Retail Insider the magazine, Volume two Issue 1

✅ Develop talent

✅ Scale efficiently

✅ Streamline store operations

“There is a clear correlation between Progress Retail and the positive impact on our store sales and operational metrics.”

Justin Asgarpour Chief Vision Officer

UPFRONT // PUBLISHER’S DESK

Retail Insider the magazine launches volume two of incredible industry content

It’s with an immense amount of pride and excitement that I present to our readers the first installment of the second volume of Retail Insider the magazine content as we continue our commitment to provide the Canadian retail community with the very best news, coverage and insights related to the industry.

Within this issue, we have the privilege of publishing contributions from some of the brightest minds and experts within their fields of discipline in an effort to tackle some of the biggest challenges impacting retailers today.

Gary Newbury, supply chain aficionado, walks readers through trends and disruptions that have been faced by retail supply chains around the world since the onset of the COVID-19 global pandemic, while also addressing the fact that a redesign is required in order to effectively manage inventory and deliver the experiences that their customers are demanding.

Industry expert George Minakakis, explores the wonders of artificial intelligence and the incredible potential posed by AI chatbots to improve retailer interactions with customers through personalized recommendations, powerful browsing tools, targeted marketing messages, and exceptional customer service.

And, data privacy thought-leader, Ritchie Po, takes a look at the collection of customer personal data while highlighting retailer obligations concerning data collection and identifying the

things brands can do to avoid or address the overcollection of data.

In addition, with the help of some industry players and observers, we assess the current state of the Canadian shopping centre and attempt to identify the direction in which it’s heading.

Toronto’s soon-to-be-opening massive mixed-use development, The Well, is also featured with a focus on the ways in which it may well enhance Toronto’s global reputation when it comes to world-class innovation and development.

And, we also help celebrate 100 years of success for a Canadian retail icon, profiling Canadian Tire and its relentless pursuit to continuously improve and enhance the products, offering and experience that it provides its customers.

We hope that you enjoy Volume two Issue one of Retail Insider the magazine and look forward to receiving your feedback concerning the stories and topics that you want to see explored within future issues.

Sincerely,

Craig Patterson Publisher craig@retail-insider.com

10 // Retail Development The Well: Redefining live, work, play

Construction of the massive development in Toronto is nearing completion and set to serve as a major node of traffic and activity within the city, redefining the very idea of ‘live, work, play’ and helping to set a new standard for future mixed-use developments.

16 // Supply Chain Supply chain challenges during and beyond the pandemic

A redesign of the retail supply chain is becoming increasingly critical for the retailers throughout the industry to consider in order to effectively manage inventory and deliver the experiences customers are demanding.

22 // Retail Technology The power and impact of the AI retail revolution

As retailers continue to adopt AI technologies, their potential uses are opening up an entirely new world of opportunities to improve their operations and satisfy customers .

26 // Brand Profile Canadian Tire: Innovating toward another 100 years of customer loyalty

The storied Canadian brand is beginning its second century of business with a focuss on enhancing its offering and value proposition to continue meeting the needs of an evolving Canadian consumer.

32 // Data Privacy Understanding retailer obligations concerning data collection

With the advancement of digital technologies come immense opportunities for retailers to get closer to their customers through the collection of their personal data. But, how much data is too much?

Craig

ASSOCIATE

Dustin Fuhs

EDITOR-IN-CHIEF

Sean Tarry

GRAPHIC DESIGN

GBC Design

CONTRIBUTORS

George Minakakis, Gary Newbury, Ritchie Po, Corinne Pohlmann

HEAD OF SALES AND SPONSORSHIP

Darryl Julott

darryl@retail-insider.com EDITORIAL

100 Bloor Street West, Toronto, ON, M5S 3L3

Satisfying the omnichannel consumer

Recent research from enterprise mobile solutions provider, SOTI, reveals the top factors that need to be addressed by retailers before consumers will make purchases, either in-store or online.

58% Item price 34% Item availability

28% Timely delivery

Alleviating supply chain friction

Supply chain challenges faced by retailers have been abound over the course of the past few years. And, according to PwC’s Canadian Consumer Insights March 2023 Pulse Survey, the more friction that’s caused by these disruptions, the greater the odds that consumers will seek alternatives.

34% More than a third of Canadian consumers respond to supply chain disruptions by shopping at multiple retailers

32% Just under a third purchase store brands as substitutes

28% More than a quarter leverage comparison sites to find the best alternative

27% Delivery charges

The importance of bricks-and-mortar

A recent accelerated digitization of the world around us has altered consumer behaviour and retailer operations. However, CBRE’s recently released 2023 Canada Real Estate Market Outlook reveals the sustained importance of the physical store as Canadian consumers still prefer to shop in-person across all categories.

In-store preference by category: Essential Items (86.7%), DIY (81.3%), Luxury/Jewelry (75.3%), Houseware (74.5%), Clothing and Footwear (69.1%), Children’s Clothing and Footwear (68.2%), Cosmetics (68.1%), Electronics (52.4%), Specialists/Hobby (52%), Gifts (50.4%)

Physical function and utility

The purpose of the physical retail store has changed slightly over the course of the past couple of years. Colliers Retail Report Q1 2023 reveals the ways in which retailers are utilizing their physical spaces today.

Communicating with customers

Engaging with consumers is the primary tenet of any retail business. And, understanding where to engage them is becoming increasingly critical to do so effectively. Square’s Future of Retail report highlights the channels through which today’s consumer prefers to be reached.

Canada’s most respected

Maru Public Opinion recently released results of a survey that identifies Canada’s Most Respected General Merchandise Retail Stores for 2023. Brands were ranked based on a tabulated ‘respect score’ with an average score of 65.3.

Relieving the burden of credit card merchant fees for small businesses

Some small business owners will benefit from a reduction in credit card processing fees proposed by government

// By Corinne Pohlmann, Vice-President of National Affairs and Partnerships, Canadian Federation of Independent Business

Canadian merchants pay some of the highest credit card merchant fees in the world, and the 2023 federal spring budget took a step in the right direction to alleviate some of their cost pressures.

A deal to lower fees

The federal government has made a deal with Visa and Mastercard to lower credit card fees by up to 27% for some small businesses that process these cards. The budget was light on details and it’s unclear yet how many small businesses will benefit from this plan.

With the pandemic-driven boom in e-commerce, the usage of credit cards has rapidly increased in the past few years. More recently, with household budgets being under pressure because of inflation, more consumers are paying with a credit card just to have more time to pay the bill or collect reward points.

Merchants absorbing costs

While consumers love their credit card reward points, processing fees for merchants add up quickly. Every time a customer uses a credit card,

small merchants pay on average between 1.5% to 2.5% of the sale in processing fees. That forces merchants to absorb high processing fees or pass the costs on to customers.

Small business concerns

CFIB recently surveyed its members, and 74% said they want to see credit card processing fees drop to no more than 1% of the total dollar sale. That would require the interchange rates to be set at 0.7% or less – half of the current average of 1.4%.

Like consumers, business owners are dealing with high costs on every line of their budget. A majority (81%) of small firms say they take a hit to their bottom line to cover the costs of accepting credit cards.

Growing the business

Yet, many small merchants feel they have no choice but to continue accepting credit cards to retain their customers and grow their business.

