Retail Insider the magazine Volume 3 Issue 2

How to Win in Retail: Less Science,More Art

Appealing to the consumers’ senses through creativity and artistic engagement. pg. 24

The death of the great Canadian downtown department store

Pg. 16

The Power of an Aligned Brand Story

Creating unforgettable experiences for your customers and employees. pg. 30

Who is Today’s Canadian Consumer?

Exploring the evolving behaviours of the Canadian consumer. pg. 34

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Volume 3 Issue 2: Succeeding in an ever-revolving retail environment

Succeeding within the retail industry is not necessarily something that’s solved or unlocked through a simple equation. Instead, it’s a culmination of a number of different factors and forcing functions that, if executed properly, can place a retailer in a good position. However, given the ever-evolving nature of the retail industry, and the rapidly changing habits and preferences of the consumer, navigating operations and lining up those factors and forcing functions just right can be a challenge. With this in mind, Volume 3 Issue 2 of Retail Insider the magazine touches on a handful of the most critical issues impacting retail performance today.

First, I take a retrospective look back at the glory days of the downtown Canadian department store. Taking you through a brief history of the once mighty urban retail entity, I detail the incredible successes that many department stores enjoyed throughout the twentieth century, while exploring the causes leading to its demise.

We also include an excellent contribution from Doug Stephens concerning what it takes to win in retail. And, according to Stephens, in order to command disproportionate levels of attention in today’s hyper-competitive landscape, a more artistic touch is required from retailers.

fishRecruit’s Miriam Feldman provides her insights concerning the ongoing search by retailersfor top talent, revealing the ways in which an aligned employee brand story can have a powerful impact on business growth and success.

We also examine today’s Canadian consumer who is becoming increasingly more diverse every day, analyzing their varied tastes, preferences, behaviours and attitudes, and ranging perceptions of value.

And, we look ahead to an upcoming exclusive ‘Loss Prevention’ issue of the magazine which will attempt to take a deep dive into the murk of retail shrink, highlighting challenges and hurdles that Asset Protection and Loss Prevention professionals must overcome in order to safeguard their organizations, while introducing a range of technology solutions that can help mitigate retail loss.

As always, I hope you enjoy the content that we’ve developed for this issue of Retail Insider the magazine and look forward to any feedback that you and your teams might have for us.

Sincerely,

Craig Patterson Publisher craig@retail-insider.com

Volume three, Issue two

16 // Retail Trends The death of the great Canadian downtown department store

Department stores were once prominent in North American downtowns. Very few remain open today as downtowns have become devoid of their presence, marking a concerning trend of commercial activity leaving urban cores.

24 // The Art of Retail How to win in retail: less science, more art

Retailers today are faced with the challenge of commanding disproportionate levels of attention when superior selection, convenience and price are dominated by larger players. And, the answer to overcome it lies less in deploying new technology and more in something almost never discussed in retail circles: art.

30 // The Canadian Consumer Understanding the tapestry of today’sdiverse canadian consumer

In today’s hyper-competitive retail landscape, retailers need to sharpen their insights concerning the customers they’re serving to enhance the experiences they offer

38 // The Retail Experience Unlocking the power of an aligned brand story

In the competitive world of retail, attracting and retaining top talent is more crucial than ever. Retailers must strive to meet the expectations of prospective employees who are increasingly selective about where they work. One powerful strategy to achieve this is by aligning your employee brand story with your overall brand narrative. By doing so, you not only attract the right talent but also ensure a cohesive and engaging experience for both employees and customers.

EDITOR-IN-CHIEF

Sean

GRAPHIC DESIGN GBC

CONTRIBUTORS

Michelle Auger, Miriam Feldman, Shelby Hautala, Kelly Higginson, George Minakakis, Jocelyn Rhindress, Stephen O’Keefe

HEAD

SALES AND SPONSORSHIP

Darryl Julott

darryl@retail-insider.com

EDITORIAL OFFICE

100 Bloor Street West, Toronto, ON, M5S 3L3 Retail Insider the magazine is published four times each year by Retail Insider Media Ltd.

Digital concerns

In SOTI’s recently released Techspectations: Consumer Demand for Digital Transformation in Retail report indiciates that while many consumers see the advantages and benefits that result from the use of technology, there are p[rivacy concerns that remain.

43% believe that technologies can enhance shopping convenience and speed

CEOs’ appetite for transformation

As global economies continue to grapple with challenges related to the recovery and rejuvenation of sectors, it seems that business transformation remains a top priority of Canadian CEOs. In fact, according to results from a recent global EY survey, a majority of the country’s leaders are committed to it, and will actively seek the following opportunities over the course of the next 12 months:

78% express concerns related to the security of their personal data

Consumer perceptions of inflation

Bank of Canada’s first quarter survey of Canadian consumer expectations for 2024 reveals some interesting insights into the perceptions of the average Canadian consumer concerning inflation and the factors that influence their thinking most when it comes to the topic. The following are the most important factors informing their perceptions of inflation:

67%

According to a recently released KPMG International global report, Canada ranks fourth among major retailing countries concerning the development and implementation of omnichannel solutions in efforts to satisfy growing digital consumer behaviour. Despite this, however, the report also found that an overwhelming 67 per cent of Canadian consumers still prefer to do their shopping in-store rather than online. Further, it’s a trend that mirrors the narrative in the United States where 70 per cent of total retail sales are being generated from brick-and-mortar locations across the country.

In-store shopping still preferred by Canadians Canadian consumer spending intentions

A new report developed by investment banking company , Stifel, indicates that Canadian consumer spending intentions are showing signs of improvement. Among other positive findings, the quarterly report, which surveys Canadian spending intentions over the coming 12 month period, reveals that many categories across the retail landscape appear to be benefitting. However, the report is quick to point out that while consumer spending intentions may be boucning back slightly, they are still in a state of contraction.

48%

expect their spending on discretionary items to increase

14%

are very likely to increase their discretionary spending

52% 54%

are likely to reduce their discretionary spending

74%

are likely to buy discount private label contact lenses

expect their spending on toys to increase, with 15% very likely to increase

The rise of generative AI

54%

expect their spending on apparel and clothing to increase

A recently released report from Salesforce and the Retail AI Council reveals that global retailers are eager to adopt generative AI to personalize and improve in-store and online shopping experiences that are much more tech-enabled.

36% believe their employees are already using generative AI

93% of organizations surveyed are already leveraging generative AI to personalize experiences

81% of retail organizations have a dedicated AI budget

13% of consumers surveyed completely trust companies to use AI

Investing in people: how employee development could be a solution to labour shortages

Addressing one of the biggest challenges impacting small business success by investing in those who help support it

// By Jocelyn Rhindress, Senior Manager of Business Resources, National & Atlantic Region, Canadian Federation of Independent Business

One of the biggest problems that small business owners face today is shortage of labour: finding and keeping good workers can be a challenge. Over half (55%) of small business owners have indicated that labour shortages have had a severe impact on their ability to run their business. Retail businesses are not immune, as of February 2024, over 45,000 retail jobs remained vacant. We are in a tight labour market and employees have choices. There is an assumption that increasing wages will be an easy fix to this problem, but that isn’t always true. In fact, only 22 per cent of small business owners who increased wages found it to be an effective way to fill open positions.

So, what are employees looking for?

Aside from fair compensation, today’s employees are motivated by things like flexibility, a healthy work-life balance, purpose-driven work, career development opportunities, and positive company culture (to name a few). These are things that businesses have significant control over and many of them can be done at minimal cost.

Investing in your employees

Employee development is something that can create long-lasting relationships, benefiting both

the employer and employees. Training and development lead to improved skills and knowledge, increasing efficiency, overall work quality, and retention. Employees generally report greater work satisfaction knowing their employer appreciates their value by investing in their skills. Growing employees will also help identify future leaders by revealing those who are motivated to continuously learn and adapt to changes as they come.

It doesn’t need to be complicated

Business owners are experts in their field, and there is no one better to uniquely share knowledge and skillsets with employees. These learning opportunities can be in-house and be an extension of the owner’s expertise. But the owner doesn’t need to be the only one involved. Another great opportunity for employee development is a peer mentorship program. Peer-to-peer learning allows more experienced and skilled employees to share their knowledge with newer employees. This can serve as not only a leadership opportunity for the mentor and a great growth opportunity for the mentee; but it also becomes an opportunity for the mentee to teach

new perspectives to the longer tenured employee. As retailers, there are areas in which you can invest in training that will benefit both the business and the employee. Consider product knowledge training to help the employee understand the products and services, including origins, special features and unique selling opportunities, teaching different sales strategies, and sharing how to best engage with customers. And, don’t forget the importance of technology training on retail software, including POS systems, inventory management, and other online platforms.

