Retail Insider the magazine, Volume two Issue two

✅ 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

Examing the state of luxury, grocery and e-commerce retailing in Canada

I’m very proud to present to our readers the second instalment of the second volume of Retail Insider the magazine. The team here continues to be committed to bringing the Canadian retail industry the best in terms of insights and coverage of the industry. In this issue, I’ve authored a piece on luxury retail moving to the suburbs in Canada, and we have several other authors who have contributed some very insightful content.

We’re well into summer, and retailers in Canada are gearing up for a busy fourth quarter which is for many the most lucrative time of the year. With this in mind, this issue of Retail Insider the magazine, Volume II Issue II, provides insights into some of the more significant trends that are helping to shape the future of retail, sparking creativity and innovation from leading brands across the country in their attempt to continue satisfying the needs of their customers.

The first of a series of quarterly columns by author and the Founder and CEO of Inception Retail Group, George Minakakis, highlights the idea of the retail ‘Moment of Truth’, how businesses can seize upon them for more positive business outcomes, and how a deep understanding of the concept can help retailers remain relevant, differentiating themselves within a crowded market.

Lisa Hutcheson, Managing Partner, JC Williams Group, shares her views concerning today’s fastpaced retail landscape and the steps that organizations can take to future-proof their brands for continued growth and success.

The Food Professor, Sylvain Charlebois, discusses the current state of grocery and the continued rise in adoption of online food purchases among Canadians. And we chat with David Nagy, Founder of eCommerce Canada, about the trends impacting online sales, some of the challenges that retailers face, and where the opportunities might be to realize greater success.

In an expansive feature article, I dive deep into the world of luxury retail, exploring the simultaneous exit of top luxury brands from major urban centres and their entrance into suburban malls across the country, examining the reasons that are contributing to this phenomenon and proffering what might lay ahead for the sector.

We’d like to thank all of our incredible retail experts, content contributors, and industry partners who have helped to make this issue of the magazine the best yet. And, we’ll look forward to receiving feedback from you, our readers, concerning the topics that we’re covering and content we’re developing to help you and your teams navigate your retail journey.

Sincerely,

Craig Patterson Publisher craig@retail-insider.com

A unified approach to retail operations, including a confluence of creativity, innovation, technological advancement, and retail intuition is leading to significant improvements and enhancements for brands throughout the industry.

26

Possessing a deep understanding of your brand and the experiences that you offer your customers is integral toward ensuring long-term retail success.

Consumers across the country are increasingly purchasing more of their food items online, leading many Canadian grocers to enhance the experience they offer and service they provide in order to continue meeting expectations.

Shifts in luxury locations across the country are leading to changes in shopping behaviours and an assessment of their presence in major urban markets.

Canadian e-commerce performance is currently lagging in parallel with the state of global economic conditions. However, boosted by the promise of technological advancements, online growth might be just around the corner.

14 // Retail Executive Roundtable A unified retail experience for greater performance

// Brand Strategy Future-proofing your retail brand through differentiation, distinctiveness, relevance, and sustainability

30 // Luxury Retail From High-Street to the mall: the changing face of luxury retail in Canada

36 // Grocery Retail Expert: growing appetite for e-grocery in Canada

40 // E-commerce Slowing online sales ahead of big opportunities

MASTHEAD

ASSOCIATE PUBLISHER

Dustin Fuhs

EDITOR-IN-CHIEF

Sean Tarry

GRAPHIC DESIGN

GBC Design

CONTRIBUTORS

Shelby Hautala, Lisa Hutcheson, George Minakakis, Craig Patterson, Corinne Pohlmann, Mario Toneguzzi

HEAD OF SALES AND SPONSORSHIP

Darryl Julott

darryl@retail-insider.com

EDITORIAL OFFICE

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

Fashion forward

According to research revealed within JLL’s Spring 2023 Retail Outlook, apparel and footwear sales are surging, leading the industry’s recovery in the aftermath of the COVID-19 global pandemic.

Platform traffic share

Year-over-year sales growth

35% Clothing and Accessories

32% Footwear

Similarweb – which tracks traffic and engagement data based on aggregated and anonymized first-party analytics shared by millions of websites and apps –revealed its numbers for May 2023, including the platforms that Canadians are leveraging most to connect with brands.

53.5% Mobile 42.1% Desktop

4.4% Tablet

Consumer inflation perceptions

Price inflation has impacted industries all over the world, forcing many retailers to adjust their purchasing strategies and offering. However, the most significant ramifications caused by increases in cost are being felt by consumers. Within a survey recently conducted by Capterra, consumers share their perceptions concerning the most significant product price increases that they’ve noticed while shopping.

98% Groceries

66% Sustainable products

78% Beauty and sanitary products

63% Electronics

70% Clothing

55% Home appliances

Improving retail outlook

73.5%

Statistics Canada recently released data related to its Canadian Survey on Business Conditions, Second Quarter 2023. And, it seems as though retailers and other businesses and organizations across the country are feeling a little better about the future.

Nearly three-quarters of Canadian businesses reported being either very optimistic or somewhat optimistic about their future outlook over the next 12 months, representing an improvement from the previous quarter (67.5%).

Reasons to shop in-store?

Consumer shopping habits have evolved slightly over the course of the past few years, impacted by restrictions and apprehension resulting from the COVID-19 global pandemic. However, according to PwC’s Canadian Consumer Insights March 2023 Pulse Survey preferences have begun to solidify, with shopping at physical retail locations remaining consumers’ first choice. In fact, survey results reveal that 73 per cent of Canadian consumers shop at physical stores at least once every month. And… they have their reasons.

56%

Check the product is the correct item and not broken/ faulty

44%

Enjoy shopping in-store and missed it during COVID-19 lockdowns

52%

Prefer to view/test products before buying

35%

Online product delivery costs are too high

24%

Less concerned about COVID/more secure with health measures

Inflation’s impact on business

21%

Online product delivery times are too long

Shopify’s Commerce Trends 2023 – its annual report that’s pulled from proprietary data, insider experts, and top global brands –reveals some of the top concerns that business leaders have concerning the impacts of inflation on their organizations.

83%

Are very concerned about the risk inflation poses to company growth

82%

Say high inflation is forcing them to reduce company costs

81%

Have plans to increase product prices due to inflation

71%

Say their company is preparing for a recession next year

Time to level the e-commerce playing field to ensure equitable competition

Government action and education critical in enabling Canadian small businesses to compete online with their larger competitors

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

Online shopping has exploded since the pandemic, but it has not necessarily benefitted all businesses equally. One of the great things about e-commerce is that it gives any business a chance for their products or services to be found and purchased online, but today powerful corporations dominate the digital market. Especially since the pandemic, e-commerce has been an effective space for entrepreneurs to grow their businesses, but it has become increasingly more difficult for many of them to compete online.

At the same time, Canada’s Competition Act has failed to effectively keep up with emerging technologies and a changing economic landscape. The Government of Canada recently launched consultations on modernizing the legislation. The Canadian Federation of Independent Business (CFIB) responded by calling for small and medium-sized enterprises (SMEs) to be better acknowledged by the Competition Bureau and for them to do more to ensure a more equitable market for small businesses to compete with larger organizations.

The state of competition

SMEs represent nearly half of Canada’s GDP, employing 88 per cent of the workforce and driving our economy. However, each year fewer Canadians start their own businesses. With the

increase in corporate giants within Canada, it is no surprise that many small business owners are finding it more and more difficult to compete. Corporate consolidation has become a worrying trend, with 89 per cent of SMEs wanting the federal government to play a role in ensuring fair competition. Consolidation can also have a negative impact on small businesses as two-thirds (66%) noted that an increase in large corporate giants operating within Canada was making it harder for them to compete. Not surprisingly, businesses in the retail (78%) and hospitality (71%) sectors were more likely to say that the emergence of these larger firms has made it harder for them to compete.

The anticompetitive effects of big business

Big businesses control a lot of the digital market, owning the platforms on which e-commerce takes place and guiding how customers navigate the internet to make their purchases. A majority (90%) of small business owners agree that the dominance of big business in the e-commerce space threatens Canadian small businesses. Poor reviews, for example, have the capability of massively affecting small businesses’ rank on search engine algorithms. Consumers make

quick decisions, and small factors can influence a buyer. Negative reviews are often difficult to challenge and require the owner to dedicate time and resources to the issue that they would have preferably spent somewhere else. To stay afloat, small businesses are forced into dealing with larger companies and must often operate within platforms owned by corporations like Yelp, Google, or TripAdvisor.

In today’s economy, many SMEs feel the need to participate in e-commerce in order to be competitive. But, this also comes with some significant upfront costs that can be difficult to recover. For example, Amazon Marketplace is a platform that small businesses often use to sell their products. However, some SMEs have found that many consumers are encouraged to buy the company’s own products over those offered by small businesses. We have also heard of a number of instances of small businesses being prohibited from selling certain products, with their listed products ending up lower in search results than Amazon-certified items.

Many SMEs have also shared that they have a difficult time communicating with their customers and are forced to deal with Amazon’s customer support (which can be its own challenge) while paying to use their platform. So, it’s no surprise that nearly three-quarters (71%) of SMEs believe that corporate giants should shoulder larger penalties for abusing their dominant position in the market.