For small firms, credit card fees associated with in-store sales (49%) and online/ecommerce sales (39%) have increased over the last three years, according to CFIB’s research. This may have more to do with the fact that merchants are processing a larger volume of their sales through credit cards or ecommerce than because of any fee or rate hike during that time.

Fairness and opportunity

Nearly 80% of business owners say that the current credit card processing fees they pay are not sustainable. Small Canadian merchants deserve fairness when it comes to accepting credit cards. CFIB was pleased when Ottawa committed to working with the payments industry to further reduce credit card fees in its Fall Economic Statement. We were also pleased to see the government follow up with action in the recent budget and commit to encouraging reductions to other cards, such as American Express.

Running their business

By lowering credit card processing fees and ensuring that any changes made are simple to understand, the payments industry and the Canadian Federal Government can let business owners focus on what they do best: running their business.

If you’re a business owner and agree with what we’re trying to do, you can add your voice to CFIB’s petition to lower credit card fees at cfib.ca/ CC-petition.

Corinne Pohlmann is the Senior Vice-President of National Affairs and Partnerships at CFIB, Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region, 22,000 of whom are operating in retail.

Image courtesy of photobyphotoboy

The Well: Redefining live, work, play

>> By Sean Tarry

It’s grand in its scale, ambitious in its scope, and could perhaps even be considered to be majestically beautiful from an architectural design perspective. But, whatever one’s impression of The Well – the massive mixed-use development that’s coming to fruition in the heart of downtown Toronto – the project is like nothing the city has ever seen before. In fact, according to John Ballantyne, Chief Operating Officer for RioCan, the development is much more than that offered by many of its counterparts sprouting across the country, and could soon be viewed by visitors and industry onlookers alike as the standard by which similar communities are designed in the future, redefining the very idea of live, work, play.

“The Well is the most ambitious mixed-use endeavour in Canada,” he asserts. “It is a bold reflection of Toronto’s energy and diversity, and an extension of the urban vibrancy of King West. It’s a choreographed mix of urban experiences, dynamic architecture and interconnected public spaces. Thoughtful and purposeful design underpins everything it achieves. With a pedestrian-centered focus, The Well responds to some of the strongest desires of downtown Toronto today:

Images courtesy of RioCan REIT

walkability, community-building, and the ability to create connections while seamlessly blending old and new. There is no doubt that The Well is a marquee project for Toronto that will be an iconic landmark and destination in the city for years and decades to come.”

Centre of activity

The mammoth development, which is being constructed on an impressive eight acres of land, is the result of a collaborative effort between Allied, RioCan and CBRE. Bordered by Spadina, Front and Wellington, and located at the centre of one of the city’s most compelling and animated areas, The Well is conveniently nearby Toronto’s Queen West, King West and the city’s Entertainment, Financial and Waterfront Districts, and should serve as a node of frenetic activity.

Already an area of the city that sees more than 7,100 pedestrians, 22,000 vehicles and 55,000 commuters pass through each day, it’s sure to generate even more traffic as soon as the project is complete. Consisting of seven towers that will accommodate 350,000 square feet of commercial retail offering, 1.2 million square feet of office capacity for an estimated 8,000 active workers, and 1.5 million square feet of residential space that includes 1,700 on-site condominiums and apartment units housing approximately 3,000 residents, The Well, says Ballantyne, is leading the way when it comes to developments of this magnitude.

“The Well is projected to contribute just under $1 billion annually of economic activity,” he says. “It will provide space for 1,300 new retail jobs. And, beneath The Well is a unique 7.6 million litre tank of water that will enable ENWAVE’s district energy system to be able to expand its service area west of Spadina. This tank can supply low-carbon heating and cooling to an additional 17 million square feet of space. All of The Well’s commercial and residential buildings are connected to ENWAVE’s district energy system for both heating and cooling. This, combined with the addition of transit, green spaces and new opportunities for eating, shopping, working, playing and living, The Well will elevate the neighbourhood and city exponentially. It’s one of the most transformational projects Toronto has ever seen. The complexity and scale of it will reinforce and enhance the Downtown West area of the city and will set a new standard for the future of mixeduse projects, elevating Toronto’s reputation on the world stage.”

Strong retail presence

In addition, The Well also features a world-class, 70,000 square-foot public food market offering an eclectic array of food and beverage options for residents and visitors to choose from, including La Cubana, Hooky’s, Ren Sushi, a new to market Korean-focused concept, Chun Yang Tea, Lob-

“It’s one of the most transformational projects Toronto has ever seen. The complexity and scale of it will reinforce and enhance the Downtown West area of the city and will set a new standard for the future of mixeduse projects, elevating Toronto’s reputation on the world stage.”

- John Ballantyne, RioCan

ster Burger Bar, Rosie’s Burgers, Isabella’s Mochi Donuts and Sweetie Pie, among others. It’s an offering that provides a critical component to the overall retail presence on the site which is nearing closer every day to being completely leased. Some of the brands that have already announced their involvement include Sweat and Tonic, Oliver & Bonacini, Shoppers Drug Mart, BMO, Scotiabank, Quantum Coffee, Tokyo Smoke, Bailey Nelson, Bone & Biscuit, dentalcorp, Fix Coffee + Bikes, Prince Street Pizza, Arcadia Earth, Lumea Laser Clinic, Maverick, The Village Collective and Vie by Lê, with more names to follow over the course of the next few months and beyond as the community continues to take shape.

It’s an impressive list of brands that have been secured and will help see out the promise of The Well as a unique mix of shops, restaurants, fresh food markets, workspaces and residences that set the stage for innovative collaborations and meaningful experiences in culture, entertainment, community and wellness. And, it’s one that was thoughtfully and deliberately assembled in large part due to the advisory services of Alex Edmin-

son, Senior Vice President at CBRE, who seems to understand in full the gravity and importance of the project that’s been years in the making.

“Working on a project of this size and stature – one that will transform the area in which it’s being built – is the opportunity of a lifetime,” he says. “When I zoom out from the day-to-day to look at what’s being created – it’s extraordinary. I hope that this isn’t the last time that something this magnificent is built. But, suffice it to say, this build is not a regular occurrence. It’s raising the standard for mixed-use projects, and not just for the city of Toronto or for Canada, but for the entire world.”

Commitment and focus

Edminson is sure to emphasize the contributions that have been made by so many different individuals involved in the project, suggesting that it would be impossible to pull off a feat of this magnitude without the efforts of a large team of experts. However, from the perspective of helping to build the retail layer of this incredible

The Well’s world-class food market

mixed-use community, Edminson and his CBRE partner, Arlin Markowitz, have been pulling most of the levers, directing the flow and evolution of the projects commercial leasing component. It’s an element of the job that requires a special kind of skillset and a keen understanding of the needs and preferences of the community and surrounding area. And, to do it right, suggests Edminson, it’s an element that demands an unwavering focus.

“To be involved in an undertaking like this requires a great deal of commitment and a dedication to do the job and the entire community justice,” he asserts. “You have to be committed to properly merchandising, optimizing the offering through an inclusive mix of tenants that provide day-to-day services, discretionary and traditional retail offerings that are a balance of local and national brands. In addition, you’ve got to be extremely careful in ensuring that the mix that’s as-

“You have to be committed to properly merchandising, optimizing the offering through an inclusive mix of tenants that provide day-to-day services, discretionary and traditional retail offerings that are a balance of local and national brands.”

