On Sept 24/14, at the Pep Supplier Summit in Cincinnati, KMAC was awarded the 2014 Innovation Award. This award is presented to a supplier based on capability innovation, time and cost efficiencies, responsiveness, adaptability and flexibility to work in partnership with Pep to deliver outstanding customer service.
Here’s to hard work that pays off.
Is Retail a Good Business Model?
Are Brick and Mortar Stores dying?
These were some questions posed to leading Canadian retailers at the recent Retail Council of Canada Store 2014 Retail Conference.
Recent press brings to light the perils about the challenging competitive retail landscape in Canada, so why would anyone even want to be in retail in Canada?
RECENT PRESS HEADLINES
Headlines across Canadian media say it all. The retail landscape in evolving, quickly and there is a new competitive reality. The arrival of giant US retailers such as Saks, Target, Nordstrom are pushing Canadian retailers to the limits. Mergers and acquisitions are streamlining the competitive landscape. The growth in ecommerce and online shopping is a market disrupter making it easy and convenient for shoppers so they don’t have to visit a brick and mortar store. There’s pricing pressures as customers aggressively search for the best prices. There’s pressure to create a seamless customer journey converging digital with brick and mortar. Customers are adapting to mobile shopping and expectations from retailers for service and knowledge are at an all time high. Competition is not just other retailers, it’s anyone/anywhere where customers can spend their dollars and customers only have so much money to spend so how does a retailer get that share of wallet?
Forget the Headlines, “It’s Our Time to Lead the World!” Michael Medline recently stated.
A grim scenario? Some think so BUT not Michael Medline , President of Canadian Tire. So how are Canadian retailers surviving? What are they doing to adapt and change to attract customers to their stores to buy? Here’s Michael’s take on the retail environment in Canada and more importantly, what retailers can do to adapt, survive and thrive.
“The Future of Retail? It’s not the future of retail, the future is here, it’s really the present of retail, the future is here and you’ve gotta live it” Michael Medline, Canadian Tire’s President empathically stated at the Retail Council of Canada’s conference last week in Toronto.
Our world has seen continuous innovation in e-commerce, consumer shopping behaviour is evolving and consumer expectations are changing. But Medline warns “don’t underestimate the innovations in bricks and mortar”. He acknowledges there’s a massive sea change of how people shop, live their lives and defining what they expect from brands, stores but that’s where opportunity lies.
Digital retailers like Amazon are “market disrupters” noted Medline. He went on to suggest that bricks and mortar retailers need to disrupt their own business. Change is very difficult and people don’t like change.
Net, on the surface, retail may not look like a great business model and as noted in the headlines above, it appears to be a bad time to be in retail and invest in retail real estate. Mobile, e-commerce and a confluence of other factors such as lowest prices, paper and online digital flyers are clearly disrupting the current retail business model. Either retailers adapt or they die.
(New South China Mall 7mm sq ft/Ohio Randall Park Mall sitting empty)
Medline likened Canadian Tire and the ways Canadian Tire has to evolve to a golf swing. He stated “ put your feet in both worlds and shift weight from the back leg to the front … in the old world and new world … if your swing is too slow it’s a problem, if it’s too fast it’s a problem, you must shift at the right speed and you better be shifting period.” Retailers in Canada need to embrace change to new world. This will make it a more efficient and productive industry and Medline stated retail is a great business for winners and survivors — or those who dream big, act quickly and embrace the future.
Years ago, you would be hard pressed to find retail headlines in the press. That’s changed. Retail is big business in Canada employing over 2.1 million, there are many new types of retailers and the battle ground for technological breakthroughs is stronger than ever.
So, what does it take to survive and succeed in this ever changing landscape?
According to Michael Medline, surviving and growing in today’s landscape requires four major shifts based on key learning over the past few years.
- BE NIMBLE
- DREAM BIG. ACT FAST.
- BE PERSONAL – personalized experience
- SHIFT CULTURE – people are the most important piece of your business.
