A unified retail experience for greater performance

A confluence of creativity, innovation, technological advancement, and intuition ae leading to improvements and enhancements across the industry

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, Retail Insider the magazine 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.

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 brick-and-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 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, tope 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?

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 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.

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?

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, 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.

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.

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.

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 our 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.