As online shopping has grown more than 50 per cent between 2018 and 2020, now is as good a time as any to try and resolve some of these issues and create a more equitable digital space for small businesses, starting with making improvements to the Competition Act to better address these emerging issues.

Recommendations

While there is no simple solution, CFIB has a few recommendations for the federal government to

make things easier for smaller businesses trying to compete in the growing digital marketplace.

-Reducingtheregulatoryburdenplacedon smallbusinesseswouldallowthemtoremain productiveandcompeteonamorelevelplaying fieldwithlargerbusinesseswhofacemuchlower regulatorycostspercapita.

-Bettereducationandtrainingareneeded onhowtodetectandmanageharmfuldigital practicessuchasmaliciousreviews,deceptive marketingpracticesorabusivebehavioursby dominantfirms,thatlimitthescopeandability ofsmallfirmstocompete.

-ImprovementstoCanada’sCompetitionActare longoverdueasCanadafallsfurtherandfurther behindothercountriesinreigninginsomeof theseharmfulbusinesspractices.

It is high time for the Canadian government to act to ensure that many more innovative small businesses have the ability to effectively and fairly compete and ensure the future health of the Canadian economy.

-------

CorinnePohlmannistheSeniorVice-President ofNationalAffairsandPartnershipsatCFIB, Canada’slargestassociationofsmall-andmedium-sizedbusinesseswith97,000membersacross everyindustryandregion,22,000ofwhomare operatinginretail.

Image by cnythzl

Sculpting customer experience: it’s about your brand’s ‘Moments of Truth’

Evolving traditional customer service strategies to better understand, and satisfy, the needs of today’s shopper

// By George Minakakis, Founder and CEO of Inception Retail Group, and Author of The New Bricks & Mortar Future Proofing Retail

In an era marked by technology’s quantum leaps, businesses are crafting new methods to cater to customers. The rise of artificial intelligence has opened unique customer-business touch-points, igniting global interest in AI assistants, advisors, and companions. Retailers are harnessing technology to capitalize on data and captivate customers by engineering memorable experiences.

Customer experience has evolved into a critical facet of modern business planning. Organizations strategize meticulously to deliver positive, lasting encounters to their customers. However, amid the intricate art to create the tapestry of customer experience, a crucial piece often goes missing - the ‘Moments of Truth’.

Traditional customer experience strategies are built upon a lucid vision and definitive objective. The vision typically delineates how the company seeks to be viewed by its customers, while the goal helps identify tangible targets to actualize the vision. While these elements are crucial and often well-established by businesses, strategies built solely upon them often result in customer experience pitfalls. The essence of customer experience lies not just in grand visions and ambitious goals, but in how these concepts are mirrored in each customer interaction with the brand. This is where ‘Moments of Truth’ are crucial. Everything is in the details.

The retail world I was in had high levels of customer personalized touch-points. There was no room for error. In that retail reality, the minutiae mattered, from clean window displays and glass doors to pristine change rooms and meticulously kept cash wrap areas, in addition to the level of service delivered from each retail associate. To many of my colleagues’ chagrin, I paid extreme attention to these details and was instrumental in delivering consistent business growth. Yet, these ‘Moments of Truth’ define a brand’s potential.

So, what are ‘Moments of Truth’?

Swedish businessman Jan Carlzon first introduced the concept of ‘Moments of Truth’. This idea, later popularized by Tom Peters, refers to those pivotal instances during which customers engage with a brand and form an impression. Ranging from a discussion with customer support to the product unboxing experience, these moments represent the sum total of a customer’s journey with a brand, encompassing all facets of service and training.

Consider this: most training regiments and their execution are meant to determine a brand’s abil-

ity to affect sales and customer loyalty. A decline in customer loyalty and or sales often signifies inadequate attention and lenient performance standards in a brand’s commitment in their delivery. Yes, performance standards are important and essential in meeting customer expectations. Just as they are in landing an aircraft safely or performing successful heart surgery. Relying solely on chance that things will go well without standards could lead to significant failures, as we have seen for decades in the retail industry. In other words, landing a plane flawlessly or delivering a perfect heart surgery shouldn’t be based on luck.

Overlooking ‘Moments of Truth’ in a customer experience strategy is akin to constructing a house without a blueprint. Clear vision and goals are crucial. But without a thorough plan to translate these into tangible service steps, vision and goals can be for naught.

In customer experience terms, a business might have a clear vision (say, being the industry’s most customer-centric brand) and a defined goal (like achieving a specific Net Promoter Score). But without managing ‘Moments of Truth’, these goals may be elusive.

Merely training staff to handle various customer interactions won’t suffice. The entire service delivery process should be designed and deliberately managed, focusing on ‘Moments of Truth’. This approach requires that the retailer possess a comprehensive understanding of the customer journey, as well as the ability to recognize all potential touch-points, and strategizing the best possible experience at each interaction. I’ve witnessed this in consumer-facing industries with high-level personal touch-points. The best-inclass are artists.

Brands like Apple, Amazon, and Sephora have mastered the customer experience that they offer by diligently managing these ‘Moments of Truth’. They don’t merely have a vision and a goal. They have a robust blueprint that steers each customer interaction, reflecting their vision and goal in every step.

It all begins with strategizing and executing what the ideal experience for your customer should be. This approach unifies all aspects of service and employee training, creating a harmonious, positive brand image in the customer’s mind. Indeed, these moments are pivotal in shaping a brand’s perception.

Each brand will be different

First you need to start with your brand story. What do you stand for? What elements of your brand make it unique and how is all of that transformed and translated into service steps and standards? Define them and lay the groundwork for tangible training and development.

The ‘Moments of Truth’ in your brand must be exclusive, customer experiences that are authentic. And then comes the two real hard parts. The customer experience must be consistent throughout the organization, and it needs accountability and follow up.

In conclusion, consider this challenging question that I asked in my last book: is the future of retail Art, Aspirational or AI?

Retailing’s future is no longer simply an equation, but rather an exhilarating canvas painted with the artistry of personalization, the audacity of aspiration, and the precision of AI absorbing

and delivering data. Yes, our journey towards sculpting the quintessential customer experi ence hinges on these three pivotal pillars - Art, Aspiration, and AI. The challenge, and indeed the opportunity, lies in how skillfully we can use these tools to etch our ‘Moments of Truth’ on the ever-changing canvas of customer expectations. Keeping in mind that when Jan Carlzon and Tom Peters launched this thought-provoking incentive to grow our customer experiences with ‘Moments of Truth’, they didn’t have access to the technology we do today.

Therefore, we must be swift to adapt, innovate, and above all, we must create. We can no longer afford to rely on the past laurels of our brand experiences. We must continually reinvent our ‘Moments of Truth’, else we find ourselves in the shadows of irrelevance, chasing the luminaries.

GeorgeMinakakisistheCEOofInceptionRetail GroupandAuthorofTheNewBricks&Mortar FutureProofingRetail.

Image by atakan

By Sean Tarry

Overthe course of the past few years, retailers in countries around the world have been presented with a number of challenges and hurdles to overcome in order to remain competitive. Labour shortages, supply chain issues and escalating inflation are but a handful of these challenges and hurdles, giving rise to the need for greater operational- and cost-efficiencies and the concept of a unified approach in order to satisfy these business objectives.

In light of this, RetailInsiderthemagazine gathered some of the industries brightest minds together for an exclusive Retail Executive Roundtable discussion. With a focus on a unified approach to sales and fulfillment, participants shared the ways in which they’re leveraging the latest advancements in retail technology in order to revolutionize omnichannel performance and optimize operations, while exceeding customer expectations and fueling future growth and strategy.

Eric Ouaknine Vice President of Retail Browns Shoes Inc.

Lesley Hawkins VP Retail adidas

Stewart Schaefer President and CEO Sleep Country Canada

Ilana Santone Senior Vice-President of Digital & Connected Retail Canadian Tire Corporation

Samir Kulkarni CEO Showcase

Supported By:

Your Partner for Retail Services in Canada

RITM: Retail has transformed significantly over the course of the past 10 to 15 years. The explosion of e-commerce and increased mobile penetration has resulted in an array of channels through which today’s consumer can shop. The COVID-19 global pandemic accelerated online and mobile trends, increasing expectations related to the retail shopping experience. With this in mind, what are the expectations of today’s consumer when it comes to the retail experience?

Lesley Hawkins Consumers are looking for more. They have the ability to buy any product at any time from anywhere, just by using the device that never leaves their hand. As retailers, we need to give consumers a reason to get into their car or jump on a bus or train to head to brick-and-mortar locations. It starts by providing personalized service that the consumer cannot get anywhere else. Knowing your consumer - what they like, what size they wear, their personal taste - and then leveraging that knowledge by reaching out when collections or products drop that might satisfy their needs. Next, we need to create a seamless consumer journey, so if we don’t have something in store that they want, we can order it for them online from the store floor, and have it delivered to their home or preferably back to the store, so we can continue the service.