Investing in employee development is a great way to reduce skill gaps, improve risk management, and create innovations. It can forward health and safety protocols, reinforce company policies, improve wellness in the workplace, and build a positive company culture. Employee development also creates a regular touchpoint to ensure performance management is on the right track in order to guide the employee’s future within the company.

How to get started:

Communication is key. Implementing a regular employee evaluation process to communicate your expectations helps the employee focus on growth and understand how they are doing. This is not for discipline; this is a process to help formalize where the employee has been, where the employee is now, and where you would like to see them grow. The review should be done at least annually, but you could do this quarterly or every six months. It is an opportunity to set goals, record milestones and achievements, and keep the focus on growth and development. For this process, allow the employees to participate in setting their goals and evaluating their own performance, with you providing feedback.

Final thoughts:

Employee development doesn’t have to involve expensive courses and seminars. It can be comprised of in-house learning, peer-to-peer men-

toring, and learning opportunities through the expertise you already have. Employees want to feel appreciated, respected, and have a passion for what they do. Helping them grow their skillset and knowledge shows that they are valued by the company. That, along with a “great job” and “thank you” will help cement the relationship between today’s employees and your workplace.

CFIB’s HR Now! for small business™ has knowledgeable Business Advisors who provide customized advice on all employee challenges from hiring through to termination - The right advice at the right time to make the right difference. Visit cfib.ca/hrnow or call 1-833-568-2342 to learn more.

Jocelyn Rhindress is the Senior Manager of Business Resources, National & Atlantic Region at the Canadian Federation of Independent Business (CFIB), Canada’s largest association of small and medium-sized businesses with 97,000 members across every industry and region, 22,000 of whom are operating in retail.

Mastering operational execution: the three levels every retailer needs to thrive in the AI era

Harnessing the power of AI to seeinto the future offers retailers a whole new world of promise and potential

// By George Minakakis, Founder and CEO of Inception Retail Group, and Author of ‘TheNewBricks&MortarFutureProofingRetail‘

Be bold and harness the power of AI in operational execution. AI cannot only learn from historical data but also anticipate market trends, understand consumer behaviour before it happens, and make decisions that position your brand ahead of the competition. In the high-stakes world of retail, where every misstep can lead to significant losses, the ability to move beyond the constraints of hindsight, reactive decision-making and missed opportunities, and instead leverage proactive foresight, isn’t just advantageous, it can be ground-breaking. This is the promise of mastering operational execution in the age of AI.

Whether retailers use AI to develop real-time advertising responses to customer queries, virtual shopping assistants, seamless omnichannel integration, AI-powered training and support, or AI-facilitated employee-customer engagement programs, operational execution is imperative to create collaborative efforts between the home office, retail staff, and customers, whether in person or a virtual state.

As someone who has led retail chains, I can tell you there are a lot of good ideas out there, but you can’t stick wings on all of them and hope they’ll fly. The best brands know that once you get past the whys and what’s of your strategic choices, it comes down to the how. Quite often, this is where ideas either take root or fail.

Retailing is, in essence, about operational execution. Even the best-laid plans can lead to ruin without the ability to execute flawlessly. In today’s competitive retail landscape, success hinges on more than just selling products; it requires a strategic alignment on critical initiatives supporting goals and objectives around the consumer, the in-store experience, and employee development. When these initiatives are executed effectively, they create a robust framework that drives brand growth, customer loyalty, and financial performance.

To meet these objectives with strong operational execution, here are three levels to build that foundation. Level 1 focuses on efficiency and consistency, Level 2 emphasizes agility and responsiveness, and Level 3 is about innovation and continuous improvement.

Level 1: efficiency and consistency

While standardized processes might not be popular, retailers must be structured and disciplined from the moment strategic choices are identified to their delivery - a monumental equation in operational execution.

Standardizationofprocesses:Standardized processes are essential for consistency, ensuring that every aspect of the customer experience is predictable and reliable.

Automationofroutinetasks:Automate as many routine tasks as possible, allowing staff to focus on delivering excellent customer experiences and developing their skills. Eliminating non-productive tasks enables employees to engage with customers, increasing sales.

Performancemonitoring:Peter Drucker famously said, “What gets measured gets managed.” This principle is crucial in operational execution. Without measuring processes and tactics with data, it’s difficult to improve anything.

Level 2: agility and responsiveness

Brands need to respond quickly and effectively to challenges. The rapid transition to AI necessitates real-time data collection and analytics to gain insights into operational performance.

Real-time data and predictive analytics: Using predictive analytics to anticipate issues and opportunities is vital to agililty and responsiveness.

Flexibleprocesses:Critical processes should be adaptable to support adjustments that improve customer experiences. Implementing agile methodologies allows for quick adaptations and iterative improvements.

Proactiveproblemsolving:Implement problem-solving teams from the home office to the front lines. The entire brand team is responsible for looking for cause and effect in every aspect of sales and service.

Level 3: innovation and continuous improvement

The highest level of operational execution focuses on continuous and measurable improvements. That means everything that comes into contact with customers and staff.

Vision-driveninclusiveculture:Create work environments where diverse perspectives can be heard and evaluated. Involving frontline employees in the change process is crucial for evolution and buy-in.

Continuouslearninganddevelopment:Invest in ongoing training and development programs to keep employees’ skills and knowledge current. Developing talent from within ensures a longterm connection to the brand.

Integrationofadvancedtechnologies:Embrace the industrialization of human and artificial intelligence to develop and deliver next-generation strategies and innovations that will lead the marketplace.

EmotionalAIforcustomerengagement:Introduce AI that analyze customer emotions and tailor interactions accordingly, creating more empathetic and effective customer engagement.

CollaborativeAItools:Implement AI-driven tools that facilitate communication and collaboration between home office and retail staff, ensuring seamless communication and alignment across all levels of the organization.

Fostering innovation

As we strive to retain and gain more customers through enhanced customer experiences, training, and developing talent, we must provide all the resources needed to foster innovation. While AI, data, and machine learning are powerful, they offer no guarantee of competitive advantage. It is the human ability to create the right offerings, experiences, and innovations with sound operational execution that will ultimately yield the most significant results.

George Minakakis is the CEO of Inception Retail Group, author of three books, and keynote speaker.

Shaping Canadian retail through consumer trends: insights from RCCSTORE24

Canada’s annual retail conference showcased a lineup of incredible speakers and content, cutting through the most significant issues impacting the industry today

// Special from Retail Council of Canada

RCC’s STORE24 Conference, held on May 28-29, 2024, at the Toronto Congress Centre, was a pivotal event for Canadian retail. It brought together trailblazing ideas and innovative strategies aimed at tackling ever-evolving retail and consumer trends. From pioneering sustainability initiatives to embracing diversity and leveraging advanced technologies, the conference provided a roadmap for the future of the retail industry. Thought-provoking presentations and transformative insights set the stage for what’s next in retail.

Key insights explored

Michèle Boudria, CEO of McDonald’s Restaurants of Canada, kicked off the conference by advocating for sustainable technology integration and fostering community partnerships to meet consumers’ wants and needs. Her insights resonated well with the growing consumer preference for locally sourced and eco-conscious products and set the tone for a conference that explored cutting-edge strategies and transformative insights shaping the future of retail.

Eric Morris (Google Canada) and Matthew Kropp (Boston Consulting Group) discussed the potential of generative AI in reshaping retail operations, promising more personalized data-driven shopping experiences for consumers.

Michael E. LeBlanc and Diana Dimitian emphasized the need for agile decision-making amidst industry disruptions, reflecting consumer expectations for brands to innovate proactively and delight.

Catherine O’Brien (Nestlé Canada) led a discussion on environmental sustainability, with Kimi Walker (Canadian Tire Corporation), Derrick Emsley (Tentree) and Maya Colombani (L’Oreal Canada) highlighting a growing consumer trend towards eco-friendly shopping and the increasing pressure on businesses to adopt sustainable practices.

Selwyn Crittendon, CEO of IKEA Canada, underscored the importance of authenticity and community impact, echoing consumer preferences for transparent and socially responsible brands.

Thomas Haupt (Sephora Canada) stressed the role of diversity in driving retail success, emphasizing the increasing consumer and employee demand for inclusive corporate environments.

Jan Kestle (Environics Analytics) outlined the pivotal role that data plays in relation to AI, supporting the delivery of personalized customer experiences, essential in meeting the expectations of today’s discerning shoppers. She also shared data on how the ethnic diversity of Canada is growing.

