that meant delivering a marketing, digital commerce, and in-store experience that is cohesive.

Retail customer “engagement” has come a long way since the first loyalty program in our industry—the introduction of Canadian Tire “money” in 1958. The idea back then was to have a customer think of Canadian Tire every time they peeked into their wallet and saw the impending “discount” just waiting for them at the store. But Canadian Tire money provided no insight into a customer’s behaviour, spending patterns, shopping habits, or preferred brands.

Now, 65 years later, Canadian Tire money has grown into the Triangle Rewards program, which provides a point of customer engagement for all of Canadian Tire’s banners, including Marks, PartSource, and Party City. Canadian Tire reported that 11.3 million Canadians were members of its Triangle Rewards program by the end of 2022. Sales of Triangle Reward members are outpacing that from non-members.

But the sales angle isn’t really the point. The point, from the Tire’s point of view, is to fully understand what its customers want, where they are spending more, where they are cutting back, and how they respond to promotions. Canadian Tire wants to possess all of the metrics of consumer behaviour in its auto, hardware, and leisure strongholds.

How companies can access federal funding to build their digital offering

A recent Hardlines survey showed that independent home improvement retailers were averaging close to 0.1 percent of sales being conducted via e-commerce.

Meanwhile, Canadian Tire made headlines in March 2022 when it announced that it would invest $3.4 billion in its “omnichannel” experience—in other words, a mix of bricks and mortar and e-commerce. Where can mom and pop stores find comparable money to invest in their digital futures? They can’t.

But one Vancouver-based marketing expert who specializes in customer engagement says that the independent dealers in our industry are “well positioned to catch up” with e-commerce. Partly, he says, this is a function of e-commerce platforms that are plummeting in price. But it’s also because effective investments in technology do not need to be grandiose to be effective.

“Covid highlighted to everybody the need to adopt more digitalization in their business—to survive,” Romain Mercier (pictured), partner and co-founder of Vancouver-based PS&Co Data Lab, told Hardlines in a recent “What’s In Store” podcast. (The podcast will distribute to subscribers next week. To sign up—it’s free—click here.)

“The Canadian Digital Adoption Program (PDAP) is $4 billion of government funding that is available for all Canadian organizations that generated over $500,000 in revenue in one of the previous three years. There are a few other criteria that you can review at the program’s website. But that fund provides each organization $15,000 in funding.”

“These funds could be used for brands to create a digital logo—or create a website. Businesses, Mercier says, can ask themselves “what would we need if we wanted to do a direct-to-consumer sale of a product? Or a distributor could use it to create digitalization in their supply chain. Or maybe put a QR code on their products to better manage their inventory.”

“I would strongly urge your subscribers to look into it because there's a lot of very talented experts out there certified by the government that can help them, over multiple years, make sense of how we move forward,” Mercier said.

(Romain Mercier is one of the exciting speakers at our Hardlines Conference in Whistler, B.C., this fall! For a full speaker lineup—and to register—click here.)

Quebec chain Canac is cranking up the heat on expansion

Canac is pursuing an aggressive growth strategy, with several new store openings in the works. It’s investing $20 million to open a 40,000-square-foot store in Sorel-Tracy, about 100 km down the Saint Lawrence from Montreal. The family-owned Quebec chain expects to break ground next month in anticipation of an opening next spring.

“We’re currently opening one or sometimes two outlets a year,” CEO Martin Gamache said in an interview with La Presse. “We aim to do at least two and eventually a few more per year.”

Sorel-Tracy is just half an hour from Contrecœur, where Canac opened its 32nd store, including a warehouse, at the beginning of this year following pandemic-related delays. That site anchors the Cité 3000 commercial hub, part of an extension to the Port of Montreal along its south shore.

Meanwhile in Magog, a planned store is starting the process toward regulatory approval from scratch. Residents already approved a plan that would involve Canac assuming responsibility for a neighbouring strip of roadway. The enterprise is now seeking the green light on a revised plan that leaves that strip in municipal hands, but it can still fall back on the original approval if the second vote fails.

At the same time, Canac is pressing patriotic buttons in response to the acquisition of RONA by U.S. private-equity firm Sycamore Partners. Martin Gamache said of the rival that he doesn’t “believe they can go back to those values, family values like ours.” Rivière-du-Loup is another market where Canac’s entry has faced delays. Work on that store is now expected to begin by early 2024, with an opening to follow in the fall.

All told, Canac has said it is investing $200 million in its expansion efforts over the next five years. In addition to store openings, those include a new fulfilment centre opposite Quebec City, on the south shore of the St. Lawrence River, this coming fall.

By 2025, the chain will have doubled the footprint of its Drummondville warehouse to one million square feet. “We also plan to invest in automatizing that centre because we want in the short term to be transactional online and deliver directly to our customers," Gamache told Le Journal de Québec.