Samir Kulkarni: Today’s consumers are certainly living in a digital age, where convenience, speed, and efficiency are paramount. However, the expectations of the modern consumer extend beyond just these elements. Today’s consumers expect a seamless and flexible shopping experience in which they have the freedom to shop from wherever they are, whether it’s in a physical store, on their laptop at home, or via their mobile device on the go. And, they’re seeking

flexibility of options as well with respect to the ways they want to purchase, receive and return product, allowing them to blend their online and offline shopping experiences in a way that suits their personal needs and preferences. Despite the increasing shift towards digital commerce, however, consumers continue to value social connections. They appreciate businesses that engage with them on a personal level, whether it’s through social media interactions, personalized emails, live chat, or face-to-face conversations in a physical store. And, consumers still love the thrill of discovery. They want to find new, unique, and trending products, and they want to be able to interact with these products before making a purchase, lending further merit to the immediacy and tangibility of brick-and-mortar stores that offer experiences that can’t be replicated online. The most successful retailers will be those who can effectively integrate these various elements into a cohesive, omnichannel retail strategy.

Eric Ouaknine: I think today’s consumer is looking to have what they want, when they want it, where they want it in a unified and consistent way regardless of the channel. And as a retailer, if we want to remain relevant in the customer’s eyes, it’s our obligation to deliver on these expectations. The proliferation of e-commerce throughout the pandemic allowed us to garner more market share and introduce our unparalleled service in-store to many customers who were introduced to us digitally. Many customers bought online and picked up in store and even returns in-store were an opportunity for our sales team to spoil the customer and give them a reason to shop with us again.

Ilana Santone: The retail landscape was already evolving at an incredible pace when COVID-19 changed customers’ expectations rapidly and permanently. Now, as we moved beyond the challenges of the pandemic, customers have been returning to stores as they offer immediacy, discovery, and more convenience. At the same time, customers are continuing to shop using digital

channels and are taking advantage of convenient options such as click-and-collect, curbside pick-up, and deliver-to-home. Omnichannel is now the expectation and retailers that provide the most seamless experience across digital and physical channels and allow customers to choose how and when they shop will be the ones who continue to succeed and grow. At Canadian Tire Corporation, specifically, the challenges of the pandemic accelerated our digital evolution. We know our customers want and expect a seamless omnichannel experience and are investing accordingly. Through our $3.4 billion ‘Better Connected’ strategy, we are investing $2.2 billion to create a connected omnichannel customer experience, including expanding our ‘Triangle Rewards’ loyalty program to drive customer engagement and fuel growth across our banners, improving the connection between our digital and physical channels to drive an enhanced customer experience, and transforming the online user experience across all banners through our ‘One Digital Platform’.

Stewart Schaefer: Despite where the shopping activity is taking place, whether it’s in-store or online, and regardless of the many new AI-driven technologies and tools that are being developed and implemented, consumers ultimately want their experience to be seamless and convenient. Prior to the pandemic, the whole world thought that the very notion of brick-and-mortar retail was falling apart and that digital would eventually replace just about every aspect of, and touch-point within, the retail consumer journey. When the impacts of COVID started to be felt, most businesses that were without an established digital presence were likely out of business pretty quickly. And then, when the impacts of the pandemic began to subside, people started to remember the fact that 68 per cent of the Canadian GDP is driven by shopping. It’s an experience that people really enjoy. We just need to consistently ensure that the experience that we offer at store level matches the seamlessness and convenience of our online offering.

RITM: What are some of the biggest challenges that retailers face today when trying to meet these evolving consumer needs and preferences across various channels?

SS: Sleep Country is on the verge of undergoing one of its biggest transformations to date with the introduction of digital channels into our brickand-mortar stores. It’s a component that will allow for an endless aisle within our physical spaces, helping us broaden the selection of product available to customers. Today’s consumer, more than ever before, wants to shop when, where and how they want. And, above all, they want choice and options throughout their journey. Providing consumers with the opportunity to come into our store to speak with one of our knowledgeable and friendly sales associates, or come into our store to browse our digital channels, or visit us online from the comfort of their home or wherever else they happen to be, allows them to interact with the Sleep Country brand the way they want to. Combining the very best aspects of the physical retail space and digital technologies is going to help us enable this experience.

SK: Today’s retailers face a number of significant challenges as they strive to meet the evolving needs and preferences of consumers across various channels. Perhaps the biggest challenge is economics. While e-commerce offers convenience and accessibility to consumers, it often isn’t highly profitable for retailers. The high costs associated with shipping, particularly for

cross-country or even last-mile delivery options, can eat into margins. While consumers have come to expect quick and often free delivery, the reality is that these services come at a significant cost to retailers. The issue of returns, particularly for online purchases, is another substantial challenge. While open return policies are appreciated by consumers and can build trust and loyalty, they can also create economic challenges for retailers and can lead to a high volume of returns, which can be costly to process and can also impact inventory management. E-commerce also opens up new avenues for fraud, requiring retailers to invest in robust and costly security measures to protect their customers and their business. And, creating a consistent and seamless experience through the integration of online and offline operations, ensuring inventory visibility, harmonized pricing and promotions, and the same level of service across channels is also proving difficult. While omnichannel retail offers great opportunities for enhancing customer experience and reaching a broader market, it also presents significant challenges. The retailers who will succeed in this environment are those who can find innovative ways to balance consumer expectations with economic realities.

LH: Omnichannel is today’s buzzword. And while retailers are striving to achieve a truly seamless experience, it’s not without its challenges. Full integration of all systems is required, not only regarding the hardware and software, but ways of working, the company culture, and mindset, too. It allows retailers to quickly pivot when consumer tastes change or a trend emerges. It takes time to adjust product assortments, update fixtures, change floor planograms, replace in-store communications.

EO: Customer expectations are at an all-time high. I can order an item on Amazon at 10am on a Sunday and receive it by 4pm the same day without having to leave the house, deal with traffic, parking, etcetera. So, while we’re working very hard to deliver quickly, that, and that alone,

is tough to compete on, especially with the Amazons of the world. What we have that they don’t is a network of 70 stores from coast-to-coast. We’re working hard on delivering unforgettable experiences in our stores in order to give our customers a reason to want to visit us time and time again. But again, it’s not one channel versus the other, it’s how the different channels work together to offer the customer a convenient and unified experience.

IS: Customer expectations are constantly evolving, and retailers need to stay up-to-date and ahead of the curve. Customers are increasingly expecting personalized experiences, and deepening one’s understanding of their customers through first-party data is critical for delivering this. Evolving customer expectations also extend to fulfillment, specifically as it relates to speed and convenience through options such as instore pick-up, same-day delivery, locker pickup, and flexible returns. Although potentially challenging, providing a seamless, omnichannel customer experience while maintaining cost efficiencies is critical. At the same time, technology is rapidly changing, and retailers must determine the best way to integrate new technology to enhance their customer experience while ensuring customers who rely on more traditional shopping methods are not left behind.

RITM: When it comes to satisfying customers, there are few better ways to achieve this than having the product that they’re looking for in-stock and ready to purchase. With respect to inventory visibility and balancing, what in your estimation are some of the things holding retailers back from finding efficiencies and capitalizing on opportunities across all distribution channels?

SK: Having the right product available at the right time in the right place is a cornerstone of satisfying retail customers. However, achieving this level of inventory optimization can be challenging due to several factors. One of the main challenges is balancing inventory between distribution centres and physical stores. This has been a complex issue over the past three years due to supply chain uncertainties. It has been particularly challenging for time-sensitive categories like seasonal, perishable, and event-based merchandise. At Showcase, we’ve adopted a just-in-time approach where we aim to keep more than 50 per cent of our goods in our distribution centres, allowing us to push products to stores based on their actual rate of sale, ensuring that each store has the stock it needs when it needs it. Shrinkage has also become a significant issue in recent years, to the point where retailers are closing permanently in high-risk areas. Shrinkage has doubled over the past three years, leading not only to direct loss of sales and margins but also to inaccurate inventory data. The overall effect of these challenges is an increase in operational costs, which ultimately leads to higher prices for consumers. Managing these costs while still providing the level of service and product availability that customers expect is a key challenge for retailers today. The challenges are many, and retailers need to find innovative ways to manage these issues in order to maintain customer satisfaction while also keeping costs in check.

EO: It’s always a tough balancing act between keeping your stores stocked versus your DC. Historically, we’ve opted to keep a larger proportion of our inventory in our DC in order to centralize distribution. With the launch of our ship from store initiative, in which we can ship orders directly to customers from store. It allows us to get orders into customers’ hands faster than ever before, especially in the West, as our DC is in Montreal. And, it gives the customer who is shopping in store a higher chance of finding and leaving with the product they came for. From an inventory balancing and customer experience

Fulfilling the promise of availability

Product shortages and delivery delays are one of the most common irritants stated by consumers concerning their experiences with brands. When asked within a PwC survey, a large percentage of consumers stated to have suffered the following disruptions during recent shopping trips:

Online84%

90%In-Store

Rising household goods prices

Online67%

72%In-Store

Unable to purchase out-of-stock product

Online60%

67%In-Store

Reduced product ranges available

Online60%

54%In-Store

Longer delivery times than promised

Online58%

53%In-Store

Longer delivery times than expected

perspective, keeping more stock in store, closer to the end customer is very much a win-win.