Companies can’t analyze every change being made. That will paralyze the organization and by the time the change is implemented, it will be obsolete.
Medline referenced the Sport Chek lab activation at Yonge and Eglinton in Toronto as an example of being nimbler. Historically, at Canadian Tire the idea would be analyzed, taken to the board, if approved a retail city built and tested, if tested well roll out to a test market where no-one can see what you’re doing , and if it worked worked then roll out another test another market, and if that worked, then roll out across markets – in otherwards, analyze the idea to death – change is coming slowly but if you don’t change you will run out of time warns Medline.
Canadian retailers may be considered large by Canadian standards however Medline reference it’s really a David and Goliath picture when you compare the size and scope of Canadian retailers to the giant US and global players. So be nimble, it’s a competitive advantage and don’t take on the giants with scale – that’s a game they will win so be nimble, approach your business as guerrilla warfare, try and learn and try and learn again. Don’t be be scared of mistakes and failure. Learn quickly and move quickly.
Medline discussed that Digital is not an opponent to Canadian Tire, rather it allows Canadian Tire to be more nimble. Canadian Tire prints 650 million flyers a year or the equivalent of 26 billion flyer pages per year and Medline noted that flyers used to be an amazing weapon, but tie your hands because you need to plan months ahead, commit to product, source product, guesstimate about the weather, net, paper flyers are not efficient. Things will change and are changing. Canadian Tire tested digital flyers, originally placing pictures from the flyer online but that didn’t work. Sport Chek evolved the test and learn by putting the flyer online, took pictures of products and placed online via Facebook, Google, Instagram, tools used to push products in more flexible manner. Digital flyers in this manner allow a retailer to be seasonally and socially relevant.
It is hard to do this? Yes. It’s hard cultural change and pushes a company out of it’s comfort zone but retail is about meeting customer needs and driving sales. “This is game we play” quipped Medline.
DREAM BIG. ACT FAST.
The death of bricks and mortar has been greatly exaggerated commented Michael Medline. He went to state that brick and mortar retailers want ecommerce capabilities and digital capabilities while ecommerce and digital retailers want brick and mortar capabilities. Canadian Tire and retailers need to be good at both. It’s a convergence of traditional with new technology and passionate, knowledgeable staff are the glue that binds theses capabilities together.
Medline elaborated that people still love to go shopping, it’s a social activity, part of life – a very important part of life and online will not replace brick and mortar. To win in today’s hyper competitive retail market, retailers need to excite customers, draw customers to their stores, create personalized experiences and be passionate about the service customers want and need .
Examples of retailers embracing change reference by Medline are Burberry on Regent Street in London UK using RFID technology. (http://www.vogue.co.uk/news/2012/09/13/burberry-regent-street-flagship-opens) Products on the table can be scanned to a screen, details and accessories about the product are immediately available and staff using tablets can access customer purchase history instantly valuing their customers time and making the experience more enjoyable.
Digital only part of story though and there are other ways to excite customers and draw them to your store. Bass Pro Shops present an emotional connection with customers making them feel like they are in the outdoors. Customers can try products and feel what’s going on.
Lululemon’s staff are community ambassadors. People (staff) are more important than ever and more expected than ever. Team members must be able to talk about products knowledgeably and be in a conversation with customers versus selling product features and benefits.
Medline asked the question “what does the competitor of the future look like? “ He went on to define the competitor of the future as best in class brick and mortar and best in class ecommerce. The best in class competitor of future will be a convergence of what customers need and want.
It’s a new world and people are more important than ever. To be the best, you need exemplary service, product expertise and community commitment. Consumers expect trusted brands to be there when needed and aligned to their values and aspirations. Canadian Tire’s competitive advantage is that it has roots across a vast country and can help out when in time’s of need. That’s what’s expected, community involvement is necessary – not a nice to have, and builds emotional connections. Consumers are your new brand ambassadors.
Huge cultural change is needed to survive. And it start’s with leadership. Leadership that embraces change, endorses a test and learn culture and keeps on trying things.
