Retail Insider the magazine • Issue One

ISSUE ONE

Retail repurposed: Exploring the transforming role of the brick-and-mortar retail store

PLUS!

Snap Inc. C anada Retail Exec utive Roundtable

Inflation, supply chains & greed

Cauldron of chaos

On the back of its people

Planning for the worst amid continued disruption and disarray

Examining a disturbed and disrupted retail supply chain

Inside Peavey Industries LPs strong employee and brand culture

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2 | Retail Insider the magazine | Issue One

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Frictionless delivery Curbside, In-store, Same day / Next day delivery

UPFRONT // PUBLISHER’S DESK

Exploring and celebrating a dynamic Canadian retail industry Welcome to the inaugural edition of Retail

featuring proprietary research and information

Insider the magazine – the only one of its

connected to the magazine.

kind dedicated to covering the country’s retail industry. I’m extremely proud to launch this

I would like to thank everyone involved for their

dynamic magazine, which coincides with the

contribution in helping to realize this incredible

10-year anniversary of Retail Insider, which I

achievement: the magazine’s Associate

founded in 2012.

Publisher, Dustin Fuhs; Editor-in-Chief, Sean Tarry; Art Director, Scott Newlands, and all of

In addition to serving as an extension of the

our amazing contributors who have ensured

Retail Insider Media Ltd. offering, Retail Insider

that our first issue is a huge success. A special

the magazine is a publication that also ensures

thank you must also be paid to our advertiser

a much-needed voice for the Canadian retail

and sponsor partners for providing the support

industry. The past two-plus years have been

required to execute on a project of this nature.

incredibly challenging for merchants of all sizes and formats, and a time during which

Most of our thanks, however, go to you – the

there has not been a publication featuring

reader. Without you, the people who comprise

investigative research, thought leadership

this dynamic and exciting Canadian retail

and provocative insights meant to support

industry, our endeavour would be meaningless.

and facilitate innovation and help uncover opportunities. Retail Insider the magazine

I really hope that you and your teams find the

aims to fill that void and be that publication.

content that follows engaging and useful and will look forward to your response.

As part of our first edition, which includes highlights on the retail supply chain, store

Sincerely,

experience and evolving role of human resources, we’re also launching a brand-new online portal which showcases international retailers entering the Canadian market as well as those that are already here and expanding.

Craig Patterson

To access the portal, visit page 26. This will

Publisher

represent the first of various online resources

craig@retail-insider.com

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IN THIS ISSUE //

Issue one 12

38

12 // The store of the future isn’t a store

Best-selling author and Founder of Retail Prophet Doug Stephens shares a glimpse into the future of the physical retail store.

18 // Executive Roundtable

28 // Planning and Strategy At the helm of inflation, supply chains and greed

Transforming the retail experience to meet evolving consumer needs

Retailers across the country plan for the worst

Who is the Canadian consumer? And what do

38 // Supply Chain Disruption

they seek from the brands they shop with? A panel of industry leaders discuss these talking points, and more.

amid continued disruption and disarray.

Cauldron of chaos As more negative forces are added to the mix, the disruption and disturbance around the

26 // Special Report New Canadian market entrants and homegrown retailers expanding Retail Insider Media Ltd. Founder Craig

retail supply chain continues to grow.

50 // Brand Profile On the back of its people

Patterson provides a sneak-peek into the

Peavey Industries LP continues tremendous

brands helping to shape the future of the

growth and success as a result of a strong

Canadian retail landscape.

employee and brand culture.

4 | Retail Insider the magazine | Issue One

MASTHEAD //

Departments 03

Publisher’s Desk

06

Insider Insights

08

Main Street Matters

10

The Digital Curve

56

Data Points

57

Advertisers and Sponsors

PUBLISHER Craig Patterson ASSOCIATE PUBLISHER Dustin Fuhs EDITOR-IN-CHIEF Sean Tarry ART DIRECTOR Scott Newlands

44

CONTRIBUTORS Jana Manolakos, George Minakakis, David Nagy, Craig Patterson, Clara Spinassi, Doug Stephens, Sean Tarry, Mario Toneguzzi SALES AND SPONSORSHIP Darryl Julott | darryl@retail-insider.com Tyler Mercer | tyler@retail-insider.com ________________________________________ EDITORIAL OFFICE 100 Bloor Street West, Toronto, ON, M5S 3L3

Retail Insider the magazine is published

44 // Human Resources The great renegotiation Mental health and wellness issues are coming into sharper focus, becoming the new

four times each year by Retail Insider Media Ltd.

therimagazine.com

bargaining chips in retail staffing.

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UPFRONT // INSIDER INSIGHTS

Return to the office?

50% 88% According to a recent Ipsos poll of Canadians currently working from home, only half believe that they’ll be returning to their offices regularly in 2022.

56%

say that they’ve enjoyed working from home, with 58% stating to miss their colleagues.

have enjoyed the flexibility of working from home and would rather not return to their office on a regular basis.

Sustained supply chain disruption 9 out of 10

A recent survey conducted by Sapio Research on behalf of Coupa Software Inc. reveals that 90 percent of retail supply chain leaders at retailers in the U.S., U.K., France and Germany expect revenue will continue to be impacted by supply-chain issues throughout 2022. In addition, retail organizations anticipate revenue losses between 5% and 20% over the course of the past 18 months, reflecting a loss of billions of dollars in sales.

The rise of augmented reality 8.8 Million

Fresh data from Global Industry Analysts Inc. indicates that the global smart augmented reality glasses market is set to reach 8.8 million units by 2026.

6 | Retail Insider the magazine | Issue One

+80.3%

Increasing a market that comprised an estimated 255.6 thousand units in 2020, the smart augmented reality glasses segment’s CAGR is expected to grow by more than 80 percent.

The cost of inflation 55%

Findings within BDO’s 2022 Retail CFO Outlook Survey reflect growing concern around supply chain threats, with more than half of the retailers asked planning to raise their prices in 2022.

38%

have already raised prices.

More than 25% are planning to restructure or reorganize this year.

52%

of retail executives cite supply chain disruption as the number one threat to their business followed by supplier risks or delays (38%), supply shortage (37%) and higher customer expectations (34%).

To restrict or not restrict?

1/3

2/3 73%

A new study released by Angus Reid Institute, in partnership with the Canadian Broadcasting Corporation, reflects hesitance among Canadians with respect to the removal of social restrictions, with 36 per cent believing that their removal has been made too soon, compared to only 22 per cent who believe that it has not happened soon enough.

Despite the removal of restrictions, 64 per cent of Canadians will continue to sanitize their hands in addition to washing them. Three out of five people intend on maintaining the practice of social distancing.

of Canadians are in support of the continuation of masking requirements in public spaces, like shopping centres and retail establishments.

64%

support proof of vaccination for entry into places like restaurants and theatres.

53%

More than half of Canadians asked will avoid large crowds in the near-term, with exactly 50 per cent content to continue wearing a mask in public.

Mental health support

1/2

According to research conducted by Canada Life and Workplace Strategies for Mental Health, exactly half of Canadian workers feel as though their employers are not taking the steps necessary to protect them, particularly from psychosocial harm.

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UPFRONT // MAIN STREET MATTERS

Supply chain issues remain a challenge for independent retailers; governments can help by keeping other costs of doing business from increasing // By Dan Kelly, President, Chief Executive Officer and Chair of the board of governors of the Canadian Federation of Independent Business

The retail sector has shown immense resilience

such as increased time and effort to access the

and creativity throughout the pandemic. We’ve

products small businesses need for production

seen retail businesses adapt to restrictions

and sales, ranked second (70%) on business

and lockdowns and pivot to offer curbside

owners’ list of significant challenges, after

or delivery services, do online auctions, and

rising prices.

rely on e-commerce to do business and stay connected with their customers.

CFIB’s latest research shows that 89 per cent of small businesses are impacted by supply chain

However, the past two years have also been

challenges. Those in retail, manufacturing, and

incredibly tough on many business owners

construction are being hit the hardest. Supply

who are now left struggling to get back on

chain issues may slow or halt production and

their feet, facing high debt levels, labour

cause delays in receiving shipment. For small

shortages, mental health challenges and

businesses trying to ramp up their production

supply chain issues. Two thirds of businesses

and sales, the issue also results in an increased

(67%) report taking on debt, at an average of

cost of shipping to customers or increased

$158,000 per business, while one in seven (14%)

prices of goods and services. In fact, 39 per cent

are considering bankruptcy.

of businesses are waiting more than a month

Supply chain challenges Heading into 2022, supply chain challenges,

8 | Retail Insider the magazine | Issue One

for shipments, while 3 in 10 business owners have seen their business’s costs increase by more than 20 per cent due to supply chain issues.

Logistical issues, delays and scarcity, in turn,

Despite the anticipated challenges and

have forced some business owners to increase

uncertainty, about one in two entrepreneurs

the prices of their goods and services to cover

said they were hopeful about the future of

the additional cost of doing business. By doing

their business as we greeted the new year. We

so, owners may risk losing customers or see

need to ensure our economy bounces back to

their sales traffic cut significantly.

pre-pandemic levels. But it will take time, hard

A return to brick-and-mortar shopping

work and support from the governments and the public.

More than half (58%) of businesses that have

Dan Kelly is the President, Chief Executive Officer

not yet returned to normal revenues said

and Chair of the board of governors of the Canadian

that a lack of customers was one of the main

Federation of Independent Business (CFIB) - the largest

reasons, while 50 per cent cited operational

non-profit organization representing over 95,000

challenges, such as interrupted supply chains,

businesses across Canada.

longer processing times, inability to do any or many online sales, or complicated shipping.

Small retailers can’t afford to lose any more customers, especially when it’s crucial to boost consumer confidence as restrictions are lifted.

We need to encourage consumers to return to in-person shopping while assuring them that it’s safe to do so. Shopping in a brick-andmortar business and being able to touch or see

89%

The percentage of small businesses in Canada that are being impacted by supply chain challenges.

products is an integral part of the shopping experience for many people. After staying at home for the past two years and shopping online, many consumers are eager to go out and return to physical stores. Supply chain challenges pose a real barrier for retailers and jeopardize their return to normal operations.

Government action required What can the government do to address supply chain challenges? There are no easy solutions, but CFIB is recommending keeping the cost of business from going up, reducing red tape and helping small businesses get back on their feet as they embark on a long road to recovery.

39%

The percentage of businesses that are waiting more than a month for shipments.

3 in 10

The number of business owners who have seen their business’s costs increase by more than 20 per cent due to supply chain issues.