Peter Hughes (KPMG Canada), Tommaso Brusò (Eataly North America), and Sylvain Michel (Holt Renfrew) discussed the essential nature of omnichannel strategies for brands aiming to deliver seamless customer interactions across digital and physical platforms.

Greg Hicks, CEO of Canadian Tire Corporation, highlighted how the strategic use of data in modernizing retail operations is proving crucial for meeting consumer demands for efficiency and personalized service.

Doug Stephens, the Retail Prophet, challenged traditional retail strategies, urging industry leaders to align with broader societal values and sustainability goals. He highlighted Amazon’s innovative approach with Plug Power in producing green hydrogen, illustrating how environmental stewardship can differentiate brands in a competitive market.

Reflecting on retail’s evolution, Stephens emphasized the need for retailers to contribute value rather than merely extracting it, identifying new pillars - democracy, equitable capitalism, reshoring, sustainability, and education - as critical to consumer trust and brand loyalty, and concluded with:

“I want you to think about what you want. Put your company aside for a moment. We know what they want – they want a good quarter and a good year. But what do you want? What do you want for your family and your children? What do you want for your community? Now imagine that what you want is what everyone in the Canadian industry wants. Imagine that they feel just like you, that they believe that we as an industry can

Top: Doug Stephens presenting at RCCSTORE24 Bottom: Attendees during a main stage session.

not only do better for society, but we can capitalize on that as well. Now imagine if every retailer in the world felt the same way. If that’s the case, I promise you that retail will save humanity.”

Doug Stephens will further explore retail disruption at RCC’s Retail Marketing Conference on September 12, 2024, in downtown Toronto, offering fresh strategic insights for retailers to stay ahead in a rapidly evolving market.

RCCSTORE24 was a catalyst for change in Canadian retail. Attendees left empowered and inspired, ready to innovate and embrace the challenges of tomorrow. For more information on RCCSTORE24 and to join the conversation leading up to STORE25, visit the official conference website.

To learn more about the upcoming RCC Retail Marketing Conference on September 12, 2024, visit rccretailmarketing.ca/agenda.

Photos by Wade Muir

Lowered EI premiums to boost Canadian consumer confidence

As restaurants across the country continue to struggle with post-pandemic challenges, an exploration of remedies to help rejuvenate the foodservice industry is much-needed

// By Kelly Higginson, President and CEO of Restaurants Canada

Restaurants are fundamental to any thriving neighbourhood. They drive and support tourism, build community and significantly contribute to the economy. In Canada, restaurants play a crucial role beyond nourishing us; they are a cornerstone of a community’s financial wellbeing. As the fourth-largest private sector employer, restaurants contribute significantly, generating over $114 billion in sales and providing jobs for over one million Canadians, nearly 20 per cent (19.6%) of whom are youth and young adults.

However, the profitability of restaurants has been severely impacted by inflationary pressures affecting Canadians nationwide. Operating costs have dramatically risen over the past several years, exacerbated by the challenges following the COVID-19 pandemic. Many restaurants are still burdened with debt and struggling in a high-cost environment. From 2019 to 2024, bankruptcies among restaurants, accommodations, construction, and retail in the country nearly doubled. According to the Superintendent of Bankruptcy, in the first quarter of 2024, there were 804 bankruptcies amongst these industries, compared to 420 in Q1 of 2019. Given these challenges, how can Canada protect the future of our food service industry, its importance to communities, jobs and the economy?

A report by Ian Lee, PhD, titled “On the Precipice – Help is Needed” offers a solution. In it, Lee delves into the overwhelming impacts that Employment Insurance Premiums (EI) have on small businesses. The report highlights how higher EI Premiums present an additional financial challenge to an already struggling industry that is plagued by an affordability crisis. It calls on the federal government to recognize and address the escalating costs related to running a small business. The report reveals that lowering the EI premium would provide immediate and tangible relief to small businesses and their employees. As the national representative of Canada’s restaurant and foodservice industry, Restaurants Canada shares Lee’s concerns, and has publicly urged the federal government to reduce EI Premiums from 1.66 per cent to 1.58 per cent.

In Canada, consumer confidence levels are low, which suggests that Canadians are not optimistic about their future finances and job prospects. When large industries like the restaurant industry suffer, it creates a ripple effect far beyond their doors; it impacts suppliers, local economies, communities, and countless employees - espe-

cially youth and newcomers. Lower EI Premiums represent a realistic and targeted opportunity for the government to provide relief and channel more funds into the hands of young workers..

By virtue of EI premiums being paid on payroll, labour intensive small businesses such as restaurants would feel the relief immediately. In a restaurant, it takes 12 employees to generate 1 million dollars in revenue versus a retail store that requires only 3 people. It is a simple policy decision that would provide much needed cost relief for both employers and employees. Many operators have affirmed that any payroll tax relief provided by the government will be redirected back into their workforce, be it through enhanced wages or increased hiring. Not only would it put money back in the pockets of employers and employees, but it would also boost consumer confidence.

It is a move that has been made before. In 2013 and 2014, the federal government froze EI Pre-

miums for two years to stimulate job growth. During the 2015 election, two political parties promised to reduce EI Premiums, while a third suggested freezing them. In 2020, the federal government made the decision to freeze EI Premiums at the rate of 1.58 per cent for two years to ensure that Canadian businesses and their workers would not face increases to costs and payroll deductions due to the COVID-19 pandemic.

By once again reducing EI Premiums to 1.58 per cent, the federal government would help not only businesses, but their employees and all taxpayers, too. This is not just a prudent approach, but an essential one that offers an immediate way to grow Canadians’ confidence in our economy.

Kelly Higginson is an experienced leader with more than 25 years working within the hospitality industry, serving as President and CEO of Restaurants Canada.

Smart immigration policies offer a win-win solution by alleviating labour shortages and providing newcomers with valuable Canadian workforce experience. Learn more at www.restaurantscanada.org or scan the QR code.

The death of the great Canadian downtown department

Large department stores were once prominent in downtowns in North America, today. In Canada, downtowns are becoming devoid of department stores concerning trend of commercial activity leaving urban cores. //

Canadian department store

America, and very few remain open stores following closures, marking a // By

Craig Patterson

Even though there are still a handful of downtown department stores operating in Canada, the era of the great downtown department store in North America for the most part is over. It happened gradually over the decades as retail changed and suburban malls took hold, while downtowns shifted away from being the main attraction in Canadian cities. With closures came the loss of the glitz and glamour of the downtown department store, which characterized Canadian downtowns for decades as centres of both commerce and entertainment.

Canadian department store origins

Toronto and Montreal were home to some of the first truly big downtown stores, with Toronto being the headquarters for the Eaton’s and Simpsons department store chains and Montreal being home to department store retailers Henry Morgan, Ogilvy’s and Dupuis Freres. Winnipeg was home to the flagship and headquarters of the Hudson’s Bay Company for decades, while Vancouver was the headquarters for the Woodward’s and Spencer’s department store chains. With

these came large and sometimes lavish multi-level flagship stores, carrying a wide range of products as well as restaurants and services that built tremendous customer loyalty while becoming an integral part of the community.

Earlier offering

In the earlier years, department stores operated in massive buildings carrying products ranging from fashions to fabrics, to home goods and various food items, sometimes including groceries. Merchandising and the overall look of the store were particularly important in the earlier decades, as was offering exceptional customer service both in the store and even when offering such services as home delivery. Department stores became important parts of people’s lives as well, with top-of-mind awareness due to such activities as hosting parades, fashion shows and other sponsored events, as well as strong marketing that in some cases included catalogues to order products.

Restaurants were also an important component to the downtown department store in decades past, with such iconic restaurants as Eaton’s Round Room in Toronto (now the Carlu), Le 9 in the former Eaton’s in downtown Montreal, the Arcadian Court at Simpsons in Toronto, and various other restaurants found in stores across the country. Restaurants provided a gathering place

particularly for women, in a social space that created community as well as a place to use a washroom — a challenge with some of the structured dresses women wore in the earlier 1900’s.

A special outing

Going downtown to shop used to be a special occasion — women might have worn gloves and a hat and would visit the downtown department store to shop as well as to socialize and eat. Sometimes the entire family would go downtown depending on the occasion, and Christmas Window displays were something to marvel over. In-store events were also a draw and brought shoppers back repeatedly — this was at a time before the internet and social media, when it was easier to get people’s attention and to entertain them. Department stores thus thrived as both entertainment centres and centres for commerce, with downtown department store sales in Canada rivalling the biggest stores globally into the 1950’s.