LH: It’s not for lack of desire, but the ERP systems often adopted by companies are more focused on the needs of the wholesale customer than the retailer. We require fast turn, small volume, regular shipments with consistency of delivery to our back door.

IS: The challenges of the past few years demonstrated how critical a strong supply chain is. Some retailers are held back by their technology, such as outdated inventory management systems and siloed, decentralized data, which create inaccuracies. Others face inefficient processes, which can create delays and a lack of visibility. One of the ways we are driving inventory accuracy and visibility across our SportChek and Mark’s banners, specifically, is by leveraging radio-frequency identification (RFID) technology, which enables our teams to efficiently track and manage inventory in real-time. Each item tagged with an RFID chip can be identified and located quickly and accurately, eliminating the need for manual counting and reducing errors, ultimately enabling the business to maintain optimal stock levels, reduce out-of-stock situations, and improve overall inventory accuracy.Inventory visibility is also critical to customers. We display our inventory to ensure customers can easily find it in-store or online and are constantly looking for innovative ways to make finding products even easier. A great example is the capabilities we are building out through our Canadian Tire Retail mobile app. Knowing that customers were already using our app while in the store – to make decisions, compare products, check inventory, and find aisle locations – we saw an opportunity to make their shopping experience even easier through flashing electronic shelf labels. While in the store, customers can browse a specific product in their mobile app and, by triggering the “find product” capability, will cause an LED light on the electronic shelf label to flash green for thirty seconds, making it easy for customers to find exactly

which product they need. This feature is currently available in 70% of Canadian Tire Retail stores, and we are continuing to build on this to ultimately create an end-to-end wayfinding experience, tailored to each store, enabling customers to find exactly what they are looking for.

SS: Understanding that we can’t be everything to everyone has been the mantra of Sleep Country for over 29 years. Our focus is on what I refer to as ‘non-fashion utility bedding’. For example, somewhere around 80 per cent of all sheets sold in Canada are either white, ivory, taupe or grey. I’d rather satisfy the needs of 80 per cent of the population by having the item that they’re looking for in stock, rather than compromise our service by trying to bring in a whole other range of product in an attempt satisfy the other 20 per cent. At the end of the day, the experience that the customer receives from a brand is as important as the product they’re buying. So, we do everything we can to make sure we maintain a narrow focus and stay in our lane, which allows us to manage our inventory accurately and effectively. We also keep a close eye on our run rates to ensure that we’re keeping pace during good times as well as bad times. You have to be disciplined in retail. When you’re disciplined and focused with respect to your product offering, managing your inventory is a lot easier.

RITM: Today’s shopping centre is currently undergoing a bit of an evolution, innovating through the development of mall-based marketplaces to serve an even greater role in reinvigorating local economy, community and culture. In your estimation, in what ways do mall-based marketplaces help to level the playing field for the brands involved?

EO: I’m for anything that can help drive traffic and improve the customer experience. Malls need to focus on giving customers a reason to not only come to the mall but, more importantly, to stay at the mall longer. Offering things like valet parking, car wash services, improved food and beverage options, specialty food markets, tutoring services, and more, opens up opportunities.

IS: Mall-based marketplaces allow smaller brands to leverage existing infrastructure and marketing tools they may not otherwise have access to. Whether online or brick-and-mortar, mall-based marketplaces help smaller brands capitalize on traffic driven through anchor properties, such as Canadian Tire.

SS: There are a lot fewer barriers of entry into the world of retail than there were when I got into the business nearly 30 years ago. And the reason is rooted in the digitization of the industry. Anyone can go online today and create a store to sell product, reaching a broader, wider audience than they could ever attract to their small, physical neighbourhood store. This, in combination with the fact that the ability to source product has changed dramatically, has removed the initial capital intensity of an entry into the industry. And marketplaces go a long way toward removing these barriers, levelling the playing field between brands. They’ve also created a lot more choice for consumers, changing the retail game, resulting in the need for retailers to become that much better at what they do in order to ensure success.

SK: The evolution of shopping centres into mall-based marketplaces is indeed an interesting development in retail. However, they come with their own set of challenges. Showcase currently operates 150 stores with 28 different landlords. This fragmented landscape makes it administratively complex to manage different marketplace setups for each landlord. The administrative cost associated with maintaining these setups would be considerable. If landlords could come

Online consumer shopping behaviour

The digitization of the world around us has significantly influenced and impacted just about everything that we do, including the ways in which we shop. And, as more Canadians foray into e-commerce, retailers will benefit from understanding their habits and behaviours.

300%

According to Statistics Canada, online sales in the country have grown by more than 300% in the past five years

28%

ecommerceDB research reveals that electronics account for nearly a third of e-commerce revenue in Canada, followed by fashion (27%), toys, hobby and DIY (19%), and home furnishings (16%).

26.4%

Canada Post survey results indicate that the average online shopper in Canada places more than 25 online orders per year.

45%

According to ReviewMoose, nearly half of Canadian consumers check reviews and products ratings before purchasing online.

together, perhaps through a body like the International Council of Shopping Centers, to create a unified solution for retailers, it might be more feasible for larger chains like Showcase to participate in mall-based marketplaces. This model can also be challenging to manage, particularly when starting from scratch. There are numerous complexities involved in setting up and running a marketplace, from inventory management to driving consumer traffic, making it difficult for a retail brand to manage in addition to their core business. In light of these challenges, it might be more efficient for landlords to return marketing funds to tenants and allow them to invest in marketing efforts that are more relevant to their individual needs and strategies, including the development of organic social content, paid ads, participation in existing marketplace sites, flyers, and other initiatives.

which outlined our ESG progress so far and journey ahead. One of our most significant sustainability milestones to date is helping to launch the ‘Canada Plastics Pact’ to eliminate plastic waste. Through this, we are collaborating with our partners to drive progress against our 2025 targets by defining a list of our owned brand plastic packaging that is designated as problematic or unnecessary, and taking measures to eliminate those materials by 2025; designing 100% of our owned brand plastic packaging to be reusable, recyclable, or compostable by 2025; and ensuring an average of 30 per cent recycled content in our owned brand plastic packaging by 2025. From a digital perspective, specifically, we’re leveraging dedicated landing pages and identifiers, such as badges, to highlight sustainable brands and products, making it easier for customers to make sustainable choices.

RITM: Ensuring the quick and efficient fulfillment of orders to consumers is obviously an important factor in satisfying their needs. However, it’s not the only one. Today’s consumer is showing an increasing desire to shop with brands that have a focus on sustainability. What are some of the current environmental initiatives within your organizations and how might a more unified approach help enhance those efforts?

SS: Ever since Sleep Country started to deliver mattresses to customers’ homes, we’ve been picking up their old beds and recycling them. And, we haven’t been doing it because it’s been an ESG initiative within the company. We do it because we consider it to be the socially responsible thing to do. We’ve also, for years now, been diverting any plastic that we use to package our product from landfills. Today, however, we have a team that drives all of our environmental initiatives. They set goals for the organization. And not piein-the-sky goals - realistic goals that are attainable and that will lend toward improving the impact of our day-to-day operations, as well as help us to continue making these improvements well into the future to ensure a cleaner tomorrow.

IS: Our country faces many pressing economic, social and environmental challenges that are critical to address to ensure a sustainable and prosperous future for all Canadians. We understand that being part of the solution is not just a responsibility – it’s an imperative to ensure the long-term success of our business, and requires collaboration with partners, vendors, Canadian Tire Associate Dealers, and our customers. Last year, we published our inaugural ESG report,

LH: At adidas, we have committed to replace all virgin polyester products with 100 per cent recycled materials by the end of 2024. And, we are already nearing our goal. We have a global initiative called ‘Move For The Planet’ in which we’ve partnered with Common Goal to help encourage everyone to move for the planet. From June 1–12, for every 10 minutes of movement, adidas donated €1 to Common Goal for projects that educate

communities on sustainability through sport, up to €1.5 million. By 2025, we aim to not only reduce our CO2e footprint per product by 15 per cent, but to achieve climate neutrality within our own operations. In addition, by 2030, we want to reduce CO2e emissions by 30 per cent along the entire value chain. To make this happen, we need to work closely with our global supply chain partners in order to reduce energy and material consumption and make greater use of green energy sources.

SK: Sustainability is an increasingly important factor in the minds of today’s consumers, and we are cognizant of this shift in preferences. We admit that we have much more to do in this area, and we believe all businesses can step up their efforts. However, as a result of a unified approach to the business, we are making progress, enhancing our environmental sustainability efforts. In response to the federal plastic bag ban, for instance, we now sell reusable bags. This initiative both supports the environment and has converted a cost centre into a profit centre. We appreciate how the federal legislation made it clear and universal, levelling the playing field and making implementation easier. In the past, municipal and provincial laws, while designed with the right spirit, have been difficult to implement, so a unified federal law has made the path clearer. As a result of extraordinary freight costs, the issue of discovering ways by which to make products and packages smaller has been forced, leading to the elimination of many bulky and environmentally-inefficient products, and the encouragement and launch of products and categories with a smaller physical and ecological footprint. More legislation could be beneficial in areas such as packaging waste reduction. The uncomfortable reality is that items with larger packaging often sell better due to a higher perceived value. While this type of marketing approach wastes ecological resources, it supports the goal of many retailers to show value to consumers. Therefore, retailers may find it difficult to move away from such practices without across-the-board legislation.