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UPFRONT // THE DIGITAL CURVE

Digitally transforming in order to tackle the challenges of the modern retail business Federal financial support providing incredible opportunities for Canadian small- and medium-sized businesses // By David Nagy, Founder, eCommerce Canada

In light of the Government of Canada’s recent

as new technologies drive both customer

announcement regarding the Canadian Digital

experience as well as workplace culture

Adoption Plan (CDAP), it seems appropriate

expectations to entirely new heights.

to focus the first instalment of my quarterly column on digital transformation and the

It’s also fair to say that we’ve reached

potential implications for retail businesses.

something of a sea change moment in retail wherein e-commerce is likely more

CDAP offers $4 billion of federal support to

affected than brick-and-mortar. Influenced

a wide spectrum of Canadian small- and

by impacts of the pandemic, the past couple

medium-sized businesses through both micro-

of years have created an incredible amount of

grant funding for emerging businesses as well

uncertainty with respect to strategic direction

as digital advisory services for more mature

for many operations. In short, the pace of

ventures. While this is an impressive number,

change in online retail has likely never been

the sheer scale of digital transformation

more profound. And it’s creating challenges

globally makes this one of the largest growth

throughout every aspect of the e-commerce

opportunities within the technology industry,

industry.

anywhere. As reported by Statista in February 2022, digital transformation spending is

As a result of this change, the “old” way of

expected to reach $1.8 trillion USD in 2022 before

doing things just doesn’t work anymore. An

increasing to a whopping $2.8 trillion by 2025.

overwhelming amount of digital noise is

A new digital world

driving consumer apathy, and new methods need to be developed in order to cut through it

It’s fair to say that the retail industry will be

so that the industry can begin a much-needed

significantly impacted by this global push,

reset.

10 | Retail Insider the magazine | Issue One

What’s the problem?

which is a daunting concept for most of us to

The problems can almost be spoken verbatim.

even entertain.

Having problems with your supply chain, by chance? Struggling to keep or grow your team

What is simple to predict, however, is the fact

before they get poached by competitors? How

that not all businesses will be able to adapt to

about the rising cost of customer acquisition?

the digital transformation age. Whether it’s

These and many more issues are creating

large businesses that are married to legacy

anxiety for every executive, purchaser and

models or small businesses that don’t have the

marketer in the business. And, unfortunately,

human and capital resources to react, there

solutions aren’t being created as quickly as the

will be a consolidation and a change in tides

problems are arising.

that many organizations won’t survive.

Therefore, it stands to reason that digital

This isn’t a bad thing, though. Consolidation

transformation - the modification of business

equals opportunity, as the transition of wealth

processes, models and systems to advanced

and opportunity unsettles the norm and drives

computer intelligence - will be at the core of

innovation. At the end of the day, isn’t that

the ways in which we solve these challenges.

what we all really need right now?

Going forward, customers will demand better

Taking the first step

experiences. And we’ll deliver by providing

Sadly, there isn’t a manuscript or ‘self-help

more personalization and greater value than

guide to digital transformation’ that will give

ever through our understanding of their

you and your teams a roadmap to follow.

distinct needs. The best employees will choose

Expect a multi-year process of evaluation and

to work for companies that provide the highest

conscious evolution. There isn’t a multi-tool

quality of life, opportunities for advancement

available to digitize every part of a company

and an organizational culture that allows them

over the course of a long weekend in the same

to thrive. And, supply chain constraints will

way Shopify was able to commoditize online

get rewired due to sheer demand, and better

shopping for small businesses. Not yet, anyway.

visibility will drive diversification of trade and

But it’ll come.

export opportunities.

Rewiring the business

For now, focus on benchmarking where your digital capabilities are at today. Then identify

I can’t consciously suggest that this

where you want to be. Try to visualize the path

process will be quick or easy. In fact, digital

between these two states and you’ll start to

transformation is an over-simplified way of

see a route forming. You’ll start to understand

describing something that can involve the

where you can connect the dots in order to

complete rewiring of the way in which you

make incremental improvements. And then

position yourself in the market and how you

it’s time to take that first step on your digital

deliver value to customers. It will impact

transformation journey, adding a little more

how you buy and what you sell. It may

to your strategy every day, because the future

fundamentally change your business model,

won’t reward those who can’t transform.

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FEATURE // RETAIL REPURPOSED

The Store of the Future Isn’t a Store In this exclusive excerpt from his latest book Resurrecting Retail: The Future of Business in a Post-Pandemic World, bestselling author and Founder of Retail Prophet Doug Stephens argues that as the world emerges from the pandemic, wise retailers will rethink the core purpose and value of their physical stores.

A

nyone who knows me knows that since

that stores, in order to fill racks and shelves,

at least 2015 I’ve been howling like a mad

had to carry too much inventory. This led to

dog at a full moon about a coming transition in

markdowns and drains on margins, which

the retail industry. Well, I may stop howling now

were then further softened by damaged

because the transition is complete. I’ll explain.

goods, write-offs, and of course theft.

COVID-19 has finally awakened the retail

None of this, however, negates the tremendous

industry to the impracticality of physical

value of physical retail spaces. I repeat. This

stores as a reliable means of distributing

does not negate the value of physical space.

products, given their vulnerability to

On the contrary, it alters and enhances it.

disruption. Increasingly frequent interruptions brought on by social unrest, climate change,

Stores are transforming from a product

weather events, and, of course, pandemics all

distribution channel to a media channel, and

foreshadow trouble for physical stores in the

in a post-pandemic world, their role as a media

future. And the inherently limited availability

channel will be even more vital than it is today.

and access offered by brick-and-mortar stores renders them increasingly inconvenient in a

For one thing, the cost of digital media

digital society.

has escalated to the point of becoming an impractical means of customer acquisition for

But if we’re totally honest, even in their heyday,

many brands. For example, in 2016 U.S. fashion

such stores were a problematic means of

subscription brand Stitch Fix was paying an

putting products in the hands of customers.

average of $31 for each new customer acquired

The inherent restrictions on operating hours,

through digital media spending. By 2021

together with high working capital and

however, that cost had soared to over $350.

payroll costs, ate into profitability. Minimum

For some brands this exponential increase in

merchandising thresholds often meant

media costs has proven untenable.

12 | Retail Insider the magazine | Issue One

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Illustrations: Clara Spinassi

For example, in 2019, retailer Outdoor Voices

where the consumer’s true level of interest or

warned that the cost of each incremental

engagement can be debatable, a physical store

customer acquired through digital media

can validate the consumer’s actual presence

channels now outweighed the revenue

and participation in the experience. We can

opportunity that each new customer brought

connect directly and intimately with them.

with them. Worse perhaps is the fact that,

This may change in the short term, given

according to the Association of National

continued uncertainties around COVID-19. But

Advertisers, about 70 per cent of digital ad

it will almost certainly hold true in the long

spending “evaporates in non-viewable ads, ad

term. The pandemic will not kill the value of

fees, non-brand-safe placements and unknown

physical retail experiences. In all likelihood, we’ll

allocations.” That’s Latin for wasted ad spending.

crave physical and social interaction more than

While the cost of advertising has moderated

ever, and retail stores can help to satisfy that

somewhat as a consequence of the pandemic,

need. That said, the pandemic will profoundly

it’s a fair assumption that once light appears at

raise the customer’s expectations for the quality

the end of the tunnel, brands will be flooding

of those experiences. Having adapted over what

back into the market with ad spending. In the

will be two or more years of accelerated digital

longer term, digital advertising as a means of

commerce, customers will undoubtedly be far

acquiring new customers is clearly becoming

more discerning when it comes to making the

a prohibitively expensive and marginally

effort to engage in real-life experiences. And

effective tool.

that means we have to find new uses for the spaces formerly known as stores.

Yet in pre-pandemic New York, it wasn’t unusual to see lineups at Glossier, Supreme,

Stores as stages

and Kith. As far away as Melbourne, hundreds

Before the pandemic, I was in Melbourne,

of shoppers lined up, sometimes hours before

Australia, for some client work. I got up early the

opening, to get into streetwear emporium

first morning and headed out to check out the

Culture Kings. On a 2019 trip to Tokyo, I

retail scene. At about 8:00 AM, I came across

witnessed throngs of young shoppers waiting

a lineup of young people stretching halfway

eagerly outside chic retail stores in Harajuku

down the block. Some had brought camp

and Shibuya.

chairs and blankets, indicating that they’d been there some time already. They were waiting for

Physical retail stores are not only a powerful

the opening of the store already mentioned,

media channel; I’d go so far as to argue

Culture Kings. Culture Kings is an Australian

that they’re now the most manageable,

streetwear retailer with eight stores across the

tangible, and measurable media channel

country. I decided to come back a couple of

available to a brand. Unlike digital media,

hours later and check it out.

70%

According to the Association of National Advertisers, an estimated 70% of digital ad spending “evaporates in non-viewable ads, ad fees, non-brand-safe placements and unknown allocations.”

14 | Retail Insider the magazine | Issue One

When you enter, any illusions that Culture

Above all, you feel a distinct theatricality.

Kings is “just another store” evaporate. First,

The space, the sounds, the lighting, the staff

you feel the bass from the sound system

engagement levels — all of it reinforces the

crawl up your legs and into your chest. Then,

feeling that you haven’t just slipped into a

you’re struck by the sheer size of the multi-

regular store. You’ve entered a different world

level space, which looks more like a nightclub

entirely. Within the walls of that space, Culture

in Rio than a retail store. Next, you notice the

Kings has created a physical stage where its

DJ elevated twenty feet above a basketball

branded productions can be delivered to an

half-court below. On that half-court, staff

adoring audience.

are entertaining customers by holding a free-throw competition. Upstairs, you can

I didn’t buy anything that day. Frankly, I’m

grab a snack and a haircut. And despite the

not Culture Kings’ intended customer. What

company’s diminutive size, compared with, say,

I did leave with, however, was the most

the Foot Locker chain, it’s not at all unusual to

important product: a highly positive brand

find international celebrities from the world of

impression. Positive enough that I’m sharing

music, film, and sports roaming Culture Kings’

it with you here.

aisles with you.

But if brands are creating amazing content like this in their stores, why should it be experienced by only those within the store?

Why not let the world experience it too?

“Physical retail stores are not only a powerful media channel; I’d go so far as to argue that they’re now the most manageable, tangible, and measurable media channel available to a brand.”

Stores as studios Nema Causey has a sweet business. Literally.

Candy Me Up is a San Diego–based, familyowned confectionary business, specializing in selling to retail clients for special occasions.

Shortly before the pandemic, Causey — along with her brother Jonny, who heads up the distribution side of the business — noticed a slight decline in orders. When COVID-19 hit, the problem only became worse. “I was 99 per cent sure we were going to shut down,” she said.