In an industry where succession is a major concern for many independents, especially family stores, the Moisans of Saint-Raymond, Que., have been lucky. Cousins and co-owners Marianne and Mathieu represent the third generation at the helm of the business, where she is comptroller and operations director and he heads up sales and procurement.

Marianne and Mathieu won the Outstanding Retailer Award last year in the Young Retailer category. Both started working in the family store in their early teens, and both knew by early adulthood it was where they wanted to settle in their careers.

But family policy dictated they fly the nest first and gain experience in another sector. Matthieu spent two months interning in construction estimation for a store customer. “It really clarified for me that my place was in the hardware store,” he reflects.

For her part, Marianne spent nearly a decade working for a Quebec-based aviation firm that contracted with the U.S. military to rent planes for training before qualifying as a Certified Public Accountant. That process required a two-year internship, “and of course my parents didn’t want it to be at the hardware store. So I left precisely to look elsewhere [in order] to follow the family rule.”

Family businesses can be fraught, with the potential to muddle personal and professional conflicts. But the Moisans agree they’re lucky to have complementary gifts and temperaments. The division of labour, Mathieu says, “almost happens by itself”. Marianne notes that she resembles the pair’s grandmother Thérèse, who was “really about numbers”, while Mathieu shares their grandfather Paulin’s “orient[ation] towards human relations” and “connections with vendors and customers.

“We still have the same vision, the same mentality,” says Mathieu. “That helps everything to go well.”

(Marianne and Mathieu are the subjects of an in-depth profile in the latest issue of our print magazine, Hardlines Home Improvement Quarterly. HHIQ is free to dealers. Click here to learn more and get your subscription today!)

J.P. Towner has stepped down as CFO of Dollarama to the take up the same position at RONA inc. His appointment is effective Oct. 16. A graduate of Laval University and Harvard Business School, he has more than 15 years of corporate and financial experience, including time at BMO Capital Markets and Pomerleau Inc.

DID YOU KNOW...?

… that the biggest networking event of the year will be this year’s Hardlines Conference! It takes place Oct. 17 and 18, 2023, at the Fairmont Chateau Whistler Resort, and you don’t want to miss this one. The two-day program includes such speakers as Jean-Sébastien Lamoureux, SVP of affiliates, wholesale, and public affairs at RONA, and Geneviève Gagnon, president of three companies including Gagnon La Grande Quincaillerie. Hardlines Weekly Report member-subscribers can take advantage of a 20 percent discount on registration, while special pricing is available to dealers.

RETAILER NEWS

Lowe’s Cos. will roll out a new department to 300 of its stores south of the border—a “one-stop shop” that will sell farm, ranch and outdoor products, including brands such as Carhatt and Wrangler. The obvious strategy here is to lure rural shoppers from Tractor Supply. “Our penetration of rural stores gives us an opportunity to drive sustainable profit growth due to the much lower expense base that’s required to operate these stores,” Lowe’s CEO Marvin Ellison said during a recent earnings call.

Home Depot is officially kicking off Halloween in July. “Enthusiasts are decorating earlier than ever before,” the company says on its website, which features a full lineup of monsters and ghosts to follow on the success of “Skelly,” its 12-foot skeleton decoration. Besides a 13-foot Jack Skellington figure (from The Nightmare Before Christmas), avid trick-or-treaters can meet Lethal Lily the Witch, a high-tech figure that stands seven feet high and has eight servo motors in her head that replicate facial movements with moving mouth and rolling eyes.

Ottawa’s Carlingwood Shopping Centre, which is anchored by the largest Canadian Tire in the country, is for sale. The “Remarkable Retail” mega store opened last fall. At 135,000 square feet, it is one of two such footprints operated by Canadian Tire—the other being in Welland, Ont. The Canadian Tire store at Carlingwoood has 19 years remaining on its lease. The sale of the mall is being handled by TD Securities and commercial real estate giant Cushman & Wakefield. Other anchors at the mall include a Loblaw grocery store, a Rexall pharmacy, and a Dollarama.

SUPPLIER NEWS

RDTS Canada is celebrating the 10-year milestone of its partnership with French home improvement retailer Bricomarché and marketing agency CPM France. The relationship began with the launch of the Imagine merchandising program in June 2013. RDTS and Bricomarché began working together to develop the program, an idea that had been germinating since 2009, in 2011. Imagine garnered CPM France an award from point-of-purchase trade group POPAI in 2018.

The annualized pace of total housing starts for all areas of Canada increased 41 percent in June (281,373 units) compared to May (200,018 units). This represents the largest month-to-month rate change in the last 10 years. This is mostly due to multi-unit starts which accounted for about 82 percent of total starts. (CMHC)

Sales of existing homes in Canada logged a 1.5 percent increase between May and June, a smaller gain than in April and May. Sales for the month were up in a little over half of all local markets, with gains in British Columbia and Alberta offsetting fewer sales in the Greater Toronto Area. The actual (not seasonally adjusted) number of transactions in June came in 4.7 percent above June 2022. That was the largest year-over-year national sales increase in two years. (CREA)