Eaton’s

Eaton’s was the grandest of the Canadian department store chains for decades, and the company also saw substantial retail sales that saw it become the eighth largest retailer in the world by 1940. In 1930, about 58 per cent of all department store sales in Canada were at Eaton’s

Left to Right: Hudson’s Bay store, Vancouver (c. 1926); Eatons, Winnipeg; Simpsons, Toronto (c. 1973); Eatons, Toronto (c. 1975)

(either in-store or through catalogue sales), about 7 per cent of all retail sales in the country that year. Eaton’s, through its downtown stores and mail-order business, attracted a wide Canadian demographic that ranged from urban dwellers with money to middle-class workers in smaller communities and lower-income farmers.

The Eaton’s chain opened a network of stores across Canada, including substantial downtown flagships — Toronto was home to the 1.6 million square foot Eaton’s store on Queen Street and Yonge that was demolished in 1977, and its sister store on College Street that had in the 1920’s been earmarked to become the biggest store in the world. Eaton’s opened a million square foot store in downtown Montreal in the early 1900’s, as well as large stores in Winnipeg, Calgary, Edmonton, and Vancouver. It should be noted that many other Canadian downtowns also had Eaton’s stores, ranging from smaller flagship formats in cities such as Saskatoon, to smaller-format downtown stores in cities such as Moose Jaw, Saskatchewan.

Simpsons

Simpsons also operated a massive store on Queen Street in Toronto, and the company expanded in the early 1900’s to include having stores in Montreal, Ottawa, London, Halifax and Regina — Simpsons catered to the carriage trade in the

earlier 1900’s in Toronto and continued to offer upscale women’s fashions to its customers in its St. Regis Room/Salon Vendome departments in its stores, even in the suburbs as it expanded in the 1960’s and 70’s.

Henry Morgan

The Henry Morgan department store in downtown Montreal was the largest store in Canada in 1870 — the store eventually relocated to present-day Ste-Catherine Street where it opened a store called Colonial House that was expanded to the present-day massive building that still stands to this day. Like Simpsons, Morgan’s catered to a more affluent client and had a downtown Montreal store as well as a store on Bloor Street in Toronto in the 1950’s, while it began opening suburban stores before being taken over and rebranded by Hudson’s Bay in 1972.

Woodward’s

Woodward’s in Vancouver expanded over the years to become a massive store on West Hastings Street, in a 700,000 square foot building that even had a peanut butter factory on the roof. Woodward’s opened a large downtown Edmonton store in the 1920’s and a handful of other downtown locations, though its expansion didn’t pick up until the 1960’s and 70s when suburban shopping centres were being built.

Eatons on Yonge Street in Toronto decked out for the Coronation of Queen Elizabethh II in 1953.

The

Hudson’s Bay Company

The Hudson’s Bay Company took over and rebranded the Woodward’s chain after its bankruptcy in 1991 — Hudson’s Bay was becoming the dominant department store chain in Canada at the time, as Eaton’s began to retract and lose market share after the closure of its catalogue business, and a recession that resulted in less funds to invest in stores. In the early 1900’s, Hudson’s Bay had grand downtown stores in Winnipeg, Calgary, Edmonton, Vancouver, and Victoria, as well as various other downtown stores in markets such as Saskatoon and Regina.

As retail began to shift significantly in the 1990’s after a recession, the Hudson’s Bay Company’s acquisition of Woodward’s and rebranding of Simpsons created a retail powerhouse that became even stronger with the demise of Eaton’s in 1999. Sears Canada attempted to revive the Eaton’s chain before converting those stores to large downtown Sears locations, which lacked the magic of department stores of decades past. Sears Canada itself closed shop in 2018, leaving Hudson’s Bay as the last traditional department store standing in Canada.

Cause of death

The death of the downtown department store can be attributed to a variety of factors, including the retailers themselves as well as suburbanization and competition impacting downtown retail. Since WW2, the development of highways and suburbs, along with the increased use of cars and the development of suburban shopping centres, have contributed to the demise of the commercial viability of downtowns and their department stores. Increased competition from big-box retailers, discounters, speciality retailers, brands selling direct-to-consumer, shopping centres and the internet have all impacted department stores as well, downtown or otherwise.

Since the beginning of the Covid-19 pandemic, Hudson’s Bay has shut three of its downtown stores in Canada — that includes the iconic

675,000 square foot downtown Winnipeg flagship, as well as a downtown Edmonton store and a store at the Yonge and Bloor intersection in Toronto. The downtown Winnipeg and Edmonton Bay closures could be seen as particularly devastating — at one time downtown Winnipeg was home to massive Eaton’s and Bay department stores that sold millions annually, as well as Holt Renfrew. Now, all are gone. The same can be said for downtown Edmonton, which once had Woodward’s, Bay and Eaton’s stores as well as Holt Renfrew — now Edmonton’s downtown core struggles with any retail vitality, resembling something one might see in the United States with no downtown department stores and little foot traffic whatsoever.

Downtown Regina will be the next city to lose its downtown Hudson’s Bay store, which will be closing in April 2025. While one might not see the loss of a 180,000 square foot store as a big deal, the end of Hudson’s Bay in the city marks the end of well over 100 years of department store history — the downtown core was once home to Simpson’s, Eaton’s, Army & Navy, Hudson’s Bay and Sears, and by next year there will be zero department stores in the city’s

The death of the downtown department store can be attributed to a variety of different factors, including the retailers themselves, as well as suburbanization and other forms of competition impacting downtown retail.

The glamour of department store glory years is gone with Hudson’s Bay - most of its stores are in terrible shape, and a shocking lack of investment has led to a situation where Bay stores , even in downtown cores, have non-functioning escalators, evelators, and no centralized music.

core. It’s a story being played out across Canada as department stores shuttered in years past, and now the future of Hudson’s Bay’s remaining downtown stores in Canada are in question.

The glamour of department store glory years is gone with Hudson’s Bay — most of its stores are in terrible shape, and a shocking lack of investment (as well as various periods of not paying vendors) has led to a situation where Bay stores, even in downtown cores, have non-functioning escalators, elevators, and no centralized music. In the spring and summer of 2024, many Hudson’s Bay stores were forced to close due to hot temperatures. Sources said it’s because HVAC supplier bills were not being paid.

That means that the magic and the experience of the downtown department store is for the most part a thing of the past in Canada — Hudson’s Bay’s downtown Toronto store on Queen Street, once the grand flagship of Simpsons, might install moving window displays for Christmas. But the overall retail experience at the store lacks

The Simpsons Regis Room in Toronto

the customer service, restaurants, the interesting merchandise, events, services, marketing, and entertaining experiences that made department stores of the past busy places — and it’s no longer a place for kids to sit on Santa’s lap in December. It’s in stark contrast to the flashy department stores in places like London, Paris and Seoul, which are highly experiential and do incredibly high sales numbers.

Thus, overseas is where one might have to go to find an example of a “great downtown department store”. These stores usually exist in large cities, with cores characterized by a high density of spending power including tourists and residents. They may be one-off stores, or one of a handful of locations — think Harrod’s and Selfridge’s in London, Galeries Lafayette and Le Bon Marché in Paris, Ka De We in Berlin, and others. Cities in Asia also have some very strong stores, including in South Korea where a flagship Lotte or Shinsegae might see sales exceeding a billion dollars annually. Japan is also legendary for its department stores, which still thrive in urban areas along major subway lines. And China is looking to the future with department stores that aim to be relevant in many aspects of customers’ lives via use of tech.

One might not technically have to cross a body of water if flying to Mexico City, however, to experience a great department store. El Palacio de Hierro, which has its 650,000 square foot flagship store in Mexico City’s Polanco area, is a spectacular example of an upscale department store, the likes that a Canadian city could only dream of at this point. The architecturally attractive El Palacio de Hierro building features stunning interiors, interesting product, customer service, food and beverage options, a food hall, and an overall experience certainly not found at Hudson’s Bay. And one hopes that this isn’t the end of Hudson’s Bay, or at least Hudson’s Bay’s downtown Canadian department stores. Already, the historic downtown Calgary flagship location has been downsized to about half of its previous 400,000 square foot size. Given the news of the downtown Regi-

na closure, one might speculate that the downtown Saskatoon Bay store’s days could be numbered as well. Hudson’s Bay recently attempted to block heritage designation of its downtown Ottawa store, possibly signalling intentions of redevelopment. And office redevelopment plans are already in place for the downtown Montreal and Vancouver Hudson’s Bay flagship stores, though both projects appear to have stalled, and a source says that new plans are being drawn up for the Vancouver flagship building’s redevelopment.