The greening of retail

As environmental sustainability and eco-conscious perspective continues to grow in stature and importance among Canadian consumers, retailers across the industry are investing an increasing amount of energy and focus into enhancing their operations in order to improve their environmental impact. According to Deloitte’s Sustainability in Retail report, brands are undertaking the following efforts:

65%

Using more sustainable materials

62%

Increasing the efficiency of energy use

53%

Using energy-efficient or climate-friendly machinery, technologies and equipment.

50%

Developing new climate-friendly products and services.

48% Training employees on climate change action and impact

RITM: Looking ahead to the next 1-3 years, what will be the biggest opportunity for retailers looking to capture the attention and spend of the omnichannel consumer? And, which technologies might be leveraged in order to help achieve this goal?

LH: Personalization is paramount, and we see that drive only increasing in the coming years. But, how will personalization be impacted by AI, both in-store and online? As consumers demand more speed, we need to find the balance between offering that type of service and the environmental impact it results in, as one cannot negate the other. For inventory accuracy, existing tools such as RFID should only improve and streamline operations. However, no matter what technology is developed, the customer experience is always at the core of the consumer journey.

SK: We believe the biggest opportunity lies in the seamless integration of physical and digital shopping experiences. We are proud of our national partnership with DoorDash, which enables us to offer same-day delivery from all of our stores from coast-to-coast. This service brings convenience to our customers and allows us to compete with online retailers on speed and accessibility. Partnerships with last-mile delivery providers will be crucial in the future as consumers continue to demand quick and convenient delivery options. Despite the growth of online shopping, however, brick-and-mortar stores remain the heart of retail. Even pure-play e-commerce retailers have opened physical stores to enhance brand engagement and provide a space for social connection. Technology that drives traffic to

physical stores, and engages customers in store, will be valuable in capturing the attention of omnichannel consumers. This can include tools for personalized marketing, interactive in-store experiences, and efficient inventory management.

EO: As we strive to deliver on our promise of giving the customer what they want, when they want it, where they want it, in a unified and consistent way, one of the challenges is inventory accuracy. A technology that we’re hoping to leverage over the coming years in order to help is RFID. Not only can it help with inventory accuracy, allowing us to deliver far more consistently, but also delivers many operational efficiencies both in-store and at DC level.

IS: Personalization creates a significant opportunity to capture spend: the better we know our customers, the more tailored offers and experiences we can provide to them. When we launched Triangle Rewards in 2018, our goal was to give Canadians more choices to earn and redeem their Canadian Tire Money. In the years since, we’ve been focused on optimizing both the program and the Triangle app by providing members with the ability to view their personalized offers in one central location. The app also allows for the management of loyalty accounts and credit cards from anywhere, so members can track credit card and loyalty transactions at the same time and view, activate, and even swap offers. Our goal is to continue offering a compelling and meaningful value proposition to achieve customer satisfaction and long-term loyalty. We also continue to enhance how customers can shop with us by expanding our ship-to-home options, including through our partnership with Doordash. In 2022, we rolled out two-hour, same-day delivery across our SportChek network. The customer experience scores were extremely positive, and earlier this year, we launched an Express Same Day Delivery Pilot at 10 Canadian Tire Retail stores in Ottawa. The initial results have been very strong: average click-to-delivery time is just over 2 hours, and the program has an NPS

[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[[

score of 80. We are now expanding to the Ottawa Valley and plan to take this program national throughout the back half of the year. Finally, leveraging technology to create the best experience for our customers is critical. As new technology continues to emerge, opportunities arise, such as leveraging AI to deliver personalized experiences and integrating shopping functionality into social media platforms and voice assistance and smart speakers. Augmented and virtual reality will also enable the integration of technology that allows customers to visualize products in their desired space before purchasing them, and creating virtual showrooms where customers can explore and experience products.

SS: I always try to see things through the eyes of the consumer. And when I do, I notice that the experience that brands provide for their visitors is the most important aspect within the retailer-consumer relationship. It helps to lay the foundation of a meaningful connection. And, if executed well, it can help set a standard, allowing the brand to define the way in which it communicates and engages with its customers. Within today’s retail shopping experience, a big requirement is the offer of convenience – getting things to the consumer quickly and seamlessly. Technology is helping to expedite this experience, particularly on the logistics side of the business, providing incredible engagement support, adding to the long-term value of those customers. And, as technologies that are supported by artificial intelligence and machine learning continue to evolve and improve, smarter information is being provided to the customer, better informing their shopping and purchasing decisions. And, on the other side of the relationship, retailers are gaining access to a bounty of rich data that will enable a much deeper understanding of the customers who are shopping with them. Ultimately, advances in technology and the introduction of new tools are allowing us to build and develop more procured and customized experiences for everyone, ushering in the true age of retail personalization.

As we continue to move forward amid the current hyper-digitization of the world around us, the retail industry is changing, and with it the ways in which brands engage, interact with and service their customers. Technological advancements, both on the front and back ends of the operation, are enabling brands to enhance the convenience they offer and find greater efficiencies. They are also providing retailers with the opportunity to capitalize on the true potential of their businesses, harnessing the very best of the physical and online worlds, reaching wider audiences while improving their environmental impact. And, through this unified approach to engagement, sales, fulfillment, and everything else in between, the industry is entering a new era of possibility and potential.

Future proofing your retail brand through differentiation, distinctiveness, relevance, and sustainability

Understanding your brand and the experience you offer customers is integral in ensuring long-term success

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By Lisa Hutcheson, Managing Partner, JC Williams Group

Intoday’s fast-paced retail landscape, future-proofing your retail brand is essential to stay ahead of the competition. New marketplace norms and realities are constantly evolving, driven by big tech advancements and changing consumer preferences. To ensure long-term success, retail brands need to focus on key aspects such as differentiation, distinctiveness, relevance, and sustainability. These changes have brought about new disrupters that challenge established brands to adapt their strategies and leverage their brand-

ing to stay competitive in this dynamic landscape. It’s time to hit refresh and future-proof your brand by focusing on four key questions:

1. Are you different, unique, and special?

2. Are you distinctive visually and verbally at every customer touch-point?

3. Are you relevant to the new marketplace norms and realities?

4. Are you sustainable short-term, longer-term, or infinite-term?

Image courtesy of peterschreiber.media

Are you different, unique, and special?

To future-proof your retail brand, it is vital to assess whether or not you stand out in the marketplace. Identify your unique selling proposition (USP) that sets you apart from competitors. It can come from your merchandise mix, service platforms, store look and feel, online and e-commerce, or other differentiating aspect of your service or offering.

What makes your brand special? Determine your brand’s core values, strengths, and attributes that resonate with your target audience. Communicate these differentiators consistently and effectively across all customer touch-points. Develop a brand identity that reflects your distinctiveness and appeals to your customers. By establishing a clear and unique brand positioning, you can create a strong foundation for future success.

Distinctive at every customer touch-point

Visual and verbal distinctiveness is crucial to creating a memorable brand experience. Evaluate the consistency of your brand’s visual elements, such as logo, colour palette, typography, and imagery. Ensure they are cohesive and reflect your brand’s personality. Likewise, develop a distinctive tone of voice and messaging that aligns with your brand identity. Apply this consistency across all customer touch-points, including packaging, website, social media, advertisements, and instore displays. By creating a cohesive and distinctive brand presence, you can build recognition, loyalty, and differentiation through storytelling in the minds of your customers.

Relevance to marketplace norms and realities

Staying relevant to evolving marketplace norms and realities is vital toward future-proofing your retail brand. Monitor industry trends, consumer behaviour, and technological advancements to anticipate shifts and adapt accordingly. Assess whether or not your brand’s products, services, and experiences align with the changing needs

and preferences of your target audience. Embrace digital transformation by integrating technology seamlessly into your customer journey. Leverage data analytics and artificial intelligence to personalize marketing efforts and enhance customer experiences. Keep an eye on emerging market segments and demographics to capture new opportunities. By staying relevant, you can maintain a competitive edge and appeal to the evolving market landscape.

Sustainability in the short-term, longer-term, and infinite-term

Sustainability is no longer a trend; it has become a business imperative. Future-proofing your retail brand requires adopting sustainable practices in the short-term, longer-term, and even infinite-term.

Leverage data analytics and artificial intelligence to personalize marketing efforts and enhance customer experiences. Keep an eye on emerging market segments and demographics to capture new opportunities. By staying relevant, you can maintain a competitive edge and appeal to the evolving market landscape.

In the short-term: focus on immediate sustainability goals, such as reducing waste, optimizing energy consumption, and minimizing carbon footprint. Implement eco-friendly packaging, recycling programs, and responsible sourcing practices.

In the longer-term: aim for sustainability across the your organization’s entire value chain. Collaborate with suppliers who prioritize ethical and sustainable practices. Engage in initiatives that support local communities and social causes. Additionally, embrace circular economy principles by exploring product lifecycle management and recycling initiatives.