- Alex Edminson, CBRE

Construction of The Well in full swing

sembled is unique and complementary, creating a retail synergy that not only makes sense, but one that remains true to the overall vision and goal of what we’re all trying to create. It’s been an amazing project to work on. And, I’m really excited to finally see all of our hard work come to life in full, and to continue developing and evolving the retail offering that’s such a critical piece of The Well.”

Transformative mixed-use

RioCan’s Ballantyne echoes Edminson’s sentiments concerning the excitement surrounding the project. And, although he’s not at liberty yet to share details, he assures that there will be lots of exciting news released concerning The Well within the coming months. In the meantime, he says that he’s enjoying watching all of the pieces come together to form what he considers a revolutionary milestone for mixed-use developments.

“It’s been rewarding to see so much excitement around The Well. Our office tenants have started to occupy the iconic office tower at 8 Spadina. The residential community has started occupying the first of six residential towers. Our retailers will begin to take occupancy soon, with rolling openings and increased animation of our community throughout 2023. We are excited for a celebration in the fourth quarter of 2023 highlighting The Well’s vibrant amenities, retailers, businesses, office tenants, and residences that make The Well a world-class property. And, we look forward to welcoming many new visitors, residents, retailers, and office tenants to The Well in the upcoming months. The offering will be enhanced by dynamic, community-based programming that will draw people to The Well year-round for unique experiences, making it one of Toronto’s most vibrant destinations – a hub for culture, dining, shopping, working and living. With world-class architecture and design, this community will become a landmark for the city and a model of what a mixed-use community can be.”

Supply challenges during beyond pandemic

A redesign of the retail increasingly critical in inventory and deliver the demanding

Supply chain challenges during and beyond the pandemic

By Gary Newbury

As the Pandemic broke during March 2020, retailers faced the arrival of a glut of stock into, at times, dormant estate arising from lockdowns. This required swift action to cancel merchandise orders. During the first year of disruptions, most retailers found themselves focusing on triaging demand and supply while grabbing whatever inbound trucking and delivery capacity they could find to keep the integrity of their operations and their top line intact.

Further disruptive events occurred in 2021 along with a sizeable 25 per cent lift in physical volume leading to rollovers, port congestion and capacity (and staff) shortages along the inbound pipeline.

Complexities surfaced through lack of supply chain visibility. There were stockouts at factories, and retailers were not as aware of interdependencies in complex supply networks supporting their strategic suppliers thousands of kilometers away.

Many transport networks suffered asynchronous discontinuity. Basically, things fell apart quickly. Getting hold of inventory was often reduced to a very stressful firefight with shipping lines, trucking companies, ports, factories, and third-party warehouses, with very little surety as to the exact

retail supply chain is becoming order to effectively manage the experiences customers are

Image courtesy of Avigator Photographer

status of orders at any one time. Demand was unusually high and inventory short. Where inventory was available, you could win new customers. If it wasn’t, you lost loyal ones.

This supply chain tangle set in motion inflationary pressures, fanned by high government spending in policy areas such as furlough and direct subsidies to individuals and businesses.

Container charges rose ten-fold over a handful of months, adversely impacting budgets and posing real challenges related to accurate on shelf pricing. Much of this cost was “absorbed” in the short term by retailers until they were left with no choice but to pass it on to consumers.

Overstocks – the key cause

As 2022 opened, the balance swung quickly to an inventory glut for many retailers as their concerted efforts at stabilising their supply chains had accelerated product flow. However, consumers had moved on, and the temporal length of supply pipelines, now full, acted like a firehose of inventory. As a result, there was a tightening of available storage space.

Walmart US and Target declared their excess inventory position in Q1 and went to work on

clearing their overstocks. This situation was not isolated to these two apex retailers. This demon strated, graphically, functional silos frustrating the smooth flow of information between market ing insights, demand planning and supply chain execution, and importantly, the shortfalls in genuine internal collaboration.

Throughout the past three years, restrictions and disruptions posed a clear challenge to the orga nizational culture within most retail business es. Each functional area learned how to adapt quickly and mobilize staff to what department heads perceived as important. This often did not reflect in full alignment across the retail business. For most retailers, it was all hands to the pumps and little time was spent on resetting cultural norms and values, amplified by work-from-home practices.

As consumers flocked back to stores during Q4 2021 and early 2022, retailers found, once again, that they were in a mad scramble to rebalance demand and their oft-disjointed forecasting and inventory position.

War broke out in February and the world discovered complex supply chains originating or going via Ukraine. Energy reliance within the EU on Russia became abundantly clear, spiking further inflationary pressures.

Further disruption and chaos still ahead

It is important to look at 2023 and 2024 together, as economic forecasts suggest another two years of supply chain adjustment lay ahead until rebalancing occurs during 2025.

The three short range challenges are:

Reduction in discretionary spending: Retailers need to rediscover ways by which they can differentiate themselves from their adjacencies. There is very little that can only be bought from one brand (private label excepted). Experience and convenience are key in this equation. The

It is important to look at 2023 and 2024 together, as economic forecasts suggest another two years of supply chain adjustment lay ahead until rebalancing occurs during 2025.

effectiveness of online services will need to be overhauled, with technology inserted, and a required repricing for online assortments and a much lower cost profile in order to ensure that ecommerce is profitable – this remains an area of potentially significant growth.

Significant visibility gaps: The pandemic exposed disjointed approaches between inventory, sales forecasts and capacity planning. A thoughtful approach to deploying mature technologies is key in better controlling the progress of merchandising orders through the system, and for creating forecasts that help with optimizing throughput. AI may help make better, faster decisions. However, if your processes are faulty, it might just reveal how bad they are, rather quickly.

Talent retention challenges: One of the vital factors in successful supply chain and logistics operations is the ability to retain talented oper-

atives. Considerable focus must continue to be placed on the employee experience and discovering points of friction in the workplace. At one level this could mean compensation. But more often than not, dissatisfaction is rooted in how engaged operatives feel in their workload. The opportunity to really see a connection between “that last task I completed” and the overall goals of the retailer is missing.

Further, communicating key values concerning the way in which people will be treated, in addition to demonstrating these values in action, will go a long way towards improving engagement with employees, achieving superior performance and making the retailer a preferred destination.

The vagaries of “Just in Time” retail supply chains

The retail industry can be seen operating across three major sectors – general merchandise, food/

Image courtesy of LeeYiu

Tung

healthcare and automotive. For many years, retailers outside the automotive supply chains have played second fiddle to the impressive lean achievements found in places like Toyota, GM and Ford.

The “Just in Time” (JIT) retail supply chains are a classic example of misthinking how to efficiently respond to consumer demand. They have been accidentally constructed through poorly aligned merchandising processes and supply chains planned out over one, two, or even three seasons. Commitment to such timelines do not respond well when consumers’ tastes change fast.

The reason? These JIT supply chains are built on a fundamentally flawed “push at consumers” strategy, rather than a demand-pull approach and have inherent inefficiencies. These manifest in large markdowns, clearance and landfill.

There’s a couple of blindingly obvious factors in the demise of our supply chain designs that have manifested over the last three years:

Lack of risk management: The way retailers have managed supply chains is to focus on individual element cost optimization, independent of the risks involved at (and prior to) the origin and

transportation distances – what could go wrong here that is likely to affect product availability?