Constant change

One consistent thing about retail is that it is constantly changing, particularly with an acceleration of consumer adoption of digital technologies and AI usage. Consumers are shifting spending patterns and forming new habits as the traditional North American department store languishes. Large-format stores such as La Maison Simons will continue to attract shoppers for years to come with good customer service, interesting product, and attractive stores — the same could be said for Holt Renfrew, though both are more fashion retailers.

Hudson’s Bay is the last traditional Canadian department store standing, and the next couple of years will be critical for it to create a new strategy while investing in operations and infrastructure improvements. It’s more critical than many realize, as consumers develop new consumption habits while the Hudson’s Bay chain slides into irrelevancy. There’s a threat that Canada could be left without a traditional department store, downtown or otherwise, if Hudson’s Bay fails.

Those old enough to remember the great North American downtown department store may still have fond memories of what once was – at a time when it could be more relevant than ever as a comprehensive commercial and entertainment destination. One can still travel abroad to experience such retail, begging the question whether or not such stores could ever operate successfully again in Canada or the United States.

// By Doug Stephens

Overthe last 20 years, technology has transformed retail. Mobile phones have become essential conduits for communication, entertainment and commerce. Technologies like augmented reality, once a novelty, have become commonplace digital merchandising and selling tools. E-commerce, which in 2003 amounted to a rounding error on most retailers’ profit and loss statements, has become table stakes for any business wishing to survive.

But the shift is bigger than consumer-facing innovations. Amazon, once a profitless aggravation for traditional retailers, has become one of the most valuable companies in history by leaning into the behind-the-scenes science of retail: the physics, math, engineering and data of moving goods from production to consumption. And it’s not alone.

Today, we sit on the edge of yet another technology revolution in retail, with investment by retailers in AI and machine learning projected to increase up to eight-fold by 2032.

Image courtesy of Trifonov_Evgeniy

Yet, despite all the investment in technological progress, too many retailers today struggle to stay afloat, grinding it out each day, one promotion at a time. Because, while technology has advanced the mechanics of retail, it’s also opened the door to something else: a historic explosion in new competitors to traditional retailers - from third-party marketplaces and direct sellers to Asian discounters and social media influencers - all of which are now battling it out for finite, fleeting and increasingly fragmented slivers of consumer attention.

Indeed, the existential challenge facing most retailers today is how to command disproportionate levels of attention. And how to do this when superior selection, convenience and price have largely become the domain of large international marketplaces and mega-chains, and digital advertising is relentlessly more expensive while declining in its effectiveness?

For young consumers in particular, shopping and entertainment are merging and if retailers want to generate disproportionate levels of attention and recall, while giving shoppers the ‘entertainment ‘ they want, they need to begin thinking less like retailers and more like artists.

The answer lies less in deploying new technology and more in something almost never discussed in retail circles: art. Because, as it turns out, attracting attention and promoting recall are what art does best. In fact, a growing body of scientific evidence suggests that art, regardless of form, has a uniquely stimulating effect on our brains.

According to Daniel J. Levitin, author of “This is Your Brain on Music: The Science of Human Obsession,” listening to a favourite song or a familiar style of music lights up almost every region of our brain, including areas linked to memory. Experiencing art has been proven to boost blood supply to the brain, producing rushes of dopamine and activating both cognitive and emotional activity.

Most importantly, consumers are looking to retail to play a more artistic role in their lives. In a recent study, BoF Insights found that a majority of Gen-Z shoppers in the US described fashion as their favourite “entertainment category” to spend money on, outranking other categories like dining, video games and music. They refer to retail not as commerce or shopping, but as “entertainment.”

For young consumers in particular, shopping and entertainment are merging and if retailers want to generate disproportionate levels of attention and recall, while giving shoppers the “entertainment” they want, they need to begin thinking less like retailers and more like artists.

It starts with a story

So, what is it about art that our brains love so much and how can retailers tap into it to garner outsized levels of attention? Research suggests there are two keys.

The first key is understanding that art is a vehicle for storytelling.

Stories have played a vital role in human development since the dawn of civilization. From

Dyson’s artistic marketing of its vacuums have paid dividends for the company.

Image courtesy of Dyson

Greek mythology to nursery rhymes, from books to film, stories are an intrinsically human vehicle for communication, socialization and learning. In fact, a study by the London School of Business found that when dry factual data is expressed through a story, readers are likely to remember almost 60 per cent more than if the same set of facts were simply listed as such.

Stories that are told through art also contribute real value to our lives. The protest songs of the 1960’s incited action against the Vietnam war, promoted community and invited a sense of belonging. Musical films of the 1940’s offered moviegoers distraction and relief from the horrors of WWII. Documentary films enhance our understanding of history, society and world events. And, of course, art can push the boundaries of design, birthing new aesthetics and unique functionality.

Done properly, retail can serve the same important human needs and there are worthy emulators to follow.

Patagonia, for example, puts a story of environmental activism at its core, inciting their values-based community of consumers to act against climate change. US toy store chain Camp builds themed stories into beautifully crafted entertainment experiences for families, while selling toys in the process. New York based B&H Photo and Video has spent over 50 years telling a story of superior expertise, informing and enlightening customers on the subject of photography and film, becoming world-renowned in the process. And Dyson has never wavered from its story of superior engineering and design, turning mundane items like vacuums and hair dryers into status symbols and functional forms of art. When we buy from these kinds of brands, we’re not just buying a product. We’re also buying in to their story. And it is four areas - culture, entertainment, expertise and design - that offer strong, ownable footholds from which brands and retailers can successfully compete, without attempting to out-compete Amazon and others on price, convenience or selection.

From products to productions

But a brand story cannot simply be a platitude or vague idea buried somewhere in the company’s mission statement. It must, like a production, come to life for consumers across their experience. For Patagonia, this means telling the story of environmental activism, every day, in varied ways, at every touchpoint along the consumer journey, from their website content and ad media through to the recycled materials used to build their stores and offices; from the fibres used in their garments to the character and values of the people they hire.

Every message, every moment, every person and every experience ladders up to a story about saving the planet. And it’s not just a story. It’s the only story. And it is through their commitment to telling the story, that Patagonia has developed a loyal, global community of customers, coming to the brand, not simply for a product but also for a sense of shared values and community.

Dyson, on the other hand, goes to remarkable lengths to act out their story of the superior design, engineering and beauty of their products. All content, merchandising and messaging, and even their gallery-like stores, belie the mundane nature of their product category, elevating the things they sell (and their prices) into the realm of art. In doing so, they appeal to the powerful human needs for beauty and status.

Despite their obvious differences, both brands have become the cognitive defaults in their categories and have done so by maintaining an obsessive focus on telling their unique stories, stories that link directly to tangible human needs. In doing so, they have set themselves apart from the sea of commodity competition in their categories.

Becoming unforgettable

However, a brand’s job is not simply to be experienced but also to be remembered, offering more reason for retailers to turn to art. Art has been

proven to create deeper, longer-term memories, than other data forms. Perhaps this explains why decades-old song lyrics or movie lines are retained in our cognitive filing cabinets. Art tends to lodge itself deeply into our memories.

The key to unlocking this power comes by first understanding that the human memory is not an unidimensional thing. In fact, we have at least six unique memory inputs. First, roughly 20 per cent of our memory of an experience is generated from visual inputs or our iconic memory, which processes what we see. The remaining 80 per cent is divided between our echoic or sound memory, our olfactory memory, our gustatory or taste memory, our haptic memory to process what we feel, and our cerebellum, which processes the emotions conjured by the experience as a whole. Studies have established the inordinate power that scent has on our physiology. That smelling a rose, for example, activates exponentially more brain activity than simply looking at a photo of a rose. Other research has shown that playing French and German music in a wine store, on alternating days, for example, results in a disproportionate percentage of sales swinging in lockstep to French or German wines, even when shoppers are oblivious to the music that was played during their visit. The influence of involving motor skills to boost memory, cannot be underestimated. Students asked to draw a listed series of words, remembered 175 per cent more of them than a control group asked simply to memorize the list. The more of these memory pathways a retailer unlocks within a given experience, the more unforgettable the experience becomes.

Regrettably, most retailers tend to focus almost exclusively on the visual elements of their customer experience, all but ignoring the other, arguably more powerful sensory inputs. In doing so, they negate 80 per cent of their brand’s opportunity to be remembered. To remedy this, retailers would be wise to ask themselves what a blindfolded shopper would take away from the experience in their stores. What, if anything, would they hear, smell, feel and taste? And how

each of these sensory inputs should support the brand story.