In a moment of desperation, she opened a TikTok account and with Jonny, began making videos from inside the store. The store, colorful and bright, with loads of candy, provided the perfect backdrop for their antics. The pair also jumped on trends like the Jelly Fruit Challenge — an online challenge in which

therimagazine.com | 15

participants film themselves biting into jelly-

beauty space, Morphe drew up plans in 2019

filled candies, which, as you quickly learn, can

to expand its physical presence in the United

explode when bitten into, sending jelly, at

Kingdom, United States, and Canada. But

great speed, onto cameras, clothing, and the

these are hardly the sort of spaces you think of

faces of nearby friends. It wasn’t long before

when imagining a typical cosmetics store — in

Causey and her brother began attracting

part because the retailer is building full-

a following on TikTok. Thanks to a shout-

fledged production studios into its locations

out from a YouTube celebrity, the company

to drive brand awareness through customer-

almost immediately landed another 40,000

generated content. Budding content creators

followers. Soon, followers turned into orders,

in the beauty space can book studio time, and

and Nema Causey rapidly built the company’s

with the support of staff, access a full array of

first online store. She quickly ran headlong

cameras and lighting equipment. Each studio

into the enviable problem of selling out of

also doubles as a makeover space where

items featured in her videos — in one case,

customers can receive free twenty-minute

selling ten times more than expected. In case

makeovers or learn new techniques.

you’re wondering, the content Causey and her brother Jonny create isn’t high production

The result is hundreds of video tutorials which

value. It’s just fun and creative. In addition

now appear on the brand’s website, with

to viewing behind-the-scenes glimpses into

hundreds more being distributed through the

store life, the audience can live vicariously

channels of engaged and influential content

through the pair as they show, explain, and

creators. Factor in the network effect of all

yes, gorge on the array of exotic candies the

those contributors engaging their audiences

company carries.

with content created at Morphe, and it becomes a branding campaign that would

Today, Candy Me Up has close to a million

rival that of the largest beauty companies on

followers on TikTok and is now in the process

Earth. In all, the company aims to have over

of growing its Instagram following as well. As

fifty of these spaces across North America and

for the Causeys, their biggest problem now is

the United Kingdom.

keeping up with demand.

Again, this underscores the point that stores What Causey and her brother have discovered

can be powerful stages or places for live

is that their store is in fact the perfect film

commercial theater. They also make wonderful

studio from which to promote their business,

studios for content creation. In fact, even in

and that they are the essential characters in

the pre-pandemic world, I was so committed

the story. From that studio, the Causeys have

to this idea that I had already created a

developed not only an audience but an entirely

new division of Retail Prophet, focusing on

new and expanded market.

in-store, live-stream production services

Morphe-ing into media

for retailers — assisting them in building their stores into sets and stages for weekly

Cosmetics brand Morphe (pronounced Mōr-

live-streamed productions. What seemed

fee) is growing. Once an online pure play in the

somewhat innovative only a year ago is a

16 | Retail Insider the magazine | Issue One

no-brainer today. In a post-pandemic world, leveraging stores as physical backdrops for the creation of remarkable physical and digital content is an idea that has clearly come to the mainstream. The point here is that every day around the world in retail spaces large and small, magic happens. But those experiences need not be contained to the four walls of a store when they could be used to reach massive global audiences.

Rent is the new cost of customer acquisition Given the massive shift in the market to online, and the corresponding shift to using stores less as a distribution channel and more as a media channel, we must completely rethink the way we measure the productivity and contribution of physical stores. In a world where online retail is now growing furiously by double digits — while offline languishes in the low single digits — it’s logical to assume that the four-wall revenue of many retail spaces will

“Given the massive shift in the market to online, and the corresponding shift to using stores less as a distribution channel and more as a media channel, we must completely rethink the way we measure the productivity and contribution of physical stores.”

decline. But does that mean the store is less important? Absolutely not. But it does demand that we measure its value differently.

My friend Rachel Shechtman is the founder

distribution, and newsprint then dominated.

of Story, an early pioneer in the realm of

The advent of radio allowed for new levels

experiential retail. I was speaking with Rachel

of both immediacy and reach. Soon after,

recently about how retail is measured. She said,

television became the primary hub from which

“Media has always been effective wherever

customers received their information. Today,

people gather in numbers. All you need is

digital media has largely displaced all others as

a message and an audience and voila! You

the primary social campfire we gather round

have a media channel.” And she’s absolutely

to know what’s happening, what’s new, and

right. A thousand years ago, that gathering

what’s next. But with the cost of that media

place was the market bazaar, where people

now soaring and its effectiveness becoming

socialized, gathered news and information,

marginalized, retailers that intend to survive

and, of course, discovered merchants and

the next decade will have to begin not only

must-have products. Then, the printing press

treating their physical assets as media but also

became the more efficient means of media

measuring them as such.

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FEATURE // EXECUTIVE ROUNDTABLE

Transforming the retail shopping experience to meet evolving consumer needs and behaviour // By Sean Tarry There’s no denying the fact that the past two-

// Presented by: Snap Inc. Canada MODERATOR

plus years have challenged retailers across the

Matt Bolivar

country. Social restrictions and government-

Retail Lead, Snap Inc. Canada

imposed lockdowns threatened their operations, precipitating an accelerated digitization of the industry. The combination of a changed

PARTICIPANTS

environment and the rise of the digital revolution has influenced alterations to consumer behaviour

Scott Arsenault

and preferences, alterations that are most

CEO, Ren’s Pets

noticeably reflected in the recent escalation of e-commerce and continued increases in online activity. In short, the impacts of the pandemic have resulted in a critical industry-wide rethink concerning the experience that’s offered to the Canadian consumer across the many channels within an expanding retail ecosystem. But who is today’s Canadian consumer? And what are they

Drew Green CEO and President, Indochino

Meghan Roach Chief Operating Officer, Roots

seeking from the brands that they shop with?

In order to answer these questions, Retail Insider the magazine brought together some of the

Rohit Thosar Sr. Manager, Digital Performance Marketing, Walmart Canada

brightest leaders in and around the industry for the first installment of our ‘2022 Retail Executive

Michael Ward

Roundtable’ series. With a focus on exploring the

CEO and Chief Sustainability Officer, IKEA Canada

impacts of the digital age, our roundtable panelists discuss the ways in which retailers across the country are keeping up with the technological curve while continuing to find ways to improve and enhance the customer experience.

18 | Retail Insider the magazine | Issue One

Livia Zufferli Consulting partner, Customer & Marketing, Deloitte Canada

MATT BOLIVAR:

The Canadian consumer

continues to evolve, exhibiting tastes, preferences and behaviour that have been accelerated by impacts of the pandemic.

They are moving online to research and purchase products like never before and are becoming increasingly comfortable traversing channels amid an expanding retail shopping journey. Considering these things, who is today’s Canadian consumer? And what are they seeking from the retailers and brands they shop with?

DREW GREEN:

47%

Optimistic about the future Despite the fact that 81 per cent of Canadians are concerned about the rising prices of everyday purchases, nearly half are confident that their financial situation will improve within the next 3 years. (Deloitte Global State of the Consumer Tracker, March 2022)

The last couple of years have

been incredibly tough for a lot of Canadians, presenting them with quite a bit of change

ways of receiving goods. They’ve never been

to work through. As a result, we’ve noticed a

more prepared with information and an

significant change in the ways the consumer

understanding of what they want and what

is interacting with our brand. There’s been a

they’re looking for. And they’re increasingly

massive shift toward online. But the Canadian

expecting to be understood by their favourite

consumer still loves retail. They’re looking for

retailers and communicated to in ways that

an experience and want to have fun again. And

bring value to their lives.

they’re willing to pay for excellent experiences.

ROHIT THOSAR: SCOTT ARSENAULT:

People still really like the in-

Along with a massive uptick in

online consumer activity, shopping behaviour

store experience. But there’s a shift happening.

in-store has also been impacted by factors

The Canadian consumer wants to shop the

like supply chain disruptions. Today, it seems

way they want to shop, crossing channels with

that there are three cohorts of Canadian

ease, leveraging a number of different modes

consumers: the loyalist who will shop with their

to communicate with brands. And they don’t

favourite brand no matter what; those who will

want to be exposed to traditional ads. They

explore substitute brands if products they are

want content to be fun, relevant and quick.

looking for are not available; and consumers

And it’s got to be content that is worthwhile –

who don’t want to spend time exploring

information that’s rich and curated especially

substitutions and will leave for a competitor if

for them – in order to engage them.

they don’t find what they’re looking for.

MICHAEL WARD:

The Canadian consumer has

MEGHAN ROACH:

A recent brand health survey

never had so many choices within this evolving

that we conducted indicated that there are still

omnichannel environment. It’s never been

a number of people who shop only in stores.

easier for them to access the offering of

However, the number of consumers shopping

innovative new business models and different

both in-store and online has increased. What

therimagazine.com | 19

this means to me is Canadians do not want to be limited when they shop. They want to be able to shop with their favourite brands however, whenever and wherever they want within a seamless omnichannel experience.

As a result of safety and security

LIVIA ZUFFERLI:

reasons, there was an accelerated shift by the consumer toward digital channels at the start of the pandemic. In conjunction, as a result of a number of different factors, we also saw a shift in what the Canadian consumer was valuing and buying. So, what and how people

97%

Digital investment The majority of Canadian retail executives (77%) expect revenue growth for their companies in 2022. And, nearly all of them plan to increase their digital investments in order to help mitigate risks and drive that growth. (Deloitte 2022 Canadian retail outlook)

have been buying over the past two years has changed. But, as health concerns related to the pandemic decrease, consumers are feeling

making the IKEA brand more accessible and

more comfortable returning to physical store

our experience more convenient to meet the

environments, which will revert their behaviour

evolving needs of the consumer.

back to more of a hybrid form of shopping.

ROHIT THOSAR: MATT BOLIVAR:

Given the recent and continued

Throughout the pandemic

Walmart has maintained its focus on the

rise of e-commerce, in combination with an

consumer and their evolving shopping

ever-expanding retail ecosystem that offers

habits. Because of the shift toward online

a multitude of channels and modes by which

purchases, we enhanced our systems to be

consumers can shop with brands, the retail

able to adapt to these changing preferences.

operation has been forced to shift and pivot

We’ve also put a lot of effort into improving

in order to remain relevant and successful.

the digital experience for customers, including

How has the accelerated digitization of retail

functionality and ease of use, both for desktop

changed the way organizations operate in

as well as mobile. And, we’ve also continued

order to continue servicing the customer?

to develop our modes of product delivery and transfer in order to satisfy the convenience

MICHAEL WARD:

We went from having single-

needs of the consumer.

digit online sales to 30 per cent overnight as a result of the pandemic. The fundamental work

DREW GREEN:

for us initially was in designing and executing

before we opened any of our showrooms.

a fulfillment network that would allow us to

From the ground up, we’ve built a digital retail

serve that increased volume and to continue

experience that’s mirrored within our physical

growing in all the different channels. We also

locations. It allows our customers to easily

needed to build the digital infrastructure

switch between channels, which is key for our

that would enable this shift. In addition, we

business model. For us, especially in light of the

wanted to make sure that we focused more on

change and disruption that’s happened over

20 | Retail Insider the magazine | Issue One

We were an online business

the past couple of years, it’s going to be really

identifying our VIP customers and treating

important to continue innovating, making the

them as such with special rewards and offers.

experience we offer for the consumer better and more consistent.