Lack of formal collaboration: The current part nership paradigm is “I win when you lose”. This negotiation strategy has guided the interface be tween retailers and suppliers. There remains lim ited motivation to pool energy to bring product to market quickly and respond, very efficiently, to consumer demand variation. To drive trends, a retailer must demonstrate the ability to coordi nate and collaborate to increase speed to market and executional excellence.

Can technology separate winners from losers?

Retailers need cogent strategies derived from a distinct and compelling vision for 2025/26. This roadmap will include the introduction of technology enablers (ideally mature technolo gies). However, prior to such adoption, strategy should guide the business concerning the ways the triad of people, process and technology is to be addressed. Too often long standing internal business challenges are addressed with technol ogy, rather than a review of culture, leadership, organizational structure, metrics and incentives.

The road ahead

For some working outside the supply chain function, the focus may have switched back to improving and optimizing more traditional areas, such as stores and merchandising. Unfortunately, the supply chain remains a major challenge. As volumes pick up again, unaddressed challenges will surface which abated as volumes trended down due to China’s Zero Covid lockdowns during the latter stages of 2022.

The time now is to take some bold moves in redesigning retail supply chains for real agili ty, based on optionality, collaboration and the notion that effective supply chain execution is a competitive tool in modern day retailing, sup porting stores and delivering ecommerce experi ences to consumers’ porches across Canada.

Retailers need cogent strategies derived from a distinct and compelling vision for 2025/26. This roadmap will include the introduction of technology enablers (ideally mature technologies).

The power and impact of the AI retail revolution

As retailers continue to adopt AI technologies, their potential uses are opening up an entirely new world of opportunities to improve their operations and satisfy customers //

By George Minakakis

Intoday’s highly competitive retail market, those looking to enhance their position must embrace the power of artificial intelligence (AI) in connecting and engaging with consumers. AI will revolutionize how retailers interact with customers through personalized recommendations, powerful browsing tools, targeted marketing messages, and exceptional customer service. Most people are familiar with ChatGPT, an AI chatbot with over 100 million subscribers, and its potential extends well beyond simple tasks like writing poems or essays for students. Ignoring this means losing out on a significant opportunity to stand out in a crowded marketplace.

Google, which has always been perceived to lead in AI development, was scrambling to kick off their version of ChatGPT, called Bard.Ai. Microsoft has just invested $6.0 Billion into further developing this product and its planned launch on Bing - Microsoft’s search engine. What’s all the hype? It’s the potential for consumers to use these and other AI Chatbots to conduct searches, far beyond what chatbots can do today. The implications are significant when it comes to engaging consumers.

Image courtesy of your_photo

Chatbots aren’t new. However, this AI application is very different and offers something that can change how we compete, and challenge retailers once more, as ecommerce and Amazon has done. It will not only become a powerful browsing and direct shopping tool on a search engine for consumers. It also has the potential to turn search engines into marketplaces as well. Of course, if that were to happen, Amazon, Apple, Meta, Shopify, and others would be looking at how they can get their share of the search engine pie. What’s at stake here is that 1 per cent of search engine traffic, according to Microsoft, is worth close to $2 Billion in advertising.

How does this impact retailers?

First, when consumers start collecting the information that they need to buy the right product, browsing on a search engine takes time. And, comparison shopping is even more time-consuming. Search engines are okay for simple que-

ries, but when a consumer needs to define their search explicitly, the service today is inadequate. We roam search engines like hunter-gatherers of the 1990s sifted through the yellow pages.

The technology companies that brought creative destruction two decades ago missed the opportunity to create greater consumer convenience regarding online searches. Marketplaces and search engines have been too busy collecting visitor data and selling advertising. Even Alexa and Siri are limited. The revenue and profits of these organizations have been primarily driven by consumers conducting searches. This next revolution needs to be aggressively pursued and continuously improved.

With all this, OpenAi with ChatGPT comes along, and it has far more capabilities than just listing a group of options on a webpage. As we launch new Chatbots, a consumer can get very detailed in their search, and as long as the data the AI unit is working from is accurate, the customer experience improves substantially. With technology engaging consumers directly, it will be revolutionary. This also has the potential for the emergence of new business models.

Imagine a busy family that needs to replace their built-in oven. With little time in their day, they turn to their computer and conduct a quick search with the help of a chatbot. They ask this AI platform to list all the preferred brands of built-in ovens within a specific price range, their desired features, customer ratings, warranties, retailers who sell them, availability, and fastest delivery. In seconds a search is completed. They have an analysis to go through quickly. This would have taken an hour or more instead, and it’s delivered on screen in seconds in an easy-toreview table. And if they are ready, they can place the order online immediately.

Such a capability, combined with the vast amount of product data that search engines and vested retailers provide access to, could allow consumers to quickly compare products, ask questions,

Retail customers expect quick and seamless shopping experiences in today’s consumer landscape. If a retailer’s online platform is slow, awkward, or lacks the ability to provide realtime assistance, they risk losing potential customers to more technologically engaging competitors.

and place orders through the chatbot interface. It’s not farfetched, I had ChatGPT conduct this hypothetical search for the same appliance, and it delivered it in a table format. This will address many customer frustrations, from the time it takes to decide on the right product to choosing the right retailer, ordering it and having it delivered for installation.

Expediting browsing

The convenience of consumers shopping faster should not be dismissed by any retailer. A customer experience is about a higher service level that is consistent and convenient. A search like this can prompt consumers to stores to see and order, or they may just do it online. That sale will depend on how compelling a retailer can be. However, there is a warning here. Simply thinking that this is a traffic generator would be an error. It is a tool to expedite browsing and make shopping choices faster. Retailers need to be more engaged in this.

When it comes to attractive technology, things will change faster, and retailers will need to elevate their online capabilities in every aspect. A retailer’s website and its capabilities must be equally robust in communicating. Their visibility on a search engine will require far more effort and management to be recognized by an AI personal assistant. That needs effective advertising development and spending on the proper channels.

Risks and Opportunities

Unleashing large language model chatbots on search engines could negatively impact retailers not as sophisticated in their technology capabilities. Retail customers expect quick and seamless shopping experiences in today’s consumer landscape. If a retailer’s online platform is slow, awkward, or lacks the ability to provide real-time assistance for the user, they risk losing potential customers to more technologically engaging competitors.

During the pandemic, everyone rushed to be online with a website. It was never enough and will be less of an advantage shortly. And there is a strong likelihood that as human dependence and trust grow with AI, ecommerce will continue to grow faster. A retailer must be visible, which means fighting through all the noise. This time to get the attention of an AI chatbot designed to assist customers with their specific product search by providing recommendations, answering questions, and guiding them through the purchasing process.

Refocussing retail tactics

The competitive landscape will be more technologically intense when it comes to customer engagement. In light of this, retailers will have to refocus their tactics. That means defining chatbot-specific SEO strategies by identifying concise answers to common customer questions about their brand or product, resulting in a widening gap that’s pushing many retailers to join marketplaces that offer robust AI, SEO, and marketing services.

Major retailers with AI chatbots that can understand natural language entries will assist their customers in expediting their purchases. This level of engagement will create consumer expectations for all retailers to follow.

