Industries need to learn from the experience of Covid-related supply chain disruptions to mitigate the next global crisis. That was “Retail Prophet” Doug Stephens’ message to the recent 26th Hardlines Conference in Niagara-on-the-Lake, Ont.

Lowe’s Canada opens bulk distribution centre just north of Calgary

Lowe’s Canada has opened a 1.23 million-square-foot distribution centre near the town of Balzac, Alta., just north of the Calgary city limits. The new DC, which will consolidate the activities of several facilities that the company was operating in the Calgary area, is part of Lowe’s Canada’s strategy to ramp up its distribution network to better meet both in-store and online customers’ needs.

“I can tell you we’re in supply chain optimization right now,” president Tony Cioffi delegates at the recent Hardlines Conference in Niagara-on-the-Lake, Ont., when he revealed the news of the new DC. “And we are in the process of opening a new bulk distribution centre in Ontario. Really, the objective is getting the product to the customer over the last mile.”

The recently opened Calgary DC, located in the High Plains Industrial Park, cost a reported $120 million and was a partnership of Lowe’s Canada and the Highfield Investment Group. The industrial park, near major highway networks in Alberta, has recently attracted distribution facilities from other large companies, including Sobey’s, Smucker’s, and The Home Depot Canada.

During his Hardlines Conference presentation, Cioffi said stats show that “same-day delivery is not years away. Same day is almost today, so it’s really important to rethink our model. We are moving from big-drop economics to small-drop economics. And it is really having a huge impact on our supply chain—lots of pressure on the supply chain.”

Cioffi outlined other supply chain enhancements made earlier this year by the company. “We have direct distribution centres for lumber and building materials, which deliver direct to the jobsites. And we’ve had three stores this year that we’ve converted to distribution centres. So we’re loading those stores with inventory, we’re taking orders from the stores, and we’re going to deliver to the jobsites.”

Home’s marketing lead talks brand, omni-channel, and attracting pros

Home Hardware has a lot on the go, and that has Laura Baker, the company’s chief marketing officer, pretty jazzed. Interviewed at the company’s first-ever dealer market in Toronto last month, she shared her enthusiasm for the dealer-owned company’s latest initiatives.

Starting with supply chain improvements, Baker explained how Home Hardware had just locked in its ability to ship customer orders from any of its three warehouses either direct to store or direct to home. “That omni-channel tent we have for customers to buy, in any channel they choose, is very important to us.”

Tying in each independent dealer to the online sale with an effective attribution model was a big part of the development process, she said, referring to shoppers’ propensity for mixing online and in-person interaction with a store. “Customers will go back and forth and we’ve created a buy-in for the dealer that benefits their own Home Hardware store to have those sales.”

Most Home Hardware dealers have a micro-site that provides basic store information, including location and hours. But customers are looking for greater detail about each location. Baker says the look of those sites will change to focus more on each dealer, “and you’ll see in everything we do, not just online, is to put the dealer front and centre.”

Home Hardware’s marketing approach will be less promotionally focused in future, Baker said. Starting in January, advertising will push overall awareness of the Home Hardware brand and the “Here’s How” slogan when undertaking a project, “rather than who has the best price.” That initiative will be supported by a website that offers more content to guide DIY projects.

Baker then turned her attention to another important customer—contractors and builders. “The pro is a huge component of our business.” That’s now being reflected in everything from product lines specifically for pros, such as Milwaukee power tools (shown here at the recent Home Hardware Homecoming market) and Home’s own Cat brand of power tools, to a newsletter for trades that features product specials and tips. A beefed-up website offers videos, design and décor articles, and product reviews.

Even Home Hardware’s regular flyers feature more LBM and pro-oriented products now. “It’s a growing part our business, growing really quickly and probably less volatile than other parts of our business,” Baker noted.

Shopping on Black Friday, Cyber Monday, and Boxing Day continues to be important to cost-conscious Canadians, according to a new survey by the Retail Council of Canada. In the RCC’s Léger Holiday Shopping Survey, over 2,500 Canadians across the country shared their preferences for—and concerns about—buying during the coming holiday season.