MATT BOLIVAR:

Further considering the forcing

functions of digitization, an expanded retail MEGHAN ROACH:

At Roots, we are fortunate to

ecosystem and rapidly evolving consumer

have one pool of inventory that customers can

behaviour, the ways in which retailers

access in whatever way they want, whether

communicate and engage with their

physically in-store or through our online

audiences is transforming. In order to satisfy

channels. It allowed us to fulfill e-commerce

the communications needs of the consumer

orders from our stores during closures, and,

and remain at the fore of their thinking, where

we made the necessary investments to ensure

and in what ways are they best engaged and

we had the capabilities to support in-store or

introduced to a brand’s product and offering?

curbside pick-up. For me, it is always about understanding how the customer is shopping

LIVIA ZUFFERLI:

Over the last few years in

and in which environments they feel most

particular, there’s been a shift in Canadian

comfortable, and providing them with the

media dollars toward digital channels. However,

appropriate options to access our products.

it’s critical for Canadian retailers to consider their brands and leverage the insights of their

LIVIA ZUFFERLI:

Digital technologies pose

current and desired customers in order to

potentially enormous benefits in automating

understand where to place their media and

parts of the supply chain and utilizing data

how to position their messages and content.

in smarter ways to create greater accuracy

A channel mix and plan should be developed

around forecasting. If there are out-of-stock

based on knowing the audience and possessing

issues at a store, many consumers will seek

an awareness of their lifestyle needs.

out substitutes. Over the next 12 months or so, the industry will be paying a lot of focus on the supply chain, leveraging technologies even more in order to ensure a more seamless experience for consumers.

SCOTT ARSENAULT:

E-commerce was not new

93%

Channels of choice

to Ren’s Pets. But, when you’re looking at

An overwhelming majority of Canadian

servicing the customer online, continuous

executives believe that the consumer

improvement is a must in order to satisfy

expects a seamless experience with

their evolving needs. With respect to email

brands, despite the channel they engage

communication with consumers, we’ve put a

on. A further 80 per cent believe that

lot of focus into providing something of greater

the consumer is increasingly seeking

substance and relevance to the consumer

experiences. (Deloitte 2022 Canadian

through increased personalization. In addition,

retail outlook)

we’ve spent time throughout the pandemic

therimagazine.com | 21

MEGHAN ROACH:

Consumers are looking to be

SCOTT ARSENAULT:

In the digital age, we’re finding

engaged in different ways across the various

that the best place to communicate with

digital channels. And they’re looking to build

our customers is through digital channels,

relationships with brands rather than simply

leveraging influencers and pet-approved

buy product from them. From our perspective,

programs that have an already established

leveraging digital channels is all about building

following to reach both existing and

a community and communicating with our

prospective customers of the brand. Showing

consumers through the development of

people the value of a product in a real-world

curated content that goes beyond our product.

example and setting, especially when it’s

It’s also about conveying the brand’s values

performed by an expert or specialist, can have

and messages around the things we stand for.

a profound impact on engagement.

DREW GREEN:

Diversification is critical with

ROHIT THOSAR:

When it comes to engaging with

respect to communication and engagement.

the Walmart consumer, it’s important to be

No retailer wants to rely on one channel or one

present on the channels where they’re spending

way in which to reach consumers. Spreading

their time. However, it’s becoming even

out media spend while leveraging data to

more important to understand exactly when

understand the value in that spend helps to

consumers are active on those channels and

inform decisions around communication and

when they have reached a point of need. When

the ways to engage customers most effectively

you’ve developed this understanding of the

and efficiently. And, developing meaningful,

customer, you can then find the right balance in

committed partnerships with the right

your communication to them, reaching them in

individuals and organizations is also key in

the right place at the right time.

helping to amplify your brands message.

22 | Retail Insider the magazine | Issue One

MICHAEL WARD:

For IKEA, engagement is all

about attraction, building an emotional connection and then activation. To do this most effectively, we make sure to focus on our offer of affordability and accessibility and messages of

The power of AR •

use of AR is prompting retailers

responsibility around leaving a positive impact

within the industry to explore its

on the planet, people and society. To create this

applications and ways it can help

engagement, we’re increasingly leveraging digital channels from web and social to peer-topeer community platforms as we continue to hone our communications and engage with our customers in the digital age.

MATT BOLIVAR:

As we hopefully begin to exit

the pandemic and continue to approach a

enhance the customer experience.

• •

a branded AR experience.

•

experience they provide like never before.

In your estimation, how can technologies like augmented reality help enhance and support customer engagement, both in-store

Nearly 3 in 4 consumers say they’re willing to pay more for a product that promises the total transparency that AR can provide.

•

Interacting with products that have AR experiences leads to a 94% higher

opportunity to set a new standard for service and differentiate themselves through the

Brands are 44% more likely to be considered by consumers if they have

an increasing desire for experiences. environment, presenting merchants with the

75% of Canada’s population will be frequent AR users by 2025.

‘modified normal’, Canadians are expressing This extends most notably into the retail

A rise in consumer adoption and

conversion rate.

•

AR-guided purchases led to a 25% decrease in returns.

(Snap Consumer AR Canada Report 2021)

and online, and elevate the retail shopping experience to another level?

MICHAEL WARD:

We’re currently exploring the

ways augmented reality technology can inform customer decisions or make them easier. We already have an augmented reality app called ‘IKEA Place’ that allows customers to upload pictures of rooms in their homes in order to see what different pieces of furniture might look like. It’s an incredible assistance and support for our customers in meeting their design needs. The most important thing to consider when implementing new technologies is whether or not they’re going to complement your offering with something new and useful.

therimagazine.com | 23

MEGHAN ROACH:

Augmented reality will soon start

ROHIT THOSAR:

If you remove all of the likes

to play an important role in helping certain

and dislikes preferences from the in-store

brands enhance the service and experience

and online shopping experiences, one of the

that they provide for consumers. Importantly,

biggest differentiators between the two is the

however, its use has to link seamlessly with

ability to see a product in front of your eyes.

our physical stores as well as our e-commerce

Augmented reality helps retailers and brands

platform and digital channels. It can help

close that gap quite a bit. It’s not applicable to

brands offer an experiential layer and aid

all categories. However, for others it presents

consumers in virtually trying on products.

the potential to seamlessly fit into the

There are a lot of potential applications that will

shopping journey, adding a unique layer to the

continue to become more relevant as we move

customer experience.

forward.

LIVIA ZUFFERLI: DREW GREEN:

There are so many amazing

In order for brands to begin

exploring and testing the use of augmented

opportunities available to the retailers that

reality and other immersive technologies,

have the resources to experiment with

they really need to possess a crystallized

technologies. We’re always pushing ourselves

understanding of the brand and what it stands

in order to understand where and in what

for. And, above all, the technology needs to help

way different technologies would help our

retailers provide customers with an experience

customer and enhance their experience with

and an extension of the brand’s offering that’s

us. But we’re very cognizant of the fact that in

authentic while creating a greater sense of

order for us to leverage a certain technology,

accessibility and deepening relationships with

it will need to be extremely effective and help

customers that go far beyond the transaction.

to build on the personalized service that we already provide to our customers.

There are a couple key takeaways from this dynamic and engaging discussion and the

SCOTT ARSENAULT:

It’s been a really difficult year

oft-poignant insights provided by the panel

for most retailers. So, I think we might see a bit

of leaders. It’s been a difficult last couple of

of a pause concerning the implementation of

years for the industry – a period of time that’s

this kind of technology as much of the industry

challenged the acumen and resolve of many.

catches its breath. Having said that, however,

However, it’s also been a period to rethink,

there is obviously big potential in the use of

recalibrate and reimagine retail and to explore

augmented reality. For pet owners, diet and

how the use of innovative technologies can

the health of their pets is most important, with

help transform the shopping experience to

obesity their number one concern. We’ve been

meet the evolving needs and preferences

wondering how we might be able to use this

of a changed consumer. And, based on this

technology in order to take pet owners on a

conversation, it seems that the next year-and-

journey by having them upload a picture of

a-half or so is going to be extremely significant

their pet and then helping them visualize the

for the industry and a truly exciting time for

effects of a changed diet.

retailers and consumers in the country.

24 | Retail Insider the magazine | Issue One

On average, over 250 million Snapchatters engage with augmented reality daily.

Meet the Snapchat Generation.

Learn more at forbusiness.snapchat.com Snap Inc. internal data Q1 2022.

therimagazine.com | 25

The expanding Canadian retail landscape Retail Insider Media Ltd. is pleased to introduce this informative online portal containing all of the latest news and announcements concerning international retailers entering Canada and homegrown businesses expanding their operations.

Click here to find out more

26 | Retail Insider the magazine | Issue One

therimagazine.com | 27

FEATURE // PLANNING AND STRATEGY

At the helm of inflation, supply chains, and greed Retailers across the country plan for the worst amid continued disruption and disarray // By George Minakakis Supply chains have always been the lifeline for many retail businesses. They have traditionally operated quietly, behind the scenes, making everything look seamless when it comes to filling stores and delivering products to consumers who might have ordered online.

However, they are no longer hidden. And, no pun intended, they are often the vessel that guides the performance of merchants and their businesses.

Today, retail businesses everywhere are bracing themselves to contend with any future disruptions that might hinder their ability to keep their physical and virtual doors open.

As a result, the most crucial conversations in retail executive ranks and board meetings are about getting high-value priority merchandise into distribution centres, stores, and ultimately the hands of consumers. The second most pressing item is understanding how to compete in an inflationary marketplace. Both issues are related and have a critical impact on future operations.

There is, unfortunately, a great deal that is out of retailers’ control. Cumulatively, the issues

28 | Retail Insider the magazine | Issue One

therimagazine.com | 29

stem from locating a container, securing space

of higher consumer demand per se, rather

on a cargo ship, relying on expeditious ports,

the results of a backlog of demand. And,

and finding a transport company to deliver the

that demand costs a lot more than it did two

goods. Today, with our limited capacity, either

years ago to transport to the western world.

by structure or design, moving goods and

How much more? In January 2021, the cost to

product is slow and costly. And, if that doesn’t

ship a forty-foot container was $4,317 USD. In

complicate things enough, virus-related

March of 2022, the price was $15,834. In 2019,

shutdowns in China, long queues of containers

an average container cost $1,473, according

waiting to be shipped, and the Russian attack

to Freightos Data, for all routes. The largest

on Ukraine add even more complexity. Goods

shipping container manufacturing comes from

destined for the EU, usually sent by train from

China, producing 85 per cent of all containers.

