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October 13, 2014 Volume
xx, #38
“In the modern world of business, it is useless to be a creative, original thinker unless you can also sell what you create.” David Ogilvy (British-born advertising pioneer and founder of Ogilvy Group, 1911-1999)
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Canadian Tire unveils digital growth strategy
TORONTO — Canadian Tire Corporation says it’s going “on offence” with an aggressive three-year plan “to compete in a rapidly changing retail environment.” The company intends to drive growth from its core businesses, including its retail banners and financial services. “We can unlock tremendous growth in our existing businesses,” said Michael Medline, president of Canadian Tire, who will also become CEO effective December 1.
That plan will include targeting the new generation of young families with children and will be reflected in product assortments, marketing, store layouts, and investments in digital and online offerings. The company finally began selling online nationally earlier this year, and now offers about 80% of its products through a "buy online, pick up in store” system.
Medline said he wants to see targeted advertising reaching customers by text message for discounts on seasonal goods. The company isn’t quite ready to take that step, which would require a system that “knows it’s snowing” and tags inventory accordingly, but Medline says Canadian Tire needs to up its online game if it’s to appeal to the next generation of shoppers.
On the credit card side, Canadian Tire Financial Services will continue to expand its services to customers, including in-store instant credit and increased loyalty rewards through the new Canadian Tire loyalty program for Options MasterCard holders.
The company says it will buy back an additional $400 million of class A non-voting shares through to the end of 2015. It also confirmed that it will maintain its dividend policy, paying out 25-30% of the prior year's normalized earnings. With these changes, CTC expects to realize annualized sales growth of at least 3% at Canadian Tire, 5% or more at Mark’s, and 9%-plus at FGL Sports.
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RONA expects Ace reach 400 stores in five years
WINNIPEG — RONA sees its new partnership with Ace Hardware as an effective means for recruiting dealers and expects to grow to almost 400 stores in Canada over the next five years.
The Ace brand will be managed largely out of RONA’s TruServ Canada division in Winnipeg, with a team out of Boucherville as well. RONA will concentrate on big boxes and RONA affiliates, while TruServ Canada will keep focused on the smaller stores, many of them already carrying TruServ’s TRU brand. As for other independents, Ace Canada’s recruitment team is already knocking on doors across the country.
According to Bob Moschorak, president of Ace International, the brand is coming to Canada this time with a long-term strategy, something, he says, that may have been lacking with Ace in the past. Under the new partnership, Ace expects to have 398 dealers onside before the end of this decade.
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Young leaders will present at Hardlines Conference
NEW WORLD HEADQUARTERS — The Hardlines Conference will welcome some fresh voices on the podium this year. A panel will feature young retailers and vendors from across Canada who will give their take on the needs and drives of the new generation of the home improvement industry. Meet our panel:
 Kim Ytsma, Co-Owner, Alliston Home Hardware. Kim began working in her dad’s store when she was just 10 years old. Today, she directly oversees the 15 service desk staff and ensures consumers get the assistance they need. Kim splits her day between the customer service desk, her own office, and working the floor.
Marc-André Dignard, Project Manager – Retail, RONA inc. Marc-André joined  RONA in 2009 as a senior internal auditor. A Chartered Professional Accountant by profession, he became Project Director, Operations in 2012 and is responsible for SG&A, cost reduction, standardizing retail operations, closing non-performing stores, and many other projects.
 Joel Seibert, General Manager, Mountain View Building Materials. Joel is a third-generation lumberman. While only 32 years old, he has been exposed to the building supply industry his entire life. He believes the future of the retail lumber industry depends on retailers’ ability to communicate with customers, suppliers, and environmental groups to ensure innovation, growth, and sustainability for many generations to come.
 Eric Palmer, Canadian Sales Operation Manager, JELD-WEN Windows & Doors. Eric graduated from the University of Manitoba with an Honors Degree from the Asper School of Business, and joined JELD-WEN, where he has worked his way through Management and Communication training.
The panel will be moderated by Sherri Amos, Education & Communication  Specialist at Home Hardware Stores Ltd. With voices from all levels of the industry, this group of young leaders will challenge your thinking on where our industry is going in the 21st century.
Click here to find out more about the 19th Annual Hardlines Conference, October 22-23 at the Sheraton Toronto Airport Hotel & Conference Centre.
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Shoppers turn away from bricks and mortar
SPECIAL REPORT — U.S. retailers are facing a steep and persistent drop in store traffic, which is weighing on sales and prompting chains to slow store openings as shoppers make more of their purchases online.