In the infinite-term: consider the long-lasting impact of your brand. How can you contribute to a more sustainable future? Evaluate your brand’s purpose and its role in creating positive environmental and social change. And, engage in regenerative practices while exploring innovative solutions that promote sustainability at a systemic level.

Ensuring future success

Future-proofing your retail brand requires a holistic approach that encompasses differentiation, distinctiveness, relevance, and sustainability. By assessing your brand’s uniqueness, creating a visually and verbally distinctive experience at every touch-point, aligning with marketplace norms, and adopting sustainable practices in the short-term, longer-term, and infinite-term, you can build a resilient and successful retail brand.

Embrace innovation, stay agile, and prioritize customer needs and expectations. You can look for inspiration from the global leaders such as Nike, Ikea, Apple, and Microsoft. Here at home, brands like Canadian Tire, Indigo, Harry Rosen, Loblaws and Tim Hortons are great examples. Each demonstrates how brands can reimagine themselves and future-proof for success.

The key to future-proofing lies in staying ahead of the curve, continuously adapting, and never losing sight of your customers’ evolving needs.

As trusted advisors of the program we will work with you to draft your application program and ensure you are properly identifying your needs for digital transformation.

Digital Needs Assessment

We work in this everyday and can easily identify your gaps in technology and ensure the information provided to the CDAP program is accurate.

Digital Adoption Plan

By working with you through the application process we can become familiar with your needs and reduce the timeline to generate the Digital Roadmap and apply for the grant.

Lets Work Together to Map Your Digital Strategy Into the Future

From High-Street to the Mall: The Changing Face of Luxury Retail in Canada

Shifts in the locations of luxury retail brands across the country are leading to changes in consumer shopping behaviours and an assessment of their presence in major urban markets

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By Craig Patterson

Theface of luxury retail in Canada is changing as suburban shopping centre landlords target top brands to open stores. Over the past few decades, luxury retail has been, for the most part, the domain of urban streetfronts in Canadian cities. Now we’re seeing a significant shift across the country where luxury retailers are locating in suburban malls — something that has been typically more of an American phenomenon.

The shift is changing the way consumers shop and has become a concern for some, given that luxury retail in Canada has typically been located in places such as Bloor-Yorkville in downtown Toronto, the Burrard/Alberni ‘Luxury Zone’ in downtown Vancouver, and the Golden Square Mile in downtown Montreal. And the luxury shift to malls is only expected to continue as landlords show strong sales and aggressively target luxury brands to open in suburban malls.

It’s a phenomenon that has been seen in the United States for decades, where suburban shopping centres typically house a city’s luxury retailers while downtowns struggle. Few downtowns in major American cities have a substantial clustering of luxury stores, save for a handful of places

such as New York City, Chicago, Boston, Washington DC, and San Francisco.

Luxury in Toronto’s burbs

In Canada, Toronto is the first city to see such American-style competition in terms of luxury brands moving to the suburbs to open stores. A key year was 2009 when Tiffany & Co. opened at the Yorkdale Shopping Centre in Toronto, spearheading a luxury expansion that has resulted in the suburban enclosed mall becoming home to the largest clustering of luxury brands anywhere in Canada.

That same trend will continue over the next two years in Montreal and Vancouver, as developers complete projects that will include a substantial offering of standalone luxury brand stores.

Montreal’s Royalmount project, expected to be completed in August of 2024, will include a Yorkdale-like offering of luxury brand stores with names such as Louis Vuitton, Gucci, Tiffany & Co., Saint Laurent, Versace, Jimmy Choo, and others. Royalmount will compete for wealthy shoppers with downtown Montreal, which is

home to the 250,000 square-foot Holt Renfrew Ogilvy store containing a substantial number of luxury brand concessions.

While Montreal is home to wealthy households, many locals buy luxury goods in other destinations such as New York City, Florida, and Europe. Montreal also lacks a key luxury shopping demographic — Asian shoppers — which have buoyed high-end retail sales in Toronto and Vancouver.

Luxury disruption in Vancouver

In Vancouver, the overhaul of the Oakridge Centre on the city’s West Side will cause disruption to the downtown core as luxury brands sign leases for the newly rebranded Oakridge Park development. Prior to the pandemic, downtown Vancouver saw the opening of an impressive number of standalone luxury brand stores, while at the same time, the city’s downtown Holt Renfrew store thrived with its assortment of brands and concessions. Downtown Vancouver’s Holt Renfrew location is said to have broken records last year with sales surpassing $400 million.

That could change when Oakridge Park opens to the public in late 2024 or early 2025. The leasing team at QuadReal, which is developing the retail component of Oakridge, is pursuing big names such as Chanel and other brands owned by parent companies LVMH, Richemont and Kering.

One of the big advantages Oakridge Park will benefit from is its climate-controlled interiors with privately-owned spaces. Vagrancy and crime have increasingly become a problem in downtown Vancouver as the city’s drug trade is growing out of control. Wealthy shoppers could gravitate to Oakridge Park for a more pleasant experience that will also include restaurants and other experiences.

Yorkdale’s luxury expansion

Back in Toronto, Yorkdale is going to be adding even more luxury retail over the next couple of years when it repositions an additional 140,000 square feet of the existing mall for luxury brands. New brands will enter the market and some existing luxury brands in the mall will relocate to

Image courtesy of Oxford Properties

Yorkdale Shopping Centre in Toronto continues to expand its luxury retail offering.

larger spaces, according to sources. Some of the existing luxury brand concessions in the mall’s Holt Renfrew store will also have the opportunity to step away to operate larger standalone spaces in the new area while being given the opportunity to carry more product (including fur and exotic skins, both banned by Holts in 2021). Yorkdale’s expanded luxury offerings will make it second only to South Coast Plaza in North America according to a well-known broker, while Yorkdale’s luxury push could take further market share from downtown Toronto’s Bloor-Yorkville, which is home to various luxury store flagships.

Edmonton’s shift

Luxury retailers had operated in other Canadian cities in years past. But many have recently shifted significantly to suburban centres. Downtown Edmonton, which has seen much of its retail offering removed since the onset of the pandemic, was once home to a Holt Renfrew store as well as the location for high-end brands such as Escada, Birks and Polo Ralph Lauren. Louis Vuitton’s exit in 2019 from downtown Edmonton’s Holt

Renfrew to West Edmonton Mall is said to have been the catalyst for Holts shutting its downtown Edmonton store a year later, given that about half of Holt’s sales were in the Vuitton concession. Though, things were already challenging in downtown Edmonton with Escada and Birks having shut prior.

Now West Edmonton Mall, located in the western suburbs of Edmonton, is home to a highly productive standalone Louis Vuitton store as well as big-name luxury brands including Gucci, Tiffany & Co., Saint Laurent, and Balenciaga. Other luxury brands are said to be on the way. Canada Goose, being another brand that sold well at Holts in downtown Edmonton, now has a large standalone store at West Edmonton Mall.

Calgary’s conundrum

Downtown Calgary has managed to hold onto its 150,000 square-foot Holt Renfrew store and its lease was recently renewed. At the same time, the suburban CF Chinook Centre has been looking to secure upscale retail tenants and was success-

Image courtesy of QuadReal Property Group

Oakridge Centre in Vancouver is likely to begin diverting more visitors from the city’s downtown core.

ful in scooping-up Louis Vuitton, which in 2018 relocated from the downtown Holts to a space at CF Chinook Centre. The suburban mall is also home to Tiffany & Co. and Burberry and a Saks Fifth Avenue store (which lacks designer brands) and until recently, housed Calgary’s Nordstrom store. The downtown Calgary Holt Renfrew store has attempted to hold its own and was recently successful in maintaining Gucci as a significant brand. Sources told Retail Insider during the pandemic that Gucci was looking to open at CF Chinook Centre. But it’s instead decided to open a large ‘world of concession’ at the downtown Calgary Holt Renfrew that will house Gucci’s assortment of women’s and men’s ready-to-wear as well as bags, footwear, accessories and other categories. Downtown Calgary’s Holts also houses concessions for two very key luxury brands that cannot be found at CF Chinook Centre - Chanel and Hermes, which will keep wealthy Calgarians coming to the core at least for the time-being.

Montreal at risk

Of Canada’s three largest cities, Montreal’s downtown is the most at risk with respect to the shift of luxury retail to the suburbs. In decades past, luxury brands were found on Sherbrooke Street West and on Crescent Street, which is certainly not the case any longer. Following the exit of Escada from Sherbrooke Street earlier this year and Holt Renfrew in 2022, only Tiffany & Co. remains with a storefront at the Ritz Carlton Hotel facing Rue de la Montagne. Sources say that location will shutter when Tiffany opens at Royalmount next year, ending the decades-long luxury retail status for Sherbrooke Street, entirely.

Toronto and Vancouver are expected to remain robust for luxury retail despite the rise of suburban locations, given that both downtowns attract Asian tourists and are home to top hotels, restaurants, and other attractions. Some brokers are saying that both cities are ‘two store markets’ that can support luxury retail in both downtown cores, as well as suburban malls. What that means for Toronto is that some of the first-tomarket luxury stores that have opened at Yorkdale could also open on Bloor Street or Yorkville Avenue, if they haven’t already.