China through Russia, have now been diverted

Around 2010, China began to cut back

to ocean transport, adding more capacity and

production shifts and the volume of container

price pressures on the system. And, of course,

units made. The seven largest shipping

the dockworkers are talking about potential

container companies control 78 per cent of

strikes in the U.S.

all ocean transportation, and some belong to alliances. The problem inherent is that there

We all know that the cost of supply chains

are not enough large shipping companies

is driving inflation. However, it is not a result

to offer competition, and the alliances are creating bidding wars for space.

In addition, as of late, shipping companies have begun using smaller ships in hopes of disembarking cargo faster. However, smaller

The cost to ship a forty-foot container

$15,834

vessels do not solve the issue entirely because many of them are stuck at sea waiting for their turns. Moreover, they are charging customers for that wait time. Additional inflation!

What are governments doing?

(USD)

Nevertheless, few, if any, regulatory bodies have oversight of this matter. Yet, there is plenty of political finger-pointing concerning who owns the cause for inflation, ultimately

$4,317

misleading the public. Governments, and even the World Trade Organization, have no

$1,473

oversight regarding price negotiations. Keep in mind that there are a lot of brokers in the middle of this also making money. Ignoring

During 2019

January 2021

March 2022

30 | Retail Insider the magazine | Issue One

the root cause and hoping that monetary policy is the remedy will not make the problem

go away. And these sanctions on Russia

Quite the contrary - they may be trading

have supply chains scrambling on all related

down in quality and or quantity. However,

commodities. Therefore, the potential for more

even in food categories, prices accelerate and

significant delays and higher costs is inevitable

packaging or portions are shrinking. Not unlike

and, in fact, already happening. Catching up

the U.S., Canada remains a primary producer

to a backlog will not be enough to reset the

of milk and meat products. The problem is

shipping costs.

consolidation in many sectors and not enough competition, which allows for higher prices.

Monetary policies are playing a part in creating new problems, using old traditional

In March, we conducted a poll (1,459 responses)

methods to try and bring inflation in line. While

asking where most consumers will make

economists point to supply and demand, or

changes to offset inflation. The largest group

inelasticity in conventional transportation of

(41.9%) plans to cut back on everything and

goods (ship and container availability), retail

save. The next largest group (24.8%) plan to cut

prices will remain higher. They will climb

back on going out, 15 per cent plan to spend

until lower consumer demand puts enough

less on vacations, and 18.3 per cent plan to

pressure on the system to lower pricing.

make no changes. It is a clear message that

However, consumers are not spending more

most consumers are very aware of the current

money; they’re spending it differently. Instead

financial challenges faced, as well as those that

of services and vacations, they’re buying

may be on the horizon.

more tangible goods. The retail revenue increases are supplier and transportation-

What does this do to retailers?

driven inflation. So, what does overall retail

Having saleable and current merchandise in

transaction growth look like? That is not a

all cases is necessary to keep the doors open.

number readily available.

However, the higher costs of receiving that product cannot be absorbed, resulting in a

Although, for January and February of 2022,

pricing challenge for retailers. The question

Mastercard reported that Canadian retail

internally for most merchants is around the

spending, excluding auto sales, was up

amount of margin that should be left on the

4.3 per cent and 6.2 per cent, respectively,

table in order to keep driving traffic. And, the

and inflation (consumer price index) was

answer depends on the financial tolerance of

5.1 per cent and 5.7 per cent for the same

each business. Consumers will be looking for

periods. Comparatively, inflation for the same

the highest value proposition with the best

timeframe in 2021 was about 1 per cent and 1.1

quality at the best price that they can afford.

per cent. That means that overall transactions were flat over the previous year, and perhaps

Furthermore, as consumers browse more

even less in some categories.

online to shop, no one should wonder whether

What do consumers think?

e-commerce will continue to increase its retail share. It is now a way of Canadian life. We

Consumers are not in the aisles of store shops

expect supply chain issues to continue well

bidding up the price of apparel and food.

into 2023, combined with higher prices. This

therimagazine.com | 31

timeframe will bring retailers through four

that pricing is below inflation, which means

years of consumer behavioural changes which

finding ways to reduce costs, especially in a

will be permanent, with speed, convenience,

world where margins are everything. A little

and value as the key drivers. This is not to say

more than a few decades ago, during our

that stores do not matter, nor that consumers

last inflationary periods, retailing was less

are not looking for experiences. However,

complicated. There was more local sourcing.

customer experiences during inflationary

E-commerce and digital marketing were just

periods become more about customer

ideas. And the metaverse was simply a phrase

expectations around continual improvements

used in science fiction novels. Nevertheless,

concerning service and product innovation.

the increased cost of goods and labour drove

How does a retailer deliver that effectively with

production to Asia. Today, if transportation costs

inflation eroding consumer spending power

don’t come down, retailers will have no choice

and the retail operator’s profits?

but to re-shore locally within North America.

objectives. The first is to improve their ability

Expect the unexpected and plan for the improbable

to compete. Those who control their supply

In fact, it’s essential for retailers to start

chains and have invested in technology with

thinking about re-shoring or near-shoring

strong digital capabilities will dominate over

production and sourcing. If the industry

the next two years. The second is to ensure

must pay higher prices for goods, they might

In the short term, retailers have two

32 | Retail Insider the magazine | Issue One

as well say ‘made at home’ or ‘near home’.

However, there is no justification for such

These choices are good on two levels. One,

high costs. The costs of delivering these

it strengthens the western economies and

goods are solely driven by opportunism and

creates jobs that have evaporated to foreign

unforgivable greed. There is so little end-to-

nations for too long. And, it also stems funding

end oversight and regulation in the current

that contributes toward the growth of military

process that it can no longer be relied upon.

spending for authoritarian regimes.

And, given the current war in Ukraine and the host of sanctions on Russia, every retailer

There are also other issues like the fact that

must recognize that our supply chains are

the western world is progressively demanding

only one geopolitical issue in Asia away from

greater environmental and social governance

being crushed entirely, leaving the western

as a society. This may only be possible by

world scrambling to normalize itself. In light of

producing goods closer to home. And, it

these things, and in response to them, it’s in

will also allow for more trusted control -

the best interest of every business operating

something that is not easily found in parts

in North America to rethink their supply

of Asia where there is less governance and

chains and implement new sources closer to

trusted oversight.

home that will result in less volatility, greater control over the processes involved and, in

We don’t need to argue that there is a

the end, provide a platform for further retail

capacity issue in transportation goods.

growth and success.

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therimagazine.com | 33

PARTNER FEATURE //

Solving first, middle and last mile distribution challenges PenguinPickUp’s comprehensive suite of solutions helping retailers save time and money // By Sean Tarry

PenguinPickUp changing the distribution game through service innovation.

34 | Retail Insider the magazine | Issue One

During these times of disruption and

packages and offers retailers a safe and reliable

uncertainty, merchants across the country are

means to warehouse their product. With more

working more feverishly than ever in an

than 30 strategically located PickUp Points

attempt to find greater efficiencies within their

across British Columbia, Ontario and Quebec,

operations while reducing time and cost. And,

the company’s rapid growth is attributable

given the recent accelerated digitization of the

to the innovative suite of solutions that it has

industry – one that’s precipitated a sharp rise

developed for both consumers and retailers. It’s

in e-commerce activity as a significant number

a much-needed solution for retailers, allowing

of consumers continue to adopt online

them to offer consumers a convenient and safe

channels and incorporate them into their

way to pick up their packages. For consumers,

shopping journey and experience - it comes as

it’s as simple as signing up for the service and

no surprise to find many looking at their own

directing your online orders to the PickUp

supply chains to find these efficiencies and

point of your choice. They are notified when

savings. And, according to Patrick Jobidon,

their package arrives and can pick it up by

President at PenguinPickUp, the brands that

presenting their personal PenguinPickUp code

are able to navigate this new digital landscape

at their convenience.

and tighten their modes of distribution and fulfillment will stand themselves apart from

“Our model saves retailers time and reduces

competitors.

their costs,” says Brad Baker, PenguinPickUp’s Vice-President of Operations. “It enables

“The retailers that are currently winning

them to expand their service options to allow

and providing a best-in-class customer

customers to have their online orders delivered

experience are those who have got their

to their home, picked up in-store or picked

distribution right,” Jobidon asserts. “COVID-19

up at a convenient PenguinPickUp location

has led to a surge in e-commerce and an

near where they work and live. Our associates

accelerated digital transformation that is

are focused on providing an exceptional

quickly altering distribution strategies. There

customer experience, by delivering on our

is a heightened need for retailers to create

service standards of Focused, Friendly and

a digital experience that is fast, convenient,

Clean always. PenguinPickUp customers and

and efficient, particularly related to product

partners can trust that their goods will be kept

delivery and transfer. As a result, solving for the

safe and secure, freeing them of any concerns

expensive and complex last mile of distribution

related to ‘porch pirates’ or issues with their

is more critical now than ever before to

condo or apartment building not receiving and

satisfying evolving consumer preferences and

holding packages. Most of our locations also

behaviours.”

provide temperature-controlled storage.”

Saving time and money Founded in 2014 to help the industry

Solving first, middle and last mile challenges

address increases in e-commerce orders,

Baker says uniting people with their things is

PenguinPickUp provides consumers with an

kind of PenguinPickUp’s thing. And because

incredibly convenient way to receive their

of their comprehensive suite of services and

therimagazine.com | 35

solutions, it’s a thing that the company seems to be doing extremely well. Not only are they providing a world-class pickup service for customers, but they’re also helping to reduce retailers’ last mile distribution costs by up to 85 per cent. However, thanks to the company’s innovative model, PenguinPickUp’s services solve for much more than just the last mile alone.

Last year the company developed PenguinPickUp2U, as a transport and

PenguinPickUp offers convenient locations

sortation service.

“PenguinPickUp2U has proven to be an

having less trucks on the road, making

incredibly successful and in demand solution.

fewer stops,” says Baker. “Further, we have

The operation is powered by a great team

partnered with cities like Toronto on programs

of associates and a reliable fleet of vehicles,”

to introduce more cargo e-bikes and micro-

Baker says. “The service allows us to move

mobility solutions to the city. Our zero-

product reliably and quickly from where our

emission e-bikes offer fast and convenient

retailers are – whether at their distribution

delivery, and they make our cities more livable

centres or store locations - and ensure that it’s

by reducing congestion.”

ready for their customer to pick up on-time at one of our locations. We can even deliver to the

Taking care of returns

customers home on one of our state-of-the-art

PenguinPickUp also offers services to address

E-Cargo bikes. Our service is truly white glove,

the complexity of online retail returns; one

end-to-end.”

of the main issues retailers have faced

Environmentally-sustainable

throughout the pandemic as a result of the spike in e-commerce sales.