These two things in concert - a meaningful overarching story that’s connected to core human needs, underpinned with sensory and emotional involvement - are more likely to produce disproportionately more information about the experience, forge deeper neural pathways and, thus, create deeper recall within people. This might explain why, according to our research, such retailers also tend to enjoy better than average revenue growth, profit margins, customer loyalty and earned media values.

Rehumanizing retail

As for technology investments, retailers would be astute to consider these costly choices the way any great film, music or stage director might: by prioritizing those technologies that help to tell their unique story more clearly, impactfully and sensorially.

We’ve spent the last 20 years exploring the science of retail. Consequently, retail today is bigger, faster and infinitely more convenient than ever before. But regrettably, in our pursuit of the science of retail we’ve lost much of its humanity. The psychology, physiology and sociology that sits at the centre of why we shop and how it serves our deeper needs as human beings; the stories and experiences that make a brand worthy of attention and recall.

In a world rife with competition, commodity sellers and consumers in search of meaningful experiences, a return to the art of retail may be just what the industry needs.

Doug Stephens is the founder of the global consultancy Retail Prophet and the author of three bestselling books on the future of retail, including the recently released “Resurrecting Retail: The Future of Business in a Post-Pandemic World.”

Understanding the tapestry of today’s diverse Canadian consumer

In today’s hyper-competitive retail landscape, retailers that can sharpen their insights concerning the customers they’re serving will enhance the experiences they offer and differentiate themselves within a crowded market // By Shelby Hautala

Today’s consumer is more diverse than ever before and is changing the Canadian retail landscape – but who are today’s consumers? With varying preferences, behaviours, and technological engagements, understanding consumers is crucial for retailers. Lisa Hutcheson, a retail strategist and managing partner at J.C. Williams Group; Jeff Doucette, the General Manager of Field Agent Canada; Larry Leung, global customer experience leader; and Colleen Martin, Chief Revenue Officer at Caddle, discuss their viewpoints on the modern Canadian consumer,

sharing their different perspectives on consumers including diversity, spending habits, the forgotten ageing population, and how powerful the consumer is when it comes to ratings.

“Chasing value because they have to”

“Consumers are constantly changing, with a significant trend towards value as budgets are tight,” says Doucette. His insights explore the expectations of Canadian consumers, the idea of value, and the demand for high-quality experiences.

courtesy of Syda AndreyPopov

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Doucette says throughout recent years with economic pressures, consumers are looking more towards value, making it a number one priority within purchase decisions. This ongoing financial strain has led consumers to seek out discounts and cost saving opportunities, especially in grocery stores.

“There is an ongoing trend towards value and shoppers moving to that discount grocery shopping experience in particular, where wallets are definitely being stretched and budgets are tight, and people are saving where they can so they can splurge in other areas,” he explains. “People are trying to manage their budgets more carefully. They are often cutting back on discretionary spending in other areas to ensure they can afford the basics. This behaviour is not just limited to low-income households, but is becoming more common across different income levels.”

“Moving to value for different reasons”

Doucette breaks it down into two groups when it comes to saving money: consumers trying to find value to keep their budgets in check for the basics, and consumers who are not struggling, but want to save for travelling and recreational activities.

When going out and spending, Doucette says young consumers are looking for top quality services and products and are for more dining experiences:

“Consumers have the thought of ‘if I am going to be spending money, then I am going to go out and I want it to be a good experience and if not, I might as well just have that experience at home.’ So consumers are chasing value on basics to be able to afford some of the more entertainment options that are out there and want a great experience,” he says.

With the high costs of living, he says middle-aged consumers are facing challenges with stagnant incomes and the cost of living, with a

large part of the population chasing value because their incomes have not grown, but the cost of everything else has. As for older consumers such as boomers, Doucette says they are looking for reliable and high-touch services rather than top end experiences.

“Older consumers appreciate reliable service and are less forgiving of lapses in product availability or customer service,” he says. “They have higher expectations for consistency and quality in their shopping experiences. When they visit a store, they expect to find the products they need in stock and to receive attentive, personlzied services. Any shortcomings in these areas can significantly impact their loyalty and willingness to return to the store. This demographic values the human touch and reliable interactions, making it crucial for retailers to maintain high standards in their in-store experiences.”

Key tip for retailers

As consumers are looking for great value, Doucette advises retailers to use social media, not just for engagement, but to also offer deals.

“You could have exclusive offers for people who follow you on Instagram and really drive some amazing business,” he states. “Social media platforms are powerful tools for creating a direct line of communications with your customers. By leveraging these platforms to provide special promotions and engaging content, retailers can build a loyal following and significantly boost their sales. This kind of targeted engagement not only attracts new customers, but also fosters a sense of community and loyalty among existing ones.”

Consumer empowerment

Today, consumers have more power to hunt for deals, especially through social media.

“Consumers are starting to have more of a voice and people are chasing deals and will broadcast it on social media with ‘hey, this item is on sale at

this retailer.’” he says. “There is a group of people out there that are really focused on helping others get value and these sort of sneaky deals and smart shopping is happening out there in the world.”

This can also have a negative impact on retailers as consumers are not just sharing sales, but also sharing high prices and bad experiences.

“Everybody has their own broadcasting channel in a way right now, which is empowering for the consumer,” he says. “You don’t need to get the attention of CBC to highlight the fact that the number of grams in your bag of frozen carrots is short of what is declared in the bag. But it is a real concern for retailers because that negative product experience, pricing experience, and customer service experience can all blow up quickly.”

To manage issues, retailers need to create an open conversation with consumers and also keep updated with its social media to respond quickly to any complaints – this way, consumers feel they are being heard and respected.

”Health and wellness has become a really big one since Covid-19. People are really taking care of themselves. There is a lot less alcohol consumption and more focus on activities like cold plunging and other wellness trends.”

- Lisa Hutcheson, J.C. Williams Group

“More diverse than ever before”

“The Canadian consumer now, in my mind, is more diverse and more multifaceted than ever before,” says Hutcheson. “You really have to consider the demographic, lifestyle, socio-economic status, and cultural influences. There are so many new immigrants, each bringing their own values and behaviours, which makes it challenging to categorize them neatly.”

Hutcheson takes a look into the complexity of today’s consumer landscape, which she says is influenced by high immigration rates, diverse backgrounds, and various age groups.

Young consumers (Gen Z and Millennials)

Gen Z and Millennials are leaning more towards sustainability, health, and wellness and are purchasing more eco-friendly products and services to align with their values. This demographic is also more tech-savvy and prefers the convenience of online shopping

“Health and wellness has become a really big one since Covid-19,” Hutcheson recognizes. “People are really taking care of themselves. There is a lot less alcohol consumption and more focus on activities like cold plunging and other wellness trends. Certain demographics are doing things like that and we are seeing a significant shift towards products and services that support these healthier lifestyles.”

This demographic is also looking for instant gratification, seamless digital and in-store experiences, and personalization. Hutceshson says this group often prefers experiences rather than goods.

“Experiential purchases, such as travel and dining out, have become more important than material goods,” she asserts. “Younger consumers are prioritizing experiences that create lasting memories over accumulating physical items. This trend is particularly strong among those influ-

enced by social media, where experiences are often shared and valued more than possessions.”

New immigrants

Hutcheson goeson to explain that new immigrants often are seeking products and services aligning to their cultural backgrounds and preferences. This includes specific food items, traditional clothing, and services that help them integrate into Canadian culture. She suggests that retailers can start to build stronger relationships with incoming immigrants by understanding their needs which will foster trust and loyalty.

“The influx of new immigrants has introduced a variety of cultural influences, making it crucial for retailers to adapt and offer products that resonate with these diverse groups,” she says. “Retail-

ers who can effectively meet these unique needs are more likely to succeed in today’s competitive market and to have loyal consumers.”

Strategies for retailers

The one thing most consumers are looking for is personalization. Hutcheson says retailers should be using data and technology to enhance shopping experiences. By offering persoanlzied experiences, understanding consumer preferences, and tailoring offerings, consumer satisfaction and loyalty can be improved.

“Retailers have to get crystal clear on who their customer is and what their product offering entails,” she asserts. “You can’t be all things to all customers. So, understanding and leveraging data to focus on your specific customer can really drive engagement and loyalty. It’s about honing

Image courtesy of Syda AndreyPopov

in on who your specific customer is and what they value most. This targeted approach helps attract the right customers and grow the business.”

She also suggests building a strong social media presence and engagement through these channels is a must as well as integrating online and offline shopping experiences.