Retailing has always been challenging; we need to be prepared to level the AI playing field, regardless of the interface humans choose to browse and shop with, even though it’s early days and imperfect. It will be as powerful and influential a tool as the iPhone was when first introduced 16 years ago, decoupling us from our homes and computers and continuously improving our experience and convenience.

George Minakakis is CEO of Inception Retail Group Inc. and author of The New Bricks & Mortar - Future Proofing Retail.

Canadian Tire: innovating toward another 100 years of customer loyalty

The storied Canadian brand is focussing on enhancing its offering and value proposition to continue meeting the needs of an evolving Canadian consumer //

By Sean Tarry

Whenit comes to truly iconic Canadian brands – retailers that represent and stand for the values of those living in provinces and territories across the country – few come to mind quicker than that of Canadian Tire. The highly acclaimed, oft-celebrated homegrown organization has prided itself for 100 years on its commitment to helping improve the lives of Canadians through its innovative products and services, by continuously investing in neighbourhoods and communities from coast-to-coast-to-coast, and with an honest approach to business that has long engendered trust and admiration from its loyal legion of customers. Today, as it enters its second century of business, amid an accelerated digitization of the world around us and shifting consumer behaviour, the revered brand is further sharpening its focus on the experience and value it offers. And, as Jason Blanchette, SVP of Loyalty and Customer Insights, Canadian Tire Corporation, points out, it’s a focus that’s being driven by the needs of the Canadian consumer.

“The last three years have seen many challenges and uncertainty for Canadians,” he says. “And, this year is no different. Canadians are spending more purposefully and looking to stretch their dollars. Because of this, we’ve been focused on ensuring that when consumers are making the important choice of when and how to engage with a retailer, that we’re offering a compelling and meaningful value proposition to achieve customer satisfaction and long-term loyalty.”

Rewards and incentives

One of the ways in which the brand has set out to execute on its vision is by enhancing its popular Triangle Rewards program. Launched in 2018, the program provides Canadians with a broader range of choices to earn and redeem their Canadian Tire money, and the company with greater opportunities to engage with customers. Since its introduction, Blanchette explains that an extraordinary amount of effort has gone into optimizing the program and the Triangle app, which now provides members with the ability

to view personalized offers for Canadian Tire’s group of companies – which include Canadian Tire, SportChek, Mark, Party City, Atmosphere, Sports Experts, Pro Hockey Life, Trio Hockey, PartSource, CT REIT, and Canadian Tire Gas+in one central location. In addition, the app now allows members of the program to manage their loyalty accounts and credit cards from anywhere, enabling them to track credit card and loyalty transactions, view and activate offers, and even swap offers between banners. The robust nature of the program’s offering is not lost on Blanchette, who also recognizes the incredible amount of research and planning that was involved ahead of rolling out these improvements.

“With Triangle Select, we used a series of customer studies through 2020 to conceptualize and refine this program,” he explains. “In 2021, we built the program. And in August, we began a year-long beta test to a subset of our customer. As we monitored the results through 2022, we made the decision to launch nationally once all key metrics had been achieved. We then spent the back half of 2022 building the program in our

“The Triangle Select program offers Canadians a new way to stretch their dollars and earn even more rewards on their everyday purchases. It’s another way we’re delivering on our brand purpose.”

- Jason Blanchette, Canadian Tire

new digital platform before finally launching in January 2023.”

Enhanced offering

Blanchette goes on to explain that Triangle Select is an enrichment to Canadian Tire’s existing Triangle Rewards Loyalty program - a subscription-fee based program which was designed and developed by the company to enhance the value proposition that it offers its customers, allowing them to earn Canadian Tire Money even faster on everyday purchases across its group of companies. In addition, bonus, stackable rewards can be earned on all eligible purchases in-store at Canadian Tire, Mark’s, SportChek, Sport Experts, Party City, L’Équipeur and more, including 10x in-store bonus, 20x in-store brand boost, and 20x annual top up.

“The Triangle Select program offers Canadians a new way to stretch their dollars and earn even more rewards on their everyday purchases,” he explains. “It’s another way we’re delivering on our Brand Purpose: We Are Here to Make Life in Canada Better. In our beta test of Triangle Select, the average member’s annual incremental earnings through select-specific bonuses were more than three times the subscription fee – demonstrating the incredible value this program will bring to our customers this year and beyond. And, because we know that Canadians love streaming, we worked with Bell to develop a partnership for beta to see if retail and con-

The history of Canadian Tire Money

1958 Conceived by Muriel Billes, wife of Canadian Tire’s Co-Founder, A.J. Billes, Canadian Tire Money is introduced at Canadian Tire gas bars, pioneering the loyalty program concept.

1961 Sandy McTire, the character designed by employee Bernie Freeman, is introduced. The use of Canadian Tire Money was expanded beyond gas bars to purchases at Canadian Tire stores. Canadian Tire Money is first printed on genuine bank-note paper by the British American Bank Note Company.

2000 Canadian Tire ‘Money’ On The Card upgrades the loyalty program once again. Canadian Tire Options MasterCard 2000 customers can earn Canadian Tire Money electronically.

2010 Canadian Tire Money launches a special series of three coins manufactured by the Royal Canadian Mint. The 2010 coins showcased Canadian family winter moments.

2014 My Canadian Tire Money, a digital national loyalty program allowing customers to earn e-Canadian Tire Money, is launched.

2018 Triangle is introduced, allowing customers to collect and redeem at Canadian Tire, SportChek and participating Mark’s/ L’Équipeur and Atmosphere locations.

tent together could be a powerful offering. Beta confirmed that customers valued this feature and we worked to include it in our launch plans and continue to offer this extra value to our members. Currently, for a limited time, Triangle Select members will receive a special offer from Crave for a six-month Crave subscription upon signup.”

Meeting evolving customer needs

The Triangle Select program, which has been a tremendous success for the company to date, not only provides its members with a range of incentives, offers and rewards, it also serves as an anchor of sorts, to which the entire Canadian Tire customer experience is rooted. It’s a conduit of interaction and engagement. And, as Blanchette explains, it goes a long way toward bridging any gaps that may have previously existed within the brands omnichannel experience, integrating the entire ecosystem of banners, offering and available channels to meet and exceed the evolving needs and behaviour of today’s Canadian consumer.

For the millions of Canadians who already earn meaningful amounts of Canadian Tire Money, through new additions like Triangle Select, we’re working to create even stronger bonds with even more Canadians to deliver one of the most rewarding shopping experiences in Canada.”

- Jason Blanchette, Canadian Tire

“The majority of consumers start their shopping journey online, which brings to light the importance of building a seamless omnichannel experience across web, our app and in store,” he says. “We are continually testing out new offerings to meet the different ways our customers want to shop, including services like locker pick up and express delivery to name a few. During the pandemic, we saw heightened engagement with our 1:1 offers and growing engagement with our Triangle program as customers shopped more across our banners and had a keen focus on getting the most value for their dollar. As we move ahead, we’re focused on telling the Triangle Rewards story, including how Select works to elevate our base loyalty and credit card products. In our beta test for Triangle Select, almost 70 per cent of members had one of our credit cards, so we know it’s a compelling message to demonstrate how the programs work together to deliver the best value. We also saw that the program drives significantly more spend and cross-shopping at our different stores - members that cross shop spend an average of three times more than those who shop at only one of our stores.”