The very nature of the way the PenguinPickUp2U fleet operates was

“Our stores are well-located in urban markets,

deliberately designed to help reduce the

allowing us to be a convenient and simple

negative impact of single package delivery on

drop off point for customers wishing to make

the environment. Environmental responsibility

a return,” explains Baker. “We sort, aggregate,

is a key priority for the company. They are

and move those returns to the retailer’s desired

mindful of the industry’s footprint and

location. This saves the retailer money and

innovate to introduce more environmentally-

reduces friction for their customer. We recognize

conscious ways to transfer product between

the growing challenge of online returns and

retailers and consumers.

reverse logistics in the increasingly digital market and have implemented programs to help ease

“Our model itself helps reduce carbon by

36 | Retail Insider the magazine | Issue One

that pain point for our partners.”

Continued growth and expansion

mile challenges. Our growth strategy looking

PenguinPickUp has quickly become one

forward is just as ambitious. In fact, this year

of the most trusted and reliable partners

alone, we will be opening an average of two

for Canadian retailers. And, according to

new locations per month, as we expand to be

Jobidon, they have no intention of slowing the

where our partners and consumers want us to

company’s innovation and growth trajectory.

service their needs and ‘unite people with their things’.”

“We’ve grown exponentially over the last few years, particularly throughout the pandemic,

For more information about how

to help bridge market demand and the

PenguinPickUp can help your business save

surge in e-commerce. We’ve rapidly grown

time and money by solving some of your

our network and have accelerated our key

distribution challenges, visit

initiatives, allowing us to become a true end-

www.penguinpickup.com/Home/Retailers or

to-end provider, helping retailers solve some

email info@penguinpickup.com

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therimagazine.com | 37

FEATURE // SUPPLY CHAIN DISRUPTION

Cauldron of chaos As more negative forces are added to the mix, the disruption and disturbance around the retail supply chain continues to grow // By Mario Toneguzzi

Numerous headwinds have collided in recent

Founder of RetailAID.ca, describes the supply

years creating a perfect storm within the global

chain network as “chaotic.” These ‘random

supply chain network, wreaking havoc and

events’ have been compressed and have

creating chaos for many retailers as they try to

accelerated, creating a situation that he refers

navigate through the tempest.

to as a “cauldron of chaos.”

Over the course of the past two years, the

“We have not only lived through two years

global supply chain has been challenged,

of restrictions, which is one whole chunk of

resulting in a damaging impact on Canadian

disruption on its own,” he says. “But there’s

retailers. A pandemic, rail blockades, labour

also been a lot of other events that have

issues at ports, labour shortages, flooding in

been added in the pot. Everything has come

British Columbia, trucker protests, blockage in

together in the last two years, leaving retailers

the Suez Canal, and now a war in Ukraine, have

with the unenviable task of sticking with

all contributed to a strain that’s been placed

what they know has worked previously, and

on the supply network, disrupting an effective

attempting to force things to work in the same

and consistent flow of goods from their source

way today. But they need to rethink this whole

to a consumer who has increasingly turned to

problem. You can’t just carry on as is.”

e-commerce to meet their shopping needs and desires.

Sustained chaos Liza Amlani, Principal and Founder of the

Gary Newbury, retail supply chain expert and

38 | Retail Insider the magazine | Issue One

Retail Strategy Group, says the chaos and

disruption felt throughout 2020 and 2021 has

shortages, supply chain challenges and

been devastating, and is certainly not over.

higher input costs are big problems. And, if the industry doesn’t address them, Canada’s

“If retailers are saying otherwise, it means

economy will suffer.

that they have actually gone through a digital transformation,” she suggests. “They’ve had to

“Everything around the retail supply chain is

adapt and work through changing some of the

incredibly uncertain at the moment,” he says.

ways they do things within the entire supply

“The entire supply chain for manufacturers

chain, from sourcing and merchandising to

and exporters, whether it’s companies that are

planning and go-to-market strategies. But I

bringing finished goods back and forth across

don’t believe that retailers have actually done

the border or companies trying to get parts or

a complete overhaul. The supply chain chaos

ingredients for packaging, is really uncertain.

that we’ve been experiencing is not over by

And it’s having a real effect on companies,

any means.”

which usually manifests in delays. In some cases, it’s financial and hits the bottom line.

Dennis Darby, President and CEO of Canadian

And in many instances, financial hits are

Manufacturers & Exporters (CME), says that

passed along to the consumer. It’s probably

demand for manufactured goods is strong,

not exactly what we expected to be talking

however, the industry is increasingly unable

about two years into the pandemic. And it

to keep up with it, let alone take advantage

looks like it’s going to last for at least another

of the current boom. In his estimation, labour

year or two.”

therimagazine.com | 39

Darby says that although many of the supply

with a plan and the development of a strategy

chain disruptions are global in nature, the

meant to meet the challenges and mitigate

problem still requires significant government

the risks. It’s resulting in a number of different

action such as increasing the inflow of

tactics being deployed by retailers, including

temporary foreign workers and immigrants

the sourcing of goods at a more local level,

to ease labour shortages, providing financial

investing in inventory to have on hand should

supports to help scale-up domestic

issues persist and the embracing of technology

manufacturing, and increasing investments in

as a means to create efficiencies and reduce

transportation infrastructure.

costs throughout their supply chains.

Crisis management

Newbury says companies need to stand

George Minakakis, Principal of advisory firm

back and think about what they are trying

Inception Retail Group Inc., and author of The

to achieve. From a planning perspective,

New Bricks & Mortar Future Proofing Retail,

much more current research is required in

describes the supply chain as an individual’s

order to understand what customers want.

heart pumping blood. When someone has

Traditionally, he suggests, many merchants

cholesterol, blood flow slows down and it

have been resistant to the implementation

creates problems in the body. This is exactly

of technology in their domain, adding that

what’s been happening for retail.

“It’s been a nightmare for a lot of retailers,” he says. “Smaller retailers, in particular, have struggled. Clearly what we’ve seen is the result of many retailers that didn’t have crisis management mitigation. They didn’t really know what was in their control. They didn’t understand what risks they could face, how real the risks were, how likely they were to happen, and what the potential impact might be. Those things were not in place, even for some of the larger players within the industry.

But I’m sure they are now. If they aren’t, they should be. They need to be assessing and mitigating risks on a continual basis.”

Crisis management is a critical layer for any retailer looking to be successful. And, as a result of the disruption and challenges faced over the course of the past two years, many companies are now talking about how to solve some of those internal issues, starting

40 | Retail Insider the magazine | Issue One

“For sourcing, we’ve tended to go to the Far East. It’s cheap.

It has been quite reliable.

The quality has raised.

However, the pandemic’s disrupted that. And now the war, along with a heightened understanding of geopolitical risks, has raised in the minds of some retailers the fact that they need to be thinking about sourcing in a different way.”

– Gary Newbury

they’ve been used to reading stories and going to a handful of trade shows in an attempt to understand what customers need.

Reassessing sourcing

A recent CME survey found:

“There’s some pressure to try and implement tools around artificial intelligence into merchandising in an effort to take some of the mystery out of it,” he says. “And, of course,

8 out of 10 manufacturers facing supply

as we entered the pandemic, we couldn’t

chain challenges say they have been

rely on last year’s information because it was

forced to increase prices and delay

irrelevant. So, it played very much back to the

fulfilling customer orders;

world of wonder of merchandisers where they do it all from the seat of their pants.”

He goes on to explain that retailers also have to look at sourcing differently. Geopolitical

Only 18 percent of manufacturers plan

risks, such as the war in Ukraine, can impact

on sourcing more of their inputs to

the supply chain quite dramatically and quite

Canada in response to these disruptions.

unexpectedly. If they’re heavily invested in

When asked why, 44 per cent cited the

China, they need to be aware of what could

fact that there are no Canadian suppliers

happen there. What happens if the border with

of their critical inputs;

the U.S. is closed again? What happens to the retail supply chain, then? How do they get the goods they need for their business? Retailers may not have understood the geopolitical risk to their businesses in the past, says Newbury,

Just 28 per cent of manufacturers said

suggesting that they’re clearly paying more

they are likely or very likely to relocate

attention now.

or scale-up production in Canada to mitigate supply chain bottlenecks, with

“For sourcing, we’ve tended to go to the Far

the availability and cost of labour as the

East,” he says. “It’s cheap. It has been quite

biggest hurdles to do so;

reliable. The quality has raised. However, the pandemic’s disrupted that. And now the war, along with a heightened understanding of geopolitical risks, has raised in the minds of some retailers the fact that they need to be

Most manufacturers predict that these

thinking about sourcing in a different way.

disruptions will not end this year, but

And many of the options around sourcing

rather some time in 2023 or even as late

are obviously re-shoring it, bringing it back to

as 2024.

Canada.”

therimagazine.com | 41

Boots on the ground

planning and inventory management solutions

However, near-shoring, which is closer to

over the next 12 months or so.

home, such as south of the border or even further south, requires assessment as well to

As it continues to evolve, technology will only

make sure that retailers are not exposed to

bring with it new and efficient ways to facilitate

any one market. In fact, Minakakis believes

the smooth operation of the supply chain

that companies who continue to source from

network, including the use of Radio Frequency

overseas will need to have their ears and boots

Identification which allows retailers to scan

on the ground in order to properly understand

a whole skid of items in seconds. However,

what is happening in those regions.

Minakakis suggests that blockchain has now become one of the more important recent

“If you don’t have part of your management

innovations, and that its implementation

team with boots on the ground in the markets

can be part of every aspect of the supply

that you’re getting supplies from, you’re living

chain, equipping retailers with information

in darkness because you’re trusting that the

concerning the origin and makeup of materials

information you’re receiving from someone

and products. It’s information that he says

else from afar is accurate and trustworthy,” he

can be tracked, allowing them to create

says. “It’s can become a real problem.”

sustainability, quality and trust inside the supply chain.

And he adds that retailers need to have multiple markets that they can rely on so if one

In conjunction with blockchain is the increasing

fails another one can fill the void.

use of artificial intelligence to better manage

“It’s intricate work,” he asserts. “You’re

systems and information, often resulting in

essentially rebuilding your entire supply

better understanding of customers and the

chain as backup. That is part of the mitigation

products being sold in individual stores. Armed

process that’s needed, allowing retailers to at

with this kind of information, says Minakakis,

least minimize their dependency on any one

retailers are supported in making smarter

area.”

decisions that will help their bottom line, reduce

The power of technology

human error and accidents.