A recent Wall Street Journal article explains that shopper visits have essentially fallen by 5% or more from a year earlier in every month for the past two years, according to ShopperTrak, a Chicago-based data firm that records store visits for retailers using tracking devices installed at 40,000 U.S. outlets. Even as warmer temperatures replaced the harsh winter weather this year, store visits fell by nearly 7% in June and by nearly 5% in July, according to ShopperTrak.
New data from Moody’s Investors Service shows that the shift to online sales has prompted retailers to scale back store openings and will likely lead them to pare back even more in coming years, as more than $70 billion in lease debt expires by 2018. Growth in store counts at the 100 largest retailers by revenue has slowed to less than 3% from more than 12% three years ago, according to Moody’s.
The pressure comes as consumer tastes are changing. Instead of wandering through stores and making impulse purchases, shoppers use their mobile phones and computers to research prices and cherry-pick promotions, sticking to shopping lists rather than splurging on unneeded items. Even discount retailers are finding it harder to boost sales by lowering prices as many low-income consumers struggle to afford the basics, regardless of the price.
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Lowe’s subject of “frivolous lawsuit”?
SAN RAFAEL, Calif. — Officials in the Bureau of Weights and Measures here charged Lowe’s with consumer fraud over the real dimensions of its 2x4s, in what The Motley Fool characterized as part of a “rising wave of frivolous lawsuits.” According to a Lowe’s statement, the complaint arose after local weights and measures department inspectors visited Lowe’s stores and found that its dimensional lumber was “under-sized.”
It’s an industry convention: smoothing down a rough 2x4 to a standard 1.5"x 3.5" avoids a plethora of locally improvised cut dimensions. In California, however, it has raised enough questions around consumer protection to catch the court’s attention. The agreed settlement, enforced by court order, seems to suggest that all parties consider it prudent to inform customers of lumber measurements in real terms. Lowe’s will now list both conventional and exact measurements for its dimensional lumber. It will also be obliged to write out feet and inches, without resorting to the tick marks commonly used to indicate those units.
What isn’t yet clear is why Lowe’s was singled out for a common practice, or how other industry players will respond. If the settlement is the sign of a shift in thinking, then “bilingual” measurements could become an industry fixture. Other companies will not want to invite the possibility of litigation, and with the precedent set by the case in California, voluntarily adopting Lowe’s new standards may be the safe option.
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Classified Ads
Renin (RedefiningaNdINnovating) is an innovative manufacturer of door systems and hardware for door manufacturers and fabricators. Renin also manufactures and distributes sliding bypass and bifold closet doors, room dividers, fabricated glass and decorative mirrors to the residential construction and remodeling markets. With a recent ownership change, the mandate is to build both strategy and leadership to continue their growth. Wolf Gugler Executive Search has been retained to search out qualified candidates for the following positions:
Director of Sales
Manage the sales execution process and strengthen the current business relationships with assigned accounts such as Home Depot, Lowe’s and Home Hardware nationwide. Responsible for new account acquisitions and selling Renin branded goods to those accounts.
- Work hand in hand with the senior management, especially with the Vice President Sales and Marketing and the Marketing Team, to make sure that the e fforts are being well directed.
- D irect reports include Account Manager s; train, develop and add to headcount as deemed necessary.
- Development of sales, merchandising and assortment planning to assigned accounts.
- Align business plan to achieve budgets while creating and implement ing strategies that help the business grow and surpass sales targets.
- Prepare key account sales plans and account profiles and maintain detailed account management profiles with a thorough understanding of all decision-makers and business strategies.
- Develop and foster relationships with Merchants, M.A.s and associated support staff.
- Build and maintain a ctive market research, analyze trends and develop strategies a ccording ly .
- M anage budgets and sales goals and w ork to achieve monthly, quarterly and annual targets based on corporate sales objectives.
- Maintain complete competitive files including regular ‘comp’ shops.
- Develop new listing items and product demand forecast models.
Qualifications : ten years’ success in a sales management role in the building materials/ home renovation industry. Strong leadership skills including adaptability, creativity, forecasting and budgeting and outstanding customer focus. You may be based in Canada or the US for this role.
To apply, click this link or apply online on the Opportunities page of our web site, www.wolfgugler.com.
Director of Marketing
Based in the Brampton corporate office, this new role will be hired after the Director, Sales. The full position responsibilities and qualifications are posted on our web site Opportunities page.
To apply for this role click here or apply online on the Opportunities page at www.wolfgugler.com.
Wolf Gugler Executive Search, 888-848-3006. Offices in Canada and the U.S. www.wolfgugler.com
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