An integrated vision

Blanchette explains further that particular focus was paid to the company’s bricks-and-mortar stores, given how critical they are to Canadian Tire’s corporate and customer strategies, designing the Triangle Select product to support the growth and continued success of its physical locations through the in-store only Canadian Tire Money bonuses. However, he also acknowledges the omnichannel nature of today’s consumer who traverses channels during their shopping journey and expects the retailers they shop with to help make it seamless and rewarding to do so. To address this, the company introduced ecommerce benefits within the Select program, including shipping fee re-imbursement and lower free shipping thresholds. In fact, he says that heightened emphasis is being paid by the company to create a cross-channel experience that’s seamless, engaging and rewarding.

“To meet our customers ever-changing needs, we’re focused on improving the connection of digital and physical channels and driving an enhanced customer experience,” he asserts. “We’ve recently launched our Better Connected strategy – a plan to evolve from a group of banners, brands and channels to one integrated Company. By using our brand purpose of Making Life in Canada Better as our north star, this strategic direction towards a single, connected platform will help modernize and create a more contemporary experience for our customers for an improved omnichannel customer journey.”

Continued innovation

More than a century of successful business operations is quite a remarkable feat – one that can’t be claimed by many. What’s perhaps more impressive, however, is the insatiable desire inherent within the Canadian Tire brand to continuously enhance and improve the products and services that it provides for its customers all over the country, and the innovative approach it takes to just about every project it undergoes. It’s a testament to its storied history and tenure within the Canadian retail market and the foundation on which its reputation in the minds of consumers has been built. And, according to Blanchette, the brand has absolutely no intention of relenting any time soon.

“For 100 years, we’ve been a mainstay in communities across Canada where we are constantly evolving and adapting to meet the needs of our customer. Adding value for our customers has always been a priority and Triangle Select is another way we deliver on this purpose. We’re focused on telling the full Triangle Rewards story, and weaving this into our customers’ everyday shopping habits across our stores. For the millions of Canadians who already earn meaningful amounts of Canadian Tire Money, through new additions like Triangle Select, we’re working to create even stronger bonds with even more Canadians to deliver one of the most rewarding shopping experiences in Canada.”

Understanding retailer obligations concerning data collection

With the advancement of digital technologies come opportunities for retailers to get closer to their customers through the collection of their personal data. But, how much is too much? //

By Ritchie Po

Sharing is caring, right? With respect to the collection of personal information by retailers, it actually isn’t. As customers share more and more personal data in order to purchase goods and services, retailers must understand their obligations in ensuring they do not collect too much personal information, and that they know the limits on the disclosure of their customers’ personal data to third-party service providers and partners. Two recent controversies have shed

light on businesses that have collected too much personal data, or have shared personal data to third parties, neither of which was done without sufficient notification or consent.

Recently, Roomba ran afoul of privacy laws when it was found that their cameras were collecting images from beta testers of a new product on an ongoing basis and storing all of that data in the company’s servers. This led to the embarrassing

Image courtesy of Putilich

(and undignified) situation where customers were filmed through the Roomba while they were in the bathroom, arguably the most private space in the home. Similarly, a recent investigation from the Federal Privacy Commissioner for Canada found that Home Depot had not only collected their customers’ spending habits, but they were disclosing this personal data to Meta for marketing purposes in the “Offline Conversions” solution that measured the effectiveness of targeted advertising using live customer information. In that situation, consumers were not made aware that their spending habits at Home Depot would be disclosed to the social media giant, and the regulator ordered that the “Offline Conversions” tool no longer be used by Home Depot.

These two cases highlight what a customer should reasonably expect when they disclose personal data for commercial transactions. As a retailer, are you collecting only what you need to effect the purchase? Do you share that data with your partners? And, if so, are you de-identifying or anonymizing the data, or disclosing it in an identifiable format? If your service provider is bypassing you and collecting personal data from your customer directly, do they also disclose that data to you?

Ultimately, retailers are responsible for the personal information that they collect from their customers. They act as custodians once they collect that data, and this obligation is binding upon all parties in their supply chain. In this article, we highlight and examine common scenarios where businesses collect customer data and where they need to implement privacy by design into the organization.

Businesses may be collecting personal information from a number of different entities they work with on a daily basis. Even something seemingly innocuous, such as an official Instagram or Facebook page, would be a collection point if you intend to use the comments and interaction for marketing trend analysis and research purposes.

Collection: Know your chain of custody

As part of everyday business, personal data is sent out frequently. And, any time it’s sent to another entity within an outside organization, or even internally, is considered a disclosure of personal data. Under most privacy laws, if any part of a business’ operations is being outsourced to a third-party entity, and that company collects, processes, or stores personal data on its behalf, the outsourcing business is legally responsible as the head contractor and data custodian in the event of a breach. Therefore, businesses are often able to account for personal data throughout their supply chains, including the following:

Site host: What personal data is the ISP collecting? Do they have proper cookie notices with options for the customer to properly adjust their privacy settings, with opt-in functions?

...if any part of a business’ operations is being outsourced to a third-party entity, and that company collects, processes, or stores personal data on its behalf, the outsourcing business is legally responsible as the head contractor and data custodian in the event of a breach.

Merchant site: If selling merchandise through a third-party site host, consider how much information is received from them. Do they share sales reports and purchase histories? And, if that information is going to be used, considerations must be made as to whether or not consent has been given to do so, which means reviewing the terms and conditions or consent forms provided to customers. If in doubt, do not guess whether or not consent has been given. Implying consent is a slippery slope towards liability.

Payment processor: Even if a company doesn’t collect payment card information (or if just the last four digits are visible), it might receive sales reports or histories from customers. Even if the customer is known by the business, does it need to see unredacted sales reports with their credit card information? Businesses want to think before accepting those reports from the payment processing company, or they will not only bear the responsibility for it, but will also have to perform additional due diligence under PCI’s privacy requirements.

Customer service: If a call centre is run by a vendor – particularly in another country – consider that the collection of personal data may differ in that jurisdiction. Every piece of information about a customer is considered personal data, even down to the recording of the call “for quality assurance” purposes. Ensure the proper notifications and, if required by law, get consent before proceeding with the call. Businesses must also ensure that proper privacy training is given to call centre agents so they do not collect unnecessary data.

Marketing: Marketing departments (or outsourced marketing firms) need some form of personal data to gain insights into customers’ spending habits and preferences to help their businesses grow. However, they must ensure that they are also obtaining the proper consents from the target audience and being transparent with them about how the data is being used. The collection of personal data for marketing

purposes is often considered a secondary use of information, as its use is often not tied directly into the purposes for which it was originally obtained. Therefore, businesses must ensure that their marketing departments and any outsourced firms have the proper consents and notifications in place.

Collection points of customer personal information:

A business can collect personal data from any number of resources. Some common examples of these data collection points include the following:

Website visitors:

Prospective customers who visit your site to better understand your product.

Website purchase:

Customers buying directly from you. You may or may not be using a third-party payment processor, so you must understand whether or not you are collecting their personal data or it is in the custody of your vendor.

Product app

If a product runs on an app, such as a streaming service, then you need to understand what information that streaming service provider needs to run the product or service. Connectivity means that customers need to provide some technical information on themselves or their device to run the app.