Technology has also become critically

“The technology is there to speed up

important to the health of supply chain

productivity and move product in the direction

networks, providing new ways to plan

where it’s needed most so it can be used and

more effectively and control what’s going

sold,” says Minakakis. “As a CEO, I want my

on throughout the entire process. Many of

shelves full. I want to make sure that what

today’s innovations possess the power to

we strategized, what we designed, what we

help companies reduce costs and be more

manufactured and planned to distribute is

productive. And because of all the disruptions

going to be at the stores when we say it’s

and calamity caused over the last two years,

going to be at the stores. And I need all of this

some believe that much more focus and

technology to make that happen.”

resources will be invested in merchandising,

42 | Retail Insider the magazine | Issue One

However, one of the challenges inherent

set to become more critical going forward.

within the traditional retail supply chain,

In fact, some experts have suggested that

says Amlani, is the silos that exist and cross-

perhaps there needs to be a cost to consumers

functional teams that have been created

associated with returns to reduce waste.

within companies that are simply not working together. Everything, she says, impacts the

“What’s happening now is there’s a huge

product journey. And if retailers can’t get the

spotlight on returns,” says Amlani. “Once the

products, or know how they’re made, or who is

public started to question and find out details

making them, that’s a big problem.

related to returns, it enhanced the accountability

Solving returns

of retailers to tackle some of the issues. There’s a lot of room for retailers to do a better job. And,

Although most might think of the supply

they have to now because the issue of returns,

chain as a series of links or connections that

as well as the ways retailers choose to deal with

help retailers move product from origin all the

those issues, are in the spotlight. As a result,

way into the hands of consumers, the retail

a lot of businesses are leveraging technology

supply chain doesn’t end there. Retailers must

that can make it easier for customers to return

also consider the return of goods and create

goods, helping retailers and brands keep costs

solutions that will allow them to effectively

down for returns. In the end, understanding why

and efficiently accept returns, addressing

customers are returning is part of the solution to

concerns around sustainability that are only

making better buying decisions.”

therimagazine.com | 43

FEATURE // HUMAN RESOURCES

The great renegotiation Mental health and wellness issues are coming into sharper focus, becoming the new bargaining chips in retail staffing // By Jana Manolakos

Next generation workers are causing a stir,

neglected for a very long time,” explains retail

raising their fists against the stigma of mental

staffing expert, Suzanne Sears, President of

illness in the retail workplace — an industry

Luxury Careers Canada, a Toronto-based, high-

hard hit by stress, anxiety and depression

end brand recruitment agency.

during the pandemic. With Canadian retailers struggling to attract talent for their brands,

Escalating talent shortage

employees — both full- and part-time — are

The mass exodus of 4.5 million Americans from

cashing in their bargaining chips for improved

their jobs last year as part of what is now called

mental health programs, and it’s leading to

the ‘Great Resignation’, sounded a warning bell

a new staff function: the workplace mental

for Canadian retailers. Although Canada’s labour

health powerbroker.

force participation rate is holding steady at 65.3 per cent, virtually the same as it was before the

“People no longer want to be treated like a

pandemic, retailers, especially in small- and

commodity. COVID has really brought this

medium-sized businesses are finding it hard to

to the forefront as something that’s been

fill vacancies. Sears believes it’s in part because

44 | Retail Insider the magazine | Issue One

business owners have failed to stay current with

educating staff about mental health stigma

employee demands. Competitive salaries are

and the resources available to help them.”

simply not enough anymore.

The commission introduced the National According to Sears, employees are looking

Standard of Canada for Psychological Health

for work-life balance, flexibility, certainty of

and Safety in the Workplace in 2013 and

hours worked and support for wellbeing - all

offers ample resources for retailers and other

factors in mental health. And if they don’t

businesses to tap into.

get it, they’re leaving - even if they don’t have another job lined up.

Bottom-line burden According to the Canadian Association of

The cost of replacing a vacancy is four

Mental Health, the economic burden of

times the salary of that position, adds Sears.

mental illness in Canada is significant, and

“Somebody else has to shoulder more

is estimated to be approximately $51 billion

workloads, customer service goes down,

each year, with $6.3 billion resulting from lost

productivity and morale goes down.”

productivity. By 2041, the cumulative cost of poor mental health to the Canadian economy

Even before the pandemic, employees were

will exceed $2.5 trillion. It’s a number that’s

beginning to question whether the traditional

keeping CEOs up at night. In fact, among 1,500

40-hour work week held true value for them,

business leaders surveyed for its recent Risk

she says. “On average, tenure has gone from

Insights Report, insurance giant Aviva, noted

four years down to two. And pretty soon it

that employee mental wellness ranked third as

may be less than that. The real problem is that

a key concern for company CEOs, next to the

there isn’t a great value proposition. They have

pandemic and cyber threats.

to throw away the old playbook and come up with a new proposition for retail,” she says.

Walmart Inc. Chief Executive Officer Doug McMillon says, “To fulfill our potential, we

It means employers must look at things

must be obsessed with supporting our people

through an employee-centric lens, say the

so they can succeed.” Not surprisingly, the

experts. At the Mental Health Commission of

retail giant was selected as one of Greater

Canada, Liz Horvath, its Manager of Workplace

Toronto’s top employers last December.

Mental Health, explains, “Employees are

With 42,000 full-time and 67,000 part-time

looking for organizations where they have

employees, workplace mental health is a

some stability, some support and respect

big deal at Walmart Canada. The company’s

- where respectful workplace policies and

range of programs focus on physical health,

procedures are in place and being followed,

financial health, development and career

with support and protection for staff dealing

growth and community and environmental

with customers, with staff trained in anti-

impact through such supports as an Employee

discrimination harassment and violence and

and Family Assistance Plan, 24/7 access to a

equipped to respond appropriately when these

mental health practitioner, and even a licensed

things may be happening. In addition to that,

financial retirement advisor. Jamilah Zuzarte,

therimagazine.com | 45

Walmart Canada’s Senior Manager, Associate

HR professionals can play a pivotal role in

Wellbeing, explains the benefits of ensuring

normalizing these conversations, says Tierney.

such initiatives are in place.

“Retailers and other businesses have got to do “Creating a culture of wellbeing that

a better job at helping to remove the stigma

supports mental health requires the support

of mental health,” she says. “If somebody is

of our entire organization as we prioritize

experiencing a mental health concern or issue,

psychological health and safety for our

they need to feel safe to talk about it. And they

associates,” she says. “Leaders on our People

need to feel safe to access the resources and to

team are working to build awareness,

get the support that they need.”

implement training sessions and create support systems to ensure Walmart Canada is

However, this isn’t to suggest, adds Tierney, that

a safe and inclusive organization.”

human resources leaders will be required to

Focus on people

have doctorates in psychology going forward.

For Kris Tierney, Vice President of HR and

“There’s an inherent interest in human

Learning at the 24,000-member Human

behaviour and human psychology within

Resource Professionals Association, the

many HR professionals, but they do need to

pandemic ignited a renewed focus on workers.

know their limits,” she says. “They need to understand how to make available the right

“Organizations historically have looked at HR as

type of expertise or resources as support

an administrative role,” she asserts. “With the

systems for employees. It’s the same as if an

emotional impact of the pandemic on workers

employee had a physical health issue. The

over the last two years, organizational leaders

HR professional wouldn’t try to be an MD or

have recognized that people-related issues and

diagnose what might be wrong.”

mental health have become a priority. They’ve gone to the human experts in the organization.

Creating a culture of support

HR professionals have always had an aptitude

Kristy Cork, Workplace Mental Health

and an interest in this space. But what’s

consultant at Workplace Safety & Prevention

happened and what shifted is the organizational

Services, believes a solution lies in improved

demand for HR to really refocus and double

mental health literacy and creating a “help-

down on these programs moving forward.”

seeking” culture.

At least one in five Canadians will suffer from

“This type of workplace culture can only

mental illness in their lifetimes, but most won’t

be achieved when leaders listen without

seek treatment because of stigma around

judgement, demonstrate care and concern

the disease. According to workplace health

for their employees and offer accommodation

consultancy, LifeWorks, more than two in five

for physical and psychosocial disabilities,” she

Canadians believe their career options would

advises. “In any workplace, including retail

be limited if they had a mental health issue

companies, commitment should always start

that their workplace was aware of. That’s where

with the highest levels of leadership. Their

46 | Retail Insider the magazine | Issue One

demonstration through psychologically safe leadership sets the tone for others to follow.”

Fighting the stigma led George Cope, former CEO of Bell Media, to launch the Bell ‘Let’s Talk’ campaign more than a decade ago.. Today, employees at Bell Media have access to tools, resources and training that supports their mental health and wellbeing.

“Earlier this year, we announced unlimited mental health coverage for team members and their eligible family members,” says Bell Media spokesperson Caroline Audet. “Since the launch of Bell ‘Let’s Talk’ in 2010, more than 18,000 Bell employees and 13,000 Bell leaders have completed mental health training.”

So, what’s the return on investment?

Bell’s initiatives to improve mental health awareness, training and benefits reduced short-term disability claims related to mental health by over 20 per cent, and reduced relapse and recurrence by more than 50 per cent.

At Walmart Canada, the company recently started tracking its investment in employee mental health supports.

Staff feedback and engagement surveys have led the company to add inclusive counselling and to pilot on-site, face-toface counselling - all of which have been positively received by staff.

Six reliable resources for retailers interested in creating a safe, stigmafree workplace: Mentalhealthcommission.ca has developed a toolkit for retail managers that went live May 1, 2022 on the Mental Health Commission of Canada website: www.mentalhealthcommission. ca which currently offers a wealth of resources and kits, like information on the National Standard, anti-stigma training, practices, suicide prevention in the workplace, flexible work-life, how to help someone in mental distress, a guide for post-secondary school students and a practical toolkit to help employers build an inclusive workforce.

Wellnesstogether.ca offers services that range from basic wellness information, to one-on-one sessions with a counsellor and participation within a community of support.

Workplacestrategiesformentalhealth.com runs workshops for HR, health, safety or wellness professionals, and offers other useful services.

Connexontario.ca has round the clock access to information for mental health and addictions services and recently launched a texting service.

Thinkmentalhealth.ca is developed for business owners by Ontario’s health and safety system partners, to provide informative and actionable mental health resources to help create a psychologically safe and healthy workplace.

WSPS.ca offers a wide range of programs and services for a safer working environment in Ontario.

Anthony Viel, CEO, Deloitte Canada,

therimagazine.com | 47

believes there’s both an economic and moral

double—valued at $2.18 for every dollar spent.

imperative for Canadian employers to take

According to LifeWorks, improved mental

action on their employee’s mental wellbeing,

health scores mean greater productivity - a

recognizing that the cost to the Canadian

difference of 41 workdays per year.

economy of poor mental health in workplaces is estimated to be $50 billion annually.

“Workplaces can expect to see a decrease in absenteeism, turnover, quality-related issues,

“Organizations committed to delivering and

conflict and presenteeism,” says Cork. “It is also

measuring impactful employee wellness

likely there will be an increase in satisfaction,

programs are creating healthier workplaces

engagement and productivity.”

and seeing investments in their people’s mental health pay off,” he says.