Continued suburban luxury growth

It’s an interesting trend to watch as Canadian cities become more like those in the US, particularly when it comes to the availability of suburban luxury retail brand stores. At the same time, we’re not seeing the same trend in major European cities which boast high-density populations and a lack of competition from suburban malls. What’s resulted is a situation where large European cities have thriving high streets with luxury stores, not to mention successful department stores housing big-name luxury brand concessions. Given Canada’s similar history to the US with sprawling suburbanization, highway networks and suburban malls, we may continue to see a shift to a US-like model where luxury retailers open stores in the suburbs at the expense of downtowns.

Of Canada’s three largest cities, Montreal’s downtown is the most at risk with respect to the shift of luxury retail to the suburbs. In decades past, luxury brands were found on Sherbrooke Street West and on Crescent Street, which is certainly not the case any longer.

Expert: growing appetite for in Canada

Canadians are increasingly purchasing food online, enhance the experience and service they offer

for e-grocery

online, leading many grocers to //

By Shelby Hautala

What is the future of grocery shopping in Canada? Sylvain Charlebois, Senior Director, Agri-Foods Lab, Dalhousie University, shares his views concerning the current state of grocery, new innovations, and how grocers can provide a better shopping experience for their customers.

“Right now, we are slowly seeing the return of normalized food markets in Canada, and I would say the current state of the grocery business in the country is okay - but it is not doing great as food sales have been tight,” says Charlebois.

Online grocery on the rise

As grocery store operations are slowly stabilizing, Charlebois has seen a shift toward, and a rise in the popularity of, online shopping as more Canadians have been purchasing a greater amount of their food items online since the onset of the pandemic. Based on recent estimates, about 3.4 per cent of food sales is conducted online right now, which is double the pre-COVID amount. One province where the percentage goes above 4 per cent, Charlebois points out, is Ontario, where

it’s estimated that 4.2 per cent of the province’s population get their groceries online. And, it’s a trend that the grocery expert suggests won’t be going anywhere soon.

“It may not seem like a lot, but it is quite a shift and is a huge change, and the reason I believe it is not going to disappear,” he says. “Going forward, I believe that there is going to be more business done online as more people are working from home. Employers are trying to get people back to the office. But let’s face it - people are more comfortable working from home which makes it more convenient for consumers to grocery shop online and have it delivered.”

Improved systems

At the beginning of COVID, ordering online groceries was a rigid process. Consumers often needed to wait a few days, maybe even a week, to receive their orders. Today, Charlebois says

grocery stores have improved their systems to make it easier and faster for consumers. Now, consumers can order their groceries and receive them within an hour, in most parts of the country, saving them time.

One thing that is pushing Canadians to order their groceries online, and will continue to do so, is the rise of gas prices.

“In many parts of the country, there will be a huge bump in July so it is going to cost more to drive,” he says. “So, I suspect that is something that could actually push consumers to consider online delivery just because they do not want to spend more money going to the grocery store. My guess is that people will be a little bit more careful concerning the ways in which they spend their money. And, as a result, I also suspect that the idea of getting someone to deliver your food is actually going to become stronger.”

Lagging behind global performance

Charlebois says that compared to other countries, Canada is “a bit of a laggard” when it comes to food delivery and does not necessarily expect them to catch up with the Americans. Nonetheless, he does expect big improvements all the same. Online shopping saves consumers time and money. As prices go up, Canadians will become more mindful about the ways they’re spending their money. Online shopping will present a way to more easily maintain a budget, removing common shopping habits like impulse purchases.

Online experience

With the possibility of more people shopping online, Charlebois says although some grocers have a good platform, they will only get better and will improve with the use of artificial intelligence. With the use of AI, grocers can have better control over their inventory, manage costs, and can personalize consumers’ shopping experience.

“It is about knowing what the consumers want before they do. When a retailer can start predicting behaviour, it becomes better at inventory management and begins managing costs much more efficiently.”

- Sylvain Charlebois

“It is about knowing what the consumers want before they do,” he asserts. “When a retailer can start predicting behaviour, it becomes better at inventory management and begins managing costs much more efficiently. In addition, retailers don’t need to carry as many products, presenting huge advantages that grocers are starting to embrace. They are using AI right now and will continue to do so.”

Technological evolution

Charlebois says that in-store experiences have not changed a lot throughout the years. However, the online experience has changed dramatically, and he says that “people have noticed.” And, the experience is expected to continue improving as technology advances and evolves.

The online experience is also improving as a result of the introduction of a number of new grocery loyalty programs. And, Charlebois suggests that they pose significant factors in motivating more people to shop online.

Improving in-store experience

To bring people back into the stores, Charlebois suggests grocers need to add new experiences to give them a reason to visit the physical brickand-mortar location.

“People are going out a little more now,” he acknowledges. “So maybe the grocery restaurant will make a comeback and return to the way we knew it about a decade ago. Perhaps we will see more grocers looking at getting people to eat in stores, and stay there a while, presenting grocers with the opportunity to get more spend out of the customer. As a result of COVID, people just wanted to come in and out as quickly as possible. The question today is: how do you make the grocery store a safe place again in the minds of consumers and a place where they spend more time and money in order to capitalize on the opportunity?”

Some grocery stores in Canada already provide this experience for consumers, such as Loblaws where many locations have couches, tables, a deli to grab some lunch, and a Starbucks. By bringing these experiences into the grocery store, retailers can increase loyalty among consumers. Another way to enhance the in-store experience, says Charlebois, in addition to the introduction and enhancement of loyalty programs, is to offer discounts to consumers in order to show them tangible benefits that are received for shopping at the store.

Challenges grocers face

Currently, Charlebois says labour is the biggest challenge.

“The current labour situation is really forcing grocers and their manufacturing partners to look more closely at AI and robotics,” he points out. “In fact, they do not have much of a choice. The adoption of technology has really increased as a result of the labour shortage. So, grocers are beginning to think differently about how they are going to move product and how they manage inventories.”

With respect to the consumer, inflation and rising prices are the biggest challenge. Charlebois says that consumers are upset because the prices are not dropping, even though the ingredient costs are lowering. And, he doesn’t see prices coming down. Instead, grocers are increasingly offering discounts to “save here and there,” as costs continue to rise and grocers look for efficiencies across their operation.

“Over the course of the next few months, grocers are going to be focused on building out and enhancing their loyalty programs while finding greater efficiencies within their supply chains. Going forward, it’s basically about recalibrating a little bit and providing consumers with a solid reason to visit the store in order to really reinvigorate traffic and sales.”

Images by NuTz

Slowing online sales ahead of big digital opportunities

Canadian e-commerce performance lagging in parallel with the state of global economic conditions, but boosted by the promise of technological advancements //

By Sean Tarry

The entire world is in the midst of a bit of a self-imposed holding pattern with respect to spending and long-term investment. At least, it certainly seems that way according to digital pioneer and the Founder and CEO of e-commerce Canada, David Nagy. It’s a mentality that he says is being driven by a number of factors and influences, impacting everything, particularly the performance of brands throughout the global retail industry, and the results of their e-commerce initiatives. And, in his estimation, the reluctance and hesitance that it’s breeding among consumers and retailers alike is serving to restrict growth and the profitability of business today.

“The e-commerce performance of retailers across the country, and performance of the industry in general, seems to parallel most businesses today,” he asserts. “There’s certainly some trepidation that’s been caused by a bit of a global economic slowdown. Interest rates are spiking and deal flow is down in certain sectors like real estate where there doesn’t seem to be as much transactional activity. By and large when you speak to small business owners – they’re feeling the pinch as a result of a downwards pressure that’s been placed on just about everything, including the cost of borrowing capital. Combined, these things are resulting in a bit of a pervasive economic uncer-

tainty. And, although it hasn’t yet led to a crash by any means, it’s definitely yielded a pulling back of sorts on spending.”

Untapped opportunities

Nagy continues, recognizing that there have been a number of global events that have gone a long way toward contributing to much of the economic uncertainty that currently exists around the world, including the war in Ukraine, which has all but debilitated the global supply chain. In addition, he cites the overall debt burden felt by the United States, as well as strained relations between North American entities and their trading partners in Asia, as other factors of note impacting business performance. It’s a collective of pressures that the digital retail expert says has culminated in some caution, with some onlookers waiting to see whether or not the other shoe is going to drop. However, he suggests that it’s not all bleak, offering advances in the latest technologies and capabilities as an area in which there are still boundless untapped opportunities for growth and innovation.

“There are an abundance of possible utilizations for technology within the retail e-commerce ecosystem that have still not yet been fully leveraged, many of which have the potential to completely transform the way businesses do things” he says. “From helping to find in-house efficiencies to the ways in which it can help us better understand how data moves and the ways to best capture and utilize that data, opportunities are abound. And, what that ultimately does is help level the playing field between the big guys and the small business owners, increasing the accessibility to the data that could up until recently only be accessed by the larger players. It’s democratizing things a bit, allowing smaller retailers to become really great decision-makers, enabling them to better understand their customer-bases and more effectively target their audiences, and helping them improve their product sell-through. This would have been unachievable just a few years ago. But, the access to information has now opened up significantly for everyone.”