The survey reveals that six out of 10 Canadians are feeling the pinch from current financial strains, yet overall, they plan to spend about the same amount, $790, as they anticipated to spend in last year’s holiday season. While eight in 10 consumers intend to buy gifts for others this year, 62 percent say their gift-giving habits have changed over the years. Today, they want to buy more meaningful gifts for fewer people.

Expect more people in stores this year, as well. Six out of 10 said they will shop in person (up from last year), in hopes of reigniting the holiday shopping festiveness they valued prior to the pandemic.

But hardware and home improvement retailers may see much of that traffic going to other retail sectors. As people indicated their desire to move to more in-person holiday celebrations this year, they expect to spend the biggest portion of their holiday budgets on food and beverage retailers, food service providers, and restaurants. As for gift shopping, nearly half of respondents said they will shop at discount retailers this holiday season.

(RCC will be hosting an online Retail Holiday Shopping Forum on November 8, with representatives from Léger, to discuss the key findings of the survey.)

At BMR Group, Katia Chamberland has been appointed director, human resources, retail. She continues to report to human resources VP François Grenier. Chamberland joined BMR Group in 2014 as human resources advisor and in 2016 was promoted to HR team leader, retail and corporate. She is a graduate of the Université de Montréal in industrial relations.

DID YOU KNOW...?

Quebec home improvement retailer Patrick Morin is investing $20 million in upgrades to its Saint-Paul, Que., warehouse that will double the facility’s footprint. Work is already underway. VP and COO Daniel Lampron says the expansion will add new jobs at the DC. It’s part of a wider pattern of growth for the Quebec chain, which will open new stores in 2023 in Brossard and Blainville.

Mountain Equipment Company has opened three shops in Toronto-area Hudson’s Bay stores, at Yorkdale and Square One Shopping Centres, and in the flagship downtown store on Queen Street. Each store-within-a-store is between 7,000 and 11,000 square feet and offers most of the products and services at a regular MEC store, except for bike and ski service stations and some larger items. At the same time, MEC has a national presence on TheBay.com.

Holiday shoppers will see lots of markdowns as retailers seek to offload inventory ordered before inflation hit, retail analyst Bruce Winder told CTV News. But the actual savings will be distorted thanks to overall price increases. “You’re going to see a lot of discounts but a lot of those discounts will be based on higher regular prices year-over-year because of inflation,” he said. “My hypothesis is that consumers are going to start [shopping] early and they’re going to really cherry-pick discounted items.”

SUPPLIER NEWS

West Fraser Timber Co. reported third-quarter sales of $2.09 billion, down from $2.89 billion in the previous quarter and from $2.538 billion in Q3 2021. Third-quarter earnings were $216 million, down from $762 million in the second quarter, and a drop from $460 million in the previous-year Q3.

ECONOMIC INDICATORS

Retail sales increased 0.7 percent to $61.8 billion in August. Sales rose in six of 11 subsectors, with those six representing 65 percent of retail trade. The increase was led by sales in food and beverage stores, which were up 2.4 percent. LBM and garden sales edged up by 0.6 percent from July but jumped by 12.1 percent from a year earlier. (StatCan)

Sales of new single-family houses in the U.S. in September were at a seasonally adjusted annual rate of 603,000. That was 10.9 percent below the August estimate of 677,000, which was up 24.7 percent from July. (U.S. Commerce Dept.)

NOTED

The 30th Outstanding Retailer Awards were held earlier this month at the Hardlines Conference. To view a list of this year’s winners, click here. Clicking on an image will take you to the video of that winner’s award presentation.

OVERHEARD...

“Do you know the name of your FedEx or UPS driver?” —Tony Cioffi, president of Lowe’s Canada, on how things have changed drastically as people engage in more online shopping than ever. He spoke earlier this month at the 26th annual Hardlines Conference.