Still today some CEOs and executives resist the “take care of your employees and they’ll take

In fact, a 2019 analysis by Deloitte revealed that

care of your business” idea, says Tierney. But

companies with mental health programs in

over the last two pandemic years, employees

place for one year had a median annual return

are demanding greater mental health

of $1.62 for every dollar invested. For companies

supports, and are willing to leave their jobs

with programs in place for three or more

over it, shifting the ‘Great Resignation’ to the

years, the median annual return is more than

great renegotiation.

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therimagazine.com | 49

FEATURE // BRAND PROFILE

On the back of its people Peavey Industries LP continues tremendous growth and success as a result of a strong employee and brand culture // By Sean Tarry

Teamwork and collaboration critical components of Peavey Industries LP culture

50 | Retail Insider the magazine | Issue One

The retail industry is constantly evolving.

The power of people

Driven by merchant innovation, market shifts

The company, which operates the Peavey

and behavioural trends and preferences, it’s

Mart, Ace Hardware (Canada) and MainStreet

an industry that often moves at a breakneck

Hardware brands, has been extremely busy

speed that requires swift decisions and

over the course of the past several years,

accurate execution. It’s an environment

building a national presence and the industry

that presents those involved with equal

expertise that Simmonds refers to. In fact,

parts challenge and reward. Today, both the

just twelve months ago, Peavey Industries

challenges and rewards have been intensified

completed the conversion of 47 TSC Stores to

as a result of an increased use of technology

Peavey Mart stores following its acquisition of

and associated digital acceleration within

the brand back in 2017, adding to its 40 existing

the industry. Most significantly represented

Peavey Mart locations and allowing the brand

by an ever-expanding ecosystem of channels

to expand beyond its already established

for consumers to shop, explore and engage,

presence in British Columbia, Alberta,

it’s an evolution that’s prompting changes to

Saskatchewan and Manitoba to include

the ways in which retail operates. However,

Ontario. In conjunction with the conversion,

what hasn’t changed, says Dave Simmonds,

the company also launched its brand new

Chief Operating Officer at leading farm and

peaveymart.com website – an enhancement

ranch retailer Peavey Industries LP, is the

to the company’s digital capabilities meant

unmatched importance of good people in

to service the evolving needs of today’s

supporting the enterprise, executing on

consumer. They are achievements recognized

the brand vision and ultimately ensuring

by Nadine St. Denis, the company’s Vice

that exceptional service is provided for the

President of People & Culture, who furthers

customer.

Simmonds sentiments, adding that the Peavey Industries employee is integral in enabling

“Peavey Industries has grown substantially

everything that the company does.

over the course of the last number of years,” he says. “Throughout this time, we’ve been

“Our employees are an incredible group of

very conscious about bringing expertise

people who are very much at the core of the

possessing a range of skillsets into a number

Peavey Industries brand,” she asserts. “They

of different roles within the company. And,

absolutely demonstrate the values that the

because many of our employees are familiar

company has worked so hard to maintain,

with the needs of a ranch lifestyle, they’re a

contributing to a culture that reflects the

really good reflection of the communities that

fabric of the brand. We’re a collective at Peavey

we do business in, bringing their skills and

Industries who are very forward-thinking yet

knowledge to our stores across the country.

respect where the company has come from

Our people have been critical in ensuring

and how it’s grown – growth which is very

our growth and success. They’re a collective

much based on our understanding of the

that drives our corporate values of respect,

Peavey customer and our relentless pursuit

integrity and caring and go a long way toward

of excellence with respect to delivering the

upholding our strong culture.”

best service possible to them. And we all

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realize that, despite our roles, whether we’re

collaboration. And they also receive a lot of great

working in an office, warehouse or one of our

response from our employees. However, beyond

stores across the country, our focus is always

these benefits, what the company is perhaps

on providing the customer with knowledge

most proud of is the focus that’s paid toward the

and service that consistently exceeds their

growth and development of Peavey Industries

expectations.”

talent. It’s a focus that starts at the top and one

Care and respect

that conveys the message to our employees that they have a career at Peavey and not just

St. Denis goes on to explain, however, that the

a job. To support this message, we provide

reason for the loyalty and dedication of the

excellent opportunities for promotion and

Peavey Industries employee is not shrouded in

advancement within the company, may support

a secret. It’s the composite result of a culture

the continuation of employees’ educations

that’s been built on the foundations of genuine

and provide strong coaching and mentoring.

care. It’s care that’s evident in the company’s

When you treat your employees with this kind of

many programs and initiatives, including

respect, caring about them as people, they tend

its ‘Inspire Fabric’ in which employees can

to feel valued and want to remain in their jobs

recognize the efforts of their coworkers who

and move through the company as they build

have gone above and beyond within their jobs,

their careers. It benefits them tremendously. But

nominating them for special draws involving

it benefits the company even more because we

substantial prizes. In addition, the company

don’t lose our talent to competitors.”

offers its employees, whether full-time or parttime, working in a distribution centre or in a senior management position, the chance to buy in as a legitimate owner of Peavey Mart through a broad-based employee ownership plan. And, it facilitates its ‘Peavey Cares’ program which is funded entirely by Peavey employees in order to help fellow employees in times of financial need. They’re incredible benefits that St. Denis says are fundamental in helping to maintain the shape of the Peavey Industries culture, adding, however, that they’re but a few examples of the ways in which the company takes care of its people.

“Many of the programs and initiatives that the company has in place around people are rooted in respect, integrity and care,” she says. “They often highlight some of the characteristics that the Peavey Industries culture thrives on, including support and

52 | Retail Insider the magazine | Issue One

“When you treat your employees with this kind of respect, caring about them as people, they tend to feel valued and want to remain in their jobs and move through the company as they build their careers.”

- Nadine St. Denis

Impact on customer service Its retention rates and employee satisfaction are impressive, to say the least, and very much a vital component of the company contributing to its consistent success and continued growth. But it isn’t just the employee of the company that enjoys the benefits of a strong brand culture. By empowering its people and cultivating a firstclass culture through its robust programs and initiatives, Peavey Industries is also able to continuously deepen their understanding of the customer, strengthening their relationships with them and allowing the company to deliver the very best service and experience possible. It’s a correlation that’s most noticeable in the scores of happy Peavey customers across the country, says Jest Sidloski, the company’s Vice President of Marketing, adding that a happy customer is a direct by-product of the culture that’s been created within the company. And, he explains, it’s a culture that’s been developed organically through the years and contributed to by every Peavey employee.

“One of the most unique things about the culture at Peavey Industries is the fact that it was not curated by an executive team,” he points out. “It’s a culture that’s been built over time with the help of employees throughout the entire business. It’s also a culture that’s extremely focused on the customer. And we make sure as a team that everyone’s equipped to do their jobs to the best of their ability and empowered to make decisions in order to provide the service required to meet and exceed our customers’ expectations.

The culture at Peavey enables this kind of focus, nurturing innovation and creativity and encouraging everyone at the company to

Treating employees with care and respect for generations.

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bend over backwards for the customer. When you strip away all of the complexities of the retail business, the objective should still be about people and helping to fulfill their needs, whether they are employees or customers of the brand. If an organization can get that right through a strong employee and brand culture, a real community that reflects the values of the company begins to form, creating something really special.”

Supporting further growth The rapid growth that Peavey Industries has experienced over the course of the past number of years is impressive. So, too, is the digital transformation that the brand recently underwent. What’s more impressive, however, is the fact that the company doesn’t seem to be showing any sign of slowing.

Simmonds says that Peavey has plans to significantly grow its store count even further by focusing on expanding its Ace Hardware corporate and dealer networks. He mentions plans to continue tightening and making tweaks to areas of its operation where there are opportunities for improvement. And, he asserts, the culture of the company and contributions of every Peavey Industries employee will be critical in helping to achieve

“When you strip away all of the complexities of the retail business, the objective should still be about people and helping to fulfill their needs, whether they are employees or customers of the brand.”

– Jest Sidloski

these goals and targets.

“Over the next 12 to 18 months or so, we’re going to be zeroing in on our execution of our

be identified and seizing opportunities as

processes and systems and managing through

they arise. And, again, all of these things are

some of the changes and shifts that we’ve

done with the consumer in mind, executing

made recently as a company. In addition, we

in order to make sure they’re satisfied. That’s

really want to make sure that we remain as

our mission. And to do this, you need the very

nimble as we possibly can as an organization,

best people and culture. We’re really proud at

keeping an eye on inflation and other cost

Peavey to say that we have both, enabling us

increases. We’re very conscientious about

to continue moving forward and grow even

our future, managing risks where they may

further as a company.”

54 | Retail Insider the magazine | Issue One

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Proud Digital Advisor therimagazine.com | 55

DATA POINTS //

Digital Transformation is big business.

But what is the retail industry saying about it?

Data and analysis brought to you by eCommerce Canada and Koat.ai

Given the accelerated digitization of the world around us that’s occurred over the course of the past two years or so, retail digital transformation is big business. Estimated to currently be a $1.8 trillion business opportunity, it’s one that is anticipated to grow to $2.8 trillion by 2025. So, what’s the chatter around digital transformation? And, how do we see it impacting the retail industry in 2022?

Leveraging a collection of trend, keyword, sentiment and data insights tools, we attempt to provide a better understanding of the core topics and influences around digital transformation. Here are our key data points:

Keywords The retail industry is one of the centrepieces of online discussion around digital transformation. A

56 | Retail Insider the magazine | Issue One

quick look at the leading associated topics surrounding the keyword ‘digital transformation’ shows that ‘retail industry’ is the most commonly related phrase, followed by ‘artificial intelligence’, ‘COVID 19 pandemic’ and ‘financial services’. So, it’s safe to expect retail to be a central theme in digital transformation for years to come.

Sentiment The bend on this subject is less clear. There’s very little bias towards whether digital transformation is positive (2%) or negative (1%), as industry and consumer sentiment is generally 97 per cent neutral.

The topic doesn’t seem to create excitement or fear. At least, not yet.

Trending Not surprisingly, digital transformation is a trending topic. Keyword demand suggests a notable spike in online material being created around digital transformation, which has resulted in a 12 per cent increase in published content over the past 12 months when compared to the same timeframe from April 2020 to March 2021.

When to post?

What if your company wants to grab on to this hot topic and create a Tweet or blog post to attract new eyeballs? We’d suggest Tuesday mornings around 9am, as that’s the time when publishers are sharing their digital transformation news. And we sure hope there’s a method to that madness.

We hope these Data Points help start conversations among your teams around the topic of digital transformation and the opportunities available to retailers embarking on the journey. In fact, we’d love to receive your feedback and recommendations for future Data Points topics to explore at craig@retail-insider.com

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58 | Retail Insider the magazine | Issue One

In the next issue…

• • •

Exploring the continued evolution of e-commerce Dissecting the consistent success of the luxury sector Inside the latest in grocery innovation

PLUS: The future of Canadian retail

Distributing Summer 2022

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