Data accessibility

He goes on to explain that it’s an increase in the accessibility of data that’s going to fuel an explosion in retailer innovation, opening up a whole new world of possibility when it comes to personalization and customization. It will provide brands with more data points than they’ve ever been accustomed to leveraging, enhancing engagement from retailers and the types of services that they offer their customers, while elevating the digital and overall retail experience, facilitating its continued evolution well into the future.

“Data is informing so much of what we do today, both personally and professionally,” he acknowledges. “It’s driving the development of newer and better ways of doing things. And, driven by artificial intelligence and machine learning, the improvements that it’s resulting in are posing potentially dramatic changes to the ways retailers interact with their consumers and the ways in which people shop with them. It’s going to revolutionize the entire relationship, spawning

“There are an abundance of possible utilizations for technology within the retail e-commerce ecosystem that have still not yet been fully leveraged, many of which have the potential to completely transform the way businesses do things.”

- David Nagy

the creation and introduction of new tools, and a brand new way by which the retail online experience is viewed, constructed and enjoyed by people.”

An integrated reality

Not only is the advent of new technologies helping to shore up and improve the online experience, it’s also lifting levels of in-store service and offering. However, the most powerful impact of the current technological revolution, says Nagy, is the way in which it’s helped to blur the lines between the two experiences, bringing the confluence of digital innovation and physical interaction to the precipice of a truly integrated reality.

“The term omnichannel has been used by people for a number of years to describe the combination of in-store and online options and the ways consumers traverse the different channels,” he explains. “And, although the industry and their technology partners have made incredible strides with respect to this vision, it pales in comparison to what is possible and the innovations that will be introduced over the course of the next few years, helping to create the seamless, frictionless

experience that the industry’s been talking about for years.”

Transformative future

Nagy likens the current state of technological evolution and its potential impact on the digital retail experience to the introduction of the printing press or the personal computer. In fact, he suggests that the growth of today’s technology, with artificial intelligence at the centre of it all, is set to take off in the same way, resulting in changes with similar transformative effects.

“When around 800 or so businesses in North America had mainframe computers, most people couldn’t really see the wider use for them. It was a domain of exclusivity which made it economically impossible for most others to implement them and help move the technology forward. However, over the course of a decade or so, when computers ended up in billions of businesses and homes, innovation surrounding their use exploded. The same transformation is inevitable for artificial intelligence and the technologies that are driven by it. Every day new capabilities are being discovered, developed and unlocked. It’s quickly leading to the dawn of a whole new age of retail.”

Images courtesy of PenguinPickUp

It’s all in the delivery

an entrepreneurial spirit at the core PenguinPickUp’s success

//

By Mario Toneguzzi

PenguinPickUp, a growing network of convenient “one-stop pick-up” for all e-commerce purchases, including groceries, as well as outbound courier services from its courier company partners, continues to expand its presence across the country.

Brad Baker, Interim President of the company, says the organization is constantly evolving to meet the needs of its customers and partners, and to ensure it remains on the cutting edge so that it can continue to fulfill its purpose of being Canada’s most trusted shipping address.

“We are hyper-focused on being the leaders in out of home delivery and drop-off points, as well as a leader in sustainable home delivery,” he says. “With those goals in mind, we are meeting the customers where they are, with solutions that make the last mile both more environmentallyand economically-friendly. Some examples of the things we’re doing to support this include automated parcel lockers, autonomous stores, mobile pick-up solutions, e-cargo bike home delivery and expansion into new locations. Together, they

are solutions that allow us to serve even more Canadians. Keep an eye out as we continue our rapid growth and provide even more solutions for Canadian retailers and their customers.”

Addressing increasing customer expectations

Baker says retailers face increasing pressures to effectively balance the customer’s changing expectations while controlling or reducing operational costs. Mid- and last-mile delivery solutions have historically been complex and expensive for the retailer to solve – this is where micro-fulfillment hubs, and sustainable home and out of home delivery options, come in.

“Customers today have high expectations related to the e-commerce experience and want retailers to meet them ‘where they are’, namely the places where they work and live,” he asserts. “That’s putting pressure on retailers who must connect with their customers, making both deliveries and returns accessible in their neighbourhoods, on their commutes or at their doorstep. Meeting those expectations, especially as it relates to the

last-mile - which accounts for 50 per cent of delivery cost - can be incredibly expensive, and environmentally unfriendly. We must find solutions whereby retailers can meet the rising customer expectations, whilst being more economically and environmentally sustainable.”

That’s where PenguinPickUp comes in by offering affordable mid- and last-mile delivery solutions that are beneficial to both the retailer and their customers.

Evolution and growth

The company, which began in 2014, has 36 locations across the country in the Greater Montreal Area, the Greater Toronto Area and the Greater Vancouver Area. Its ambition is to open 6 to 8 more locations this year with rapid continued growth over the next 5 years - 15 plus locations annually. It is also growing its transport services.

“PenguinPickUp’s network of stores across Canada, along with our mid- and last-mile transport services, helps retailers solve the equation of meeting customers’ expectations whilst reducing operating costs and being more environmentally-friendly in several ways,” says Baker. “Our locations provide pickup and drop-off points in Canada’s major urban centres, within walking distance to millions of Canadians. In this model, retailers are more accessible to their customer-base by being closer to where they live and work. By enabling the customer to pick up and return goods at PenguinPickUp locations, the retailer can offer greater convenience, saving them time and money - versus the cost of a home delivery - and giving them security and peace-ofmind that their parcel is well-cared-for, with no worry of porch pirates or their package being lost amongst overflowing condo lobbies.”

In addition, Baker says that PenguinPickUp places significant emphasis on going above and beyond in order to represent itself as an extension of its retail partners that it’s providing services to and on behalf of.

“PenguinPickUp’s network of stores across Canada, along with our midand last-mile transport services, helps retailers solve the equation of meeting customers’ expectations whilst reducing operating costs and being more environmentally-friendly...”

- Brad Baker

Top: PenguinPickUp’s e-cargo bikes provide fast and effiecient delivery.

Bottom: Convenient locations guarantee convenience.

“We work closely with our retail partners for full integration, to enable a seamless customer journey from the transaction on-site to the handover, and we even bespoke the customer interaction and experience at our stores, so it’s perfectly aligned with your brand.”

He says one of the company’s core values is being innovative. And, by its entrepreneurial nature, he says that it’s also always striving to improve its operations. Over nine years in business, PenguinPickUp has consistently evolved to meet the challenges and demands of the times.

Raising the customer experience bar

Its store formats have evolved from serving customers from shipping containers located on SmartCentre’s properties to a network of standalone stores located within city centres. Locations are found within retail stores and on university campuses. And the company will soon introduce self-serve lockers along transit routes. Today’s stores are fit for purpose, with right-sized backof-house space outfitted with high-capacity modern shelving and inventory management systems.

“Our technology is continuously evolving to ensure we raise the bar on customer experience,” he explains.”We recently introduced a learning management system which trains our associates to provide a consistent customer experience across all locations. We’ve developed training modules specific to retailers to ensure alignment with their operations. Our customer app makes package tracking and updates a breeze. And our enhanced backend system allows for easy API integration and ease of working for our associates.”

Baker goes on to add that the company is solution-oriented and agile, moving and pivoting quickly to meet the demands of customers and partners. That might mean identifying and quickly opening new locations where customer demand is high, or developing a new business vertical such as PenguinPickUp2U, its transport and delivery service, which provides mid-mile

solutions from a retailer’s store or DC to a PenguinPickUp location.

“We are a full-service solution,” he boasts. “A retailer can seamlessly integrate with us and offer their customer the option to choose PenguinPickUp as their collection point during check out. Our drivers will collect those goods from the retailer’s DC or a store and can move them same or next day to the PenguinPickUp location which the customer chose – where they’ll be served by a friendly, engaged associate who will collect the package quickly using our warehouse management system. However, although we want to ensure that we’re taking care of delivery and returns for our retail partners with first rate service and solutions, we also want to make it more economical for them, too.”

Saving costs

Last-mile logistics accounts for more than 50 per cent of delivery costs, Baker explains. Consolidating shipments represents considerable savings to retailers as they move from potentially hundreds of stops to just one. This benefit of consolidation always works on the reverse flow when the customer can drop off their returns at a PenguinPickUp location.

“Delivering to a PenguinPickUp ensures delivery success on the first attempt, versus a home delivery which often experiences one to two failed deliveries, with each one adding to the already high last-mile cost. Consolidating goods, straight from a DC to a PenguinPickUp location, gives a retailer real clarity and control over inventory end-to-end, thus reducing loss. And, consolidating shipments offers significant environmental benefits by removing trucks from the roads, thereby reducing both emissions and congestion in the places we live, work, and play. PenguinPickUp locations can also serve as urban micro-fulfillment hubs allowing retailers to deliver the last-mile from PenguinPickUp to a customer’s home in a zero-emission, right-sized vehicle, or an electric cargo bike.”

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