Physical device

You will need the IP address and location of the device for connectivity, but you may not need every possible identifier (such as IMEI).

Partners and service providers

This may include customer sales data (from your payment service provider), social media interaction, external marketing data, or third-party merchants or resellers.

Improper Disclosure

A key point that may not be clear in either the Roomba or Home Depot controversies is not just the unauthorized collection or disclosure of personal data, but the overcollection of data, or the improper disclosure to other entities without prior consent or notification from the customers. A Roomba needs a camera to see where to pick up dirt, but it did not need to collect the images of persons in that vicinity. It is one thing to view the environment, but it is entirely another to capture and store that image with the vendor. This is how the embarrassing images of customers in the loo ended up being stored in Roomba’s servers.

Similarly, Home Depot did not advise their customers that they would be disclosing personal data to Meta, and neither their privacy policy, nor that of Meta’s, had any express language no-

tifying the customer of this transfer. The Home Depot privacy statement was not available at the time customers made their purchase, and there was no reason for customers to check the privacy statement for this at the time a purchase was made. Although the Canadian Federal Office of the Privacy Commissioner did not find that the data was sensitive, it emphasized that customers would not reasonably expect Home Depot to disclose their personal data to Meta, and that Home Depot should have obtained express optin consent for this practice. In effect, the regulator is saying that companies should not apply a broad or overly permissive interpretation of what personal data can or should be disclosed for purposes other than those which are necessary and absolutely required.

Overcollection or improper disclosure of personal data can lead to not only complaints and

Image courtesy of jamesteohart

investigations conducted by the regulator, but also public embarrassment when the findings are made public. There may be “no such thing as bad press”, but it will affect businesses if their stock price goes down or their investors become reluctant to continue doing business with them. Many investors these days are demanding proof of not only IT security compliance, but also evidence of a robust privacy program that complies with international laws. They often require that a complete review of a business’ data collection and sharing practices be undertaken as part of their due diligence. Businesses can no longer ignore making privacy a priority in their organization, especially if it hurts their bottom line.

Risk Management

In order to avoid overcollection or to ensure that customer personal data is safeguarded, businesses must have a mature privacy management program. This includes all of the following elements:

Proper notification and/or consent: Ensure customers are notified of their privacy rights in the policy and in the notice at the moment of collection. If personal data is going to be used for purposes other than the original purpose of its collection, to prevent scope creep, obtain express customer opt-in via a consent form. And, make sure documents are user-friendly and easy to read.

Data mapping and inventory: Take “stock” of all the types of personal data that’s being collected, maintain evidence of the notification and/or consent, record its location in systems (including country of storage), and keep high-level tracking of any disclosure of that data to third parties. Businesses may also be required to complete a record of activities (ROA) of personal data processing for EU privacy compliance.

Privacy by Design: Build privacy elements organically into systems and processes by setting the highest privacy levels and restricting access to the data. In addition, ensure that systems process

only the absolute minimum amount of personal information required. Do not process personal data or grant liberal access “just in case”. Businesses must ensure process data as a matter of pure necessity.

Privacy impact assessment: If building (as a flagship product or app) or implementing a system that involves considerable personal information, get a privacy officer, consultant, or legal counsel to write a privacy impact assessment (PIA). This will help assess on a granular level whether or not collection, use, disclosure, and retention of personal data complies with legislative permissions. A PIA has great value as a due diligence exercise, and can help assure executives, partners, clients, and investors that privacy practices are sound and risk-averse.

Responding to overcollection

If a business has found that it has over-collected personal data, or improperly disclosed personal data, it’s considered a privacy breach. When this happens, here are some steps that can be taken in order to effectively respond:

Notify the business’ privacy officer. They will act as the lead in the breach response protocol. Alternatively, businesses may contact their external privacy consultant or legal counsel to assist or take the lead.

Activate and execute privacy breach response protocol. This means a business should be ready to report the breach internally, triage, investigate, assess risks, notify affected stakeholders, and respond to queries. They should also meet with legal counsel to assess their exposure, and work with communications and media relations on brand messaging and damage control if the breach affects a large group.

Questions about data privacy? Contact Ritchie Po, Privacy Lead, Kobalt.io at ritchie.po@kobalt.

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The Canadian shopping centre: innovating to evolve amid flux and disruption

Properties across the country are redefining their purpose and function in order to adapt and thrive within an ever-shifting landscape //

By Sean Tarry

Theretail industry is not one that is unfamiliar with change. In fact, change happens daily, and seemingly, at times, in the blink of an eye. It’s evident in, and most commonly caused by, shifts in consumer behaviour, trends that take the market by storm, economic factors and influences, global disruptions, and advances in digital technology. However, it’s not often that all of these pressures simultaneously bear down on the industry as they have over the course of the past couple of years or so. It’s transformed the change that retailers are accustomed to into full-fledged upheaval in some parts, sending many scrambling in a number of different directions in efforts to pivot, rejig and reinvent their brands and offerings. It’s a confluence of disruptive forces that have led many within the industry to rightfully assess their standing within today’s helter-skelter environment. And, for shopping centres located in cities and communities across the country, says Paul Lessner, Senior Vice President, National Shopping Centre Leasing at JLL, it’s resulting in a need to redefine their purpose and utility.

Image courtesy of Quadreal Property Group

“There’s no question that the industry is currently going through a state of flux and change,” he recognizes. “During the pandemic, there was a lot of discussion around the mall and its ability to survive the turbulence. It’s the same conversation that had started years earlier with the advent of ecommerce. It was all about the death of bricks-and-mortar and the shopping centre. I was never in that camp of thinking. I believe that bricks-and-mortar and the shopping centre is here to stay. But there are clearly adjustments that need to be made. The disruption that’s occurred over the last few years has really just accelerated trends that had already begun within the industry. And, although traffic may not be back to 100 per cent, malls throughout 2022, generally speaking, flourished. People are visiting these properties with a purpose, leading to increased conversion rates. And, there seems to be a consensus among brands of the critical importance of physical storefronts to their success in most

markets. The question today is: what’s my purpose? And, from the perspective of the shopping centre, playing the traditional role of moving goods just isn’t going to cut it anymore.”

More than a shopping centre

It’s a sentiment that seems to be gaining some momentum across the country with some of Canada’s major property development and landlord players beginning to ramp up their investment in the creation of entities that are more than mere shopping centres. It’s prompting the development of a host of concepts and approaches all meant to attract the consumer and draw them into the space. And, according to Andy Clydesdale, Executive Vice President, Global Retail, QuadReal Property Group, the function of today’s shopping centre is not only changing, but serving to satisfy more aspects of an individual’s life than ever before.

Image courtesy of JLL

Vaughan Mills in Vaughan, Ontario

“One word to sum up the current state of the Canadian shopping centre? Evolving. Given that retail is always and ever-changing, it is hardly surprising that the function and utility of shopping centres must change along with it. It goes without saying that the shopping centre has moved well beyond being simply a place for transactions. These have become places to live and work as well as critical points for community connection. Additionally, there is way more emphasis today on wellness, service and entertainment and experience uses. The need to really stick to your knitting is also very apparent right now as the well-located, well thought-out shopping centres with a very clear modus operandi are the centres that are thriving. In other words, the strong really are getting stronger.”