“Retailers need to ensure that their online and offline experiences are consistent and seamless,” she points out. “Customers expect to have a cohesive shopping journey with the brands that they shop with, whether they are browsing online or visiting a physical store. This integration makes it easier for them to switch between channels without any friction.”

The forgotten older demographic

“Canada has close to 40 million people and the consumer is more diverse than ever,” says Leung. His insights shed light on the often forgotten older demographic and the unique challenges they face in the modern retail landscape.

“Older consumers grew up in an era where personal service was the norm, and many still expect that level of interaction when they shop,” he says. “They often find modern, technology-driven retail environments challenging and prefer traditional methods. Many older consumers did not grow up with the internet and find it less intuitive. They prefer the reliability of in-store shopping where they can see and touch products.”

As retailers are transitioning to meet the needs of younger consumers, older consumers are finding it difficult, such as the increasing usage of self-service technologies. Leung says that older consumers often find kiosks and self-service checkouts confusing and frustratingand that they miss the personal interaction with staff that they were accustomed to.

Looking at consumers between the ages of 45 to 50, Leung suggests that although they received

internet experience as part of their university educations and are adaptive to digital technologies, some of them would still like to have a personal experience.

“Many of them may not like to be on social media, especially more advanced technologies like TikTok because they didn’t grow up making videos,” he says. “The older you are, the more likely you may not necessarily want an all digital experience – they would really like the physical experience more than ever.”

Different meaning on service – low and high touch

This age group and older also have a different meaning to service, as in many grocery stores there used to be someone who managed the check-out process and even helped out bagging groceries. Along with evolving with what younger consumers are expecting today, retailers must also recognize and balance their strategies to match what older consumers are looking for.

“It’s important for retailers to collect data and know their demographics and then ask themselves whether or not the customer journey for each group that they want to target is being met,” suggests Leung. “For example, an older generation of people may go grocery shopping on a Monday morning. If retailers know that there is consistent behaviour of shopping earlier, then maybe you need more cashiers at that time because those people may not necessarily want to go use a kiosk. They might have a difficult time locating a sticker with a number for produce, or maybe they would have an issue scanning the products and bagging them themselves.”

Leung goes on to explain that many retailers are trying to find a balance between transitioning to digital and keeping old strategies. Leung says that some retailers were too hasty in their attempts to go digital. He says that it’s not a knock on digital, but about using the communication and service of the customer’s choice.

Leung suggests several strategies for retailers to improve their service for older consumers including maintaining a strong in-store presence with staff who can help with a purchase and provide a personalized experience as older consumers value personal interaction and the assurance that comes with talking to a knowledgeable staff member.

Retailers should also consider using hybrid approaches to marketing, combining traditional and digital methods. While moving to digital flyers and promotions can save costs, Leung says that it is also important to ensure that older consumers still receive the information they need in a format they are comfortable with, such as physical flyers or mailed promotions.

Lastly, Leung suggests retailers enhance accessibility on digital platforms to make it easier for older consumers to navigate. This can include larger text sizes and clear navigation to make them easier to use. He says that it’s about making the digital experience as seamless as possible for those who are less familiar with technology.

By addressing these challenges and not jumping on the digital path too quickly, retailers can better serve the older demographic, ensuring they feel valued within the modern retail landscape.

Consumers reviewing more and moving on faster

Martin, who has 25 years of experience in retail, says because consumers have more access to information, they are less loyal to specific retailers.

The use of social media platforms have made it easy for consumers to share their experiences, positive or negative, which can influence other consumers on what and where they purchase.

“Consumers are utilizing digital platforms in different ways, and there is a noticeable shift towards leveraging online reviews and ratings,” says

Martin. “This trend is particularly strong among younger generations who rely heavily on peer reviews to make informed decisions. They trust the opinions of other consumers over traditional advertising, and this influences their purchasing behaviour significantly. The ability to access a vast amount of information quickly means that if they don’t find what they are looking for, or they see a negative review – they are likely to move on to another retailer. This behaviour underscores the decreasing brand loyalty in the current retail landscape.”

She goes on to explain that consumers are even using technology to find better prices elsewhere, such as Amazon. Today, people have the convenience of walking around a grocery store to compare prices and to see reviews quickly.

“People are walking around grocery stores and scanning things with the Amazon app and reading the reviews. And then, if it is even a cent cheaper, they are adding it to cart,” says Martin.

She points out that because ratings have purchasing power, retailers such as Walmart have integrated user-generated content and peer reviews

“People are walking around grocery stores and scanning things with the Amazon app and reading the reviews. And then, if it is even a cent cheaper, they are adding it to cart.”

- Colleen Martin, Caddle

into their in-store displays to enhance the shopping experience.

“Walmart did a great job at their flagship, putting peer review content on the shelf,” she says. “So not only do they see features and benefits rolling on the panel where the pricing is, but also what those top reviews are. So that has had some really great consumer feedback.”

Not only should retailers place reviews in-store, Martin suggests that retailers should also place ratings on flyers.

“Even integrating ratings and reviews on the flyer is critical because if you are looking at a deal and it is only three stars – people are not going to want to buy that item, but if it is four stars or more they most likely will,” she says. “Peer review is absolutely the most critical piece.”

Looking for more personalization

Martin also suggests that younger consumers expect personalized experiences and relevant product recommendations.

“Consumers today are looking for retailers who understand their unique shopping habits,” she asserts. “They are expecting personalized experiences and relevant product recommendations based on their preferences and past purchases. We have seen that younger generations, in particular, want to feel like the retailers know them and can anticipate their needs. They are no longer satisfied with the one-size-fits-all approach and are quick to switch brands if they don’t receive the personazied service they expect.”

Retailers that are able to successfully integrate personalization into both digital and in-store experiences fore their customers are more likely to build a strong, lasting relationship with them. Going forward, Martin believes that the role of AI will transform personalization, perhapswith the help of AI-powered chatbots and shopping assistants.

“Imagine a chatbot that can recommend recipes based on your purchase history, suggest complementary products, and facilitate a seamless one-touch purchase,” she says. “This level of personalization and convenience is where retail is headed. Consumers want these hyper-personalized experiences that save them time and make shopping more efficient. We have seen examples where AI can help someone find a recipe for six people, taking into account dietary preferences and what they already have in their pantry. It is about making the shopping experience not just personalized, but also incredibly convenient and responsive to consumer needs.”

So … who are the modern Canadian consumers?

Today’s Canadian consumer is diverse, technologically advanced, and value-driven. They are seeking personalized shopping experiences that cater to their unique preferences and needs. As Hutcheson, Doucette, Leung, and Martin say, the modern consumer is more informed than ever before and retailers must adapt to offer seamless experiences, engage meaningfully through data-driven insights, and ensure consistently personalized interactions. Understanding and responding to these evolving consumer behaviours, while still remembering traditional services, is crucial for retailers aiming to build loyalty and stay competitive in the dynamic retail landscape.

“Retail is evolving faster than ever, and consumers are leading the charge,” says Martin. “They are seeking meaningful interactions, personalized experiences, and authenticity. Consumers have always had the power, but now, with the vast amount of information at their fingertips, they are more empowered to make informed decisions. Retailers must rise to the challenge to meet informed consumers with personalized, seamless, and engaging experiences. The future of retail hinges on understanding and anticipating customer needs better. The retailers that can meet these demands will not only survive – but will thrive.”

Unlocking the power of an aligned employee brand story

Creating an unforgettable experience for both your customers and employees // By Miriam Feldman, Partner, Retail, fishRecruit

In the competitive world of retail, attracting and retaining top talent is more crucial than ever. Retailers must strive to meet the expectations of prospective employees who are increasingly selective about where they work. One powerful strategy to achieve this is by aligning your employee brand story with your overall brand narrative. By doing so, you not only attract the right talent, but also ensure a cohesive and engaging experience for both employees and customers.

Understanding your employer brand story

Your employer brand story encompasses the unique aspects of your organization that make

it an attractive place to work. This includes the opportunities you offer, the roles available, your company culture, and the rewards and benefits you provide. In essence, it’s the narrative that communicates why someone should want to work for your organization.

Luxury brands, for instance, leverage their brand stories to create a sense of aspiration and exclusivity. They use celebrity endorsements, stunning visuals, and the promise of a glamorous experience to attract customers. Similarly, your employee brand story should reflect the core elements of your brand while highlighting what makes your workplace unique.

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Key elements of your employee brand

Elements of your employee brand story should mirror those of your overall brand, including:

Culture:The environment and ethos within your organization. Is it collaborative, innovative, or driven by excellence?

Rewards:What benefits do you offer? This could range from competitive salaries and health benefits to professional development opportunities and work-life balance.

Purpose:What drives your company? Do you have a mission that resonates with your employees and customers alike?

When these elements align, they create a powerful narrative that resonates with prospective employees.

The power of alignment

Aligning your brand story and your employee brand story is essential for creating a cohesive and attractive narrative. When these stories are in sync, it not only attracts the right talent but also ensures that your employees’ experience aligns with their expectations.

Consider these companies that have successfully aligned their brand and employee brand stories:

HermèsLuxury

Known for its exquisite craftsmanship and luxury products, Hermès extends this narrative to its employees by emphasizing the importance of high-quality service and attention to detail.

Walmart

As a retailer focused on delivering value to customers, Walmart’s employee brand story highlights the importance of efficiency, teamwork, and a customer-centric approach among its team of employees.

Renowned for offering high-quality items in unique sizes, Costco ensures its employees understand the importance of quality and consistency, aligning their roles with the company’s commitment to excellence.

Knix

This company focuses on purpose, ensuring that employees are passionate about the brand’s mission to empower and support their customers.

When a company’s brand story and employee brand story are misaligned, it can lead to confusion and dissatisfaction. Prospective employees may feel misled, resulting in comments like, “this was not what I expected,” or “everyone I spoke with had a different take on what the culture was here.” Such discrepancies can harm your reputation and make it challenging to retain top talent.

Executing an aligned employee brand story

Achieving alignment between your brand story and employee brand story requires intentional effort and strategic execution. Here are key steps to ensure success:

LeadershipAdvocacy:Leaders must champion the narrative, consistently communicating and embodying the company’s values and mission. They should actively participate in building the story of why the company does what it does and ensure that this message permeates throughout the organization.

ClearCommunication:Transparency is vital. Clearly communicate the key elements of your employee brand story through various touchpoints, including job postings, onboarding materials, and internal communications. This helps set accurate expectations and fosters a sense of belonging from the outset.

ConsistentMessaging:Ensure that all communication, both internal and external, aligns with

your brand story. This includes marketing materials, social media presence, and employee testimonials. Consistency builds trust and reinforces your company’s narrative.

AlignedAssessments:From the recruitment process to performance evaluations, ensure that your assessments reflect the values and goals of your brand story. This helps in attracting individuals who align with your company’s ethos and are more likely to thrive in your culture.

EngageYourTeam:Encourage employees to share their experiences and stories, highlighting how they live the brand values in their roles. This can be through internal communication channels, company events, or social media. Authentic stories from current employees can be a powerful tool in attracting like-minded talent.

TrainingandDevelopment:Provide ongoing training and development opportunities that align with your brand values. This not only helps in retaining employees but also ensures they are equipped to contribute effectively to the company’s mission.

FeedbackMechanisms:Implement robust feedback mechanisms to gauge employee satisfaction and areas for improvement. Regularly review and adjust your strategies based on this feedback to ensure ongoing alignment.

Driving long-term success

In today’s competitive retail landscape, a wellaligned employee brand story is a powerful tool for attracting and retaining top talent. By ensuring that your employer brand story aligns with your overall brand narrative, you create a cohesive and compelling message that resonates with prospective employees.

Leadership advocacy, clear communication, consistent messaging, aligned assessments, employee engagement, training, and feedback mechanisms are all essential components in executing an

aligned employee brand story. By focusing on these elements, retailers can build a workforce that not only meets, but exceeds the expectations of prospective employees, driving long-term success for the company.

As you embark on this journey, remember that the most powerful tool you have is clear communication from your team. When your employees can consistently share the elements of your brand story, it creates a unified and compelling narrative that attracts and retains the right talent. Embrace the power of alignment, and watch your organization thrive.

Miriam Feldman has an undergraduate degree in Psychology from York University and an MBA from the Schulich School of Business and is Partner, Retail at fishRecruit. Her passion for retail and delivering superior client experiences drive the work that she does for her retail clients.

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✅ 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

A deep dive into shrink

Upcoming special issue of Retail Insider the magazine examines the range of challenges facing today’s retail Asset Protection/Loss Prevention teams, and the tools and tactics that can help further protect and safeguard their organizations // By

Stephen O’Keefe President, Bottom Line Matters

Over the past few years, Retail Insider the magazine has provided insight into areas of the retail world not commonly known to the public or retail sector at large. Industry leaders will often cite the need for confidentiality to avoid missing out on taking the first step in a retail program or deploying the most advanced technology to serve their customers’ wants and needs.

Occasionally however, all retailers share a common issue requiring collaboration within the guidelines of the regulations set forth in competition law. In light of this, Retail Insider the magazine recently took a deep dive into one of those areas of concern, and the findings are staggering. It is the world known by most as that of Asset Protection or Loss Prevention. And while many may know it as Security, it is much more than that.

The problem with shrink

Shrink is the terminology used to measure the performance of a company’s loss prevention pro-

gram and has been the topic of great debate, even making its way into the U.S. Congress. And so, we wanted to understand at a much deeper level what the background problem is when it comes to shrinkage. What became clear in our research is the fact that the calculation for expressing unknown losses is flawed, to say the least, and may not be a true reflection of the effects criminals have on a store’s financial performance. What we also discovered was that, in some cases, it was over-stated, but in others it was grossly understated.

Whatever way you measure it, the consensus is that crime is costing well over $100 billion a year in North America. And, Retail Insider the magazine has the back story on the formula used to determine shrink, the concerns with validity, and the alternative formulas being used to quantify losses.

The bottom line is - no matter how you calculate it, criminals are active. Some of them are violent. Losses are occurring. Police are not always

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responding. Courts are neglecting their duty. Lawmakers are lagging. And, as a result of this culmination of a lack of proper action, retail profits are suffering.

Technology solutions ecosystem

To help fight the scourge of retail loss resulting from criminal activity, our research also revealed an entire culture of technology and solutions partners collaborating to address the issue with smart systems and artificial intelligence. Consumers are speaking out against the proliferation of brazen thievery, and they are expressing their concern that theft contributes to higher prices at the checkout. In addition, retail employees are nervous about what may occur during their shift when the doors are open to all walks of society, and safety is a real and present concern. To this end, retail Asset Protection and Loss Prevention professionals are “taking back their stores” as one industry leader passionately expressed at a recent conference in front of their peers.

Cause and effect phenomenon

What’s more, Retail Insider the magazine’s deep dive into the world of loss prevention discovered an entire cause and effect phenomenon that has put losses at the highest global level since the inception of recording systems. While it is quite complex and somewhat complicated, we have devoted an entire issue to the topic. For example, the “why” behind the reluctance for law enforcement to prosecute a shoplifter is not simply because they don’t want to. Rather, it stems from a whole series of events, and a generation of band-aid solutions that have all failed to address the root cause of loss. The result, unfortunately, is that shoplifters, or thieves as the industry prefers to label then for fear of diminishing the act of theft, have taken advantage of retailers to source product for personal use or to re-sell and fund other nefarious acts.

But there is some good news. While this is a problem at its pivotal point that requires and

demands action immediately, technology and leadership are addressing the issue. They know the laws to change and are lobbying. They know the deterrent value of impressions of control and are installing them. They know the value of a connected loss prevention ecosystem and are working with suppliers and vendors to ensure that their systems speak to one another. And CEOs know that doing things the same way will get you the same results, and they are making changes and embracing alternatives.

The future of retail protection and prevention

AI is not a recent phenomenon. Retail Insider the magazine has traced the development of machine learning to the heart of loss prevention programs well into the 1980’s with exception-based reporting systems. Today, thefts can trigger silent alarms, notifying management via radio, as well as a CCTV system that will track and record the culprit. Without engaging with the criminal, their entire journey throughout the store is recorded. The front door alarms were activated, and another camera system was used to capture the licence plate information on the get away vehicle. In fact, one retailer is exploring the use of drone technology to follow a suspect vehicle, while another is using tracking within the packaging of high theft goods to “follow the money” and identify the location of merchandise stolen for the purpose of resale. It may seem like a Hollywood production of espionage or cops and robbers. But this type of technological capability and deployment is real. And Retail Insider the magazine will take you behind the scenes to share some of the technological advances that we discovered during our deep dive into the world of retail crime.

Special issue coming soon

Watch for all of this content, and more, in a special Asset Protection/Loss Prevention issue of Retail Insider the magazine this Fall. For industry leaders and retail solutions partners that want to get involved, or for more information about this special issue, check out the media kit here

In the next issue…

• Retail cybersecurity

• The Canadian shopping centre

• Small business

• The future of loyalty

Distributing October 2024

Image courtesy of St. Lawrence Market