Contributing to consumers’ lives

QuadReal, which manages and operates 13 different shopping centres across the country, including the impressive Oakridge Centre in Vancouver, Toronto’s Bayview Village, and Marche Central in Montreal, has gone a long way to help set a standard within the industry by way of its approach to property development and the lens through which it views the retail experience. In fact, Clydesdale recognizes the somewhat unique thinking that drives he and his team, particularly around building the right kind of tenant mix for the centres QuadReal manages.

“We’re very much about curating something special and true to the brand,” he asserts. “There’s enough same-same in our industry so we aren’t looking to replicate the retail offering of the mall down the street. Of course, that requires an understanding of who you are from a brand perspective, an acceptance of the fact that you can’t be everything to everyone, and a refusal to compromise. At the end of the day, we’re looking for ‘kindred spirits’ - amazing retailers; synergies with our brand and our existing tenants; the missing pieces of the merchandising puzzle; and tenants who are going to contribute to the overall ‘day in the life’ for our customer.”

Differentiated tenant mix

Curating that special offering through a thoughtful mix of tenants that differentiate a shopping centre from all of its competitors is becoming increasingly important to ensuring their shortand long-term success, says Lisa Hutcheson, Managing Partner at J.C. Williams Group. In fact, she says that centres that understand this need will be those that rise to the top within such a competitive and evolving market.

“The Canadian shopping centre is, at the moment, in a bit of a state of transition,” she says. “And, it’s a transition that’s needed. The pandemic certainly shook things up a little bit, changing the utility of the shopping centre to serve more as micro-fulfillment centres and convenience locations. But, today, as we start to move away from the pandemic, every property is showing them-

At the end of the day, we’re looking for ‘kindred spirits’

- amazing retailers; synergies with our brand and our existing tenants; the missing pieces of the merchandising puzzle; and tenants who are going to contribute to the overall ‘day in the life’ for our customer.”

- Andy Clydesdale, QuadReal Property Group

selves as incredibly unique and must be looked at that way by developers and landlords. The shopping centre was originally a place for community. But, over time, it became a bit commoditized and very much homogenized. Today, however, landlords are starting to curate their offering a little more, understanding the need to create a compelling community focus for their specific demographic.”

Dropping anchor?

Hutcheson goes on to explain that, in addition to the need to shake things up a little bit from a merchandising and offering perspective, Nordstrom’s exodus from Canada is set to really shake things up across the country, leaving most shopping centre management teams with no choice but to get creative to fill the resulting void.

“Recent developments involving Nordstrom are really going to change the way shopping centre landlords look at the mix of brands within their locations,” she says. “Because of the size of the spaces that Nordstrom occupied, there’s no one-

“Going forward, we’re likely to see themed nodes or clusters, involving some form of entertainment or food offering, serving to fill the vacuum and taking over the role of anchor in order to draw visitors and traffic to shopping centres.”

- Lisa Hutcheson, J.C. Williams Group

Image courtesy of Quadreal Property Group

Oakridge Place in Vancouver

size-fits-all solution to filling these vacancies. Originally, the brand presented most shopping centres with an easy plug-and-play. However, its departure has really called the idea of the shopping centre anchor store into question. In fact, this may spell the end of the traditional department store anchor. If it wasn’t in play prior to Nordstrom’s exit, it certainly is now. Going forward, we’re likely to see themed nodes or clusters, involving some form of entertainment or food offering, serving to fill the vacuum and taking over the role of anchor in order to draw visitors and traffic to shopping centres.”

The speed of change

Michael L. Kehoe, the Broker of Record at Fairfield Commercial Real Estate in Calgary, Alberta, also recognizes the need for shopping centres to differentiate themselves through a unique offering that can’t be found in too many other places. However, the commercial real estate veteran, who’s been working in and around retail for the better part of a half century, says that the speed at which the industry moves, particularly its cur-

rent acceleration, poses the biggest challenge in achieving the goal of the right tenant mix.

“Over my 47 years in the industry, I can say that the pace of change at this time is unprecedented,” he states. “The ability of today’s sophisticated shopping centre owners to quickly cycle space to new and fresh retail and food service concepts is impressive. This ensures that shopping centers remain relevant to the shopper with fresh offerings and experiences that are available for consumers who have many shopping and dining options.”

Having said this, however, he goes on to explain that, in his estimation, shopping centres across the country are currently in a “vulnerable” state during a time in which the most innovative, and financially sound, centres will win out.

“Shopping centre retailing is a Darwinian struggle at the best of times, and it’s no longer a matter of survival of the fittest,” he says. “It’s survival of the innovative, the quick to adapt to change and new trends, and the survival of the financially stable. Rising operational costs and property tax-

Image courtesy of Quadreal Property Group

TriCity Central in Coquitlam

es make many shopping centers unaffordable for new entrepreneurial retail ventures and unique chef-driven food service concepts. In a troubled world, shopping centers need to work hard to be that safe place for consumers to visit, especially for the coveted female shopper and their families.”

Community gathering places

To do this, Kehoe explains, shopping centres must reaffirm their purpose and revisit the basic concept of retail, reigniting them as the community gathering places that they once were and the cultural beacons of the areas that they serve.

“The operative word is ‘community’ and how these properties can serve their primary trade areas and beyond to create an experience for the shopper on every visit,” he says. “A primary trade area focus is needed that will ensure that each shopping centre has a local identity with the best-in-class local retailers and eateries along with a mix of national and international brands where possible. Does your local shopping centre

say “Calgary, Moncton or Burnaby” when you think of it? If not, they are undifferentiated and could very well be in trouble. With my age and experience, I recall fondly the days of community events in mall common areas, fashion show runways and sidewalk sales. The bygone era of the mall merchant association where the landlord and tenants met, and talked to each other, on a regular basis to promote and advertise the shopping centre. We need to look beyond the landlord’s proforma on rental expectations and focus on affordable rents for retailers and food service entrepreneurs.”

Rediscovered purpose

It’s a concept that’s showing up, and being blown up in the very best of ways by some developers across the country, in mixed or alternative use properties where there is something for everyone. It’s also a concept that JLL’s Lessner lauds as, at least, part of the answer in properly addressing the needs of today’s consumer and elevating the Canadian shopping centre to once again become conduits of communication, engagement and excitement and activity for patrons that frequent the spaces.

“The Canadian shopping centre is ultimately going back to its roots as a community gathering place. Back when the first shopping centre was introduced, it wasn’t just a mall where people consumed goods. It contained food and beverage purveyors, entertainment, medical and a number of other different offerings and uses. And that’s where today’s centre is going, rediscovering its purpose as a hub within the communities that they serve. But this is a concept and philosophy that’s going to require perpetual reinvestment from the landlord. And, it’s also going to require greater collaboration between landlords and their retail tenants. It’s a partnership. If the right tenant mix has been curated within a mall, and the right kind of events and attractions are being presented, consumers will want to shop at the mall, resulting in a flourishing retail community and the growth of landlord asset valuation.”

“The Canadian shopping centre is ultimately going back to its roots as a community gathering place. Back when the first shopping centre was introduced, it wasn’t just a mall where people consumed goods.”

- Paul Lessner, JLL

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Vaughan Mills in Vaughan, Ontario