It’s a disruptive time in retail but the new formula is DISRUPTION = OPPORTUNITIES. Medline’s final message “change before you have to.”
IT’S OUR TIME TO LEAD THE WORLD.
Michael Medline, President, Canadian Tire Corporation
Michael Medline, Canadian Tire Corporation (CTC), is responsible for overseeing the operations of all CTC business units, including Canadian Tire, Financial Services, FGL Sports and Mark’s, as well as Corporate Affairs and Technology.
Michael has had an impressive 13-year career with Canadian Tire, having played a significant role in helping the Company stay on offense through innovative thinking and strong industry knowledge. He has extensive experience in building and transforming businesses, brands and customer experience to drive growth and value, and has led the Company in a number of high-profile projects, including the successful acquisition and subsequent integration of Mark’s Work Wearhouse in 2001 and the restructuring of Canadian Tire Retail’s Automotive unit in 2009. Michael is also the driving force behind FGL Sports’ growth strategy for its key banners, including: Sport Chek, Sports Experts, National Sports, Pro Hockey Life, Intersport and Atmosphere – which incorporates an aggressive five year store expansion plan.
Prior to his current appointments, Michael held a number of progressively senior roles with the Company, including President of Canadian Tire Automotive and Dealer Relations, Chief Corporate Officer and President for Diversified Business and President of Dealer Relations and Diversified Business.
Michael holds an MBA from the College of William and Mary in Virginia, an LL.B. from the University of Toronto, and a BA from the University of Western Ontario. In addition to his leadership roles, Michael is on the Board of the Retail Council of Canada and has been a board member of Canadian Tire Bank, Jumpstart, and Pan Asia Paper Company.
For over 22 years, The KMAC GROUP has worked with some of the world’s best-known companies to help them grow their sales. Using our experience in strategic sales, key account management, sales training, project management, project activation and execution, consumer engagement, strategic partnerships and live retail event activations, we help companies like Procter & Gamble and General Mills increase sales performance.
For the next 6 weeks, The KMAC GROUP will be tracking Olympic sponsor activations demonstrating sponsorship best practices that will help you achieve a positive return on your investment. Each week, we’ll be assessing the Olympic sponsorship practices of leading global and Canadian companies, tracking their activities at all touch points to see how they use sponsorship to drive sales and identify which practices work best.
Our third installment of this series highlights sponsorship best practices of the Official Outfitter of the Canadian Olympic Team – HBC (Hudson’s Bay Company) and adidas Canada, Official High Performance Apparel and Footwear Supplier for the Canadian Olympic Team.
Here is a recap of sponsorship best practices we’ve covered so far:
Sponsorship Practice #1: Deliver a simple, clear message.
Sponsorship Practice #2: Connect with your audience emotionally
Sponsorship Practice #3: Take an integrated, holistic approach
Sponsorship Practice #4: Market your core strategy through sport…(It’s not just an Olympic campaign)
Sponsorship Practice #5: Innovative Sponsorship – Adding value to existing ideas and platforms.
Sponsorship Practice #6: Engaging your audience
Sponsorship Practice #7: Get in the game, in real-time
This week, we’re introducing two more best practices:
Sponsorship Practice #8: Innovative strategic partnerships
Leverage each other’s strengths, experiment with different strategies to deliver an innovative brand experience for the consumer.
Sponsorship Practice #9: Bringing the Olympic Game experience to those who can’t attend the Games. (Connecting Canadians with the Canadian Olympic Team).
Hudson’s Bay (HBC)
Hudson’s Bay has been a long-term supporter of the Canadian Olympic team over the years, originally outfitting athletes in patriotic gear in1936. In 2011, HBC announced an eight-year renewal of their COC sponsorship commitment. HBC’s current deal supplies the Canadian Olympic team with opening and closing ceremony uniforms, podium outfits and casual wear for athletes, extending through 2020. Combining fashion with sport has gained significant traction over the years and began to take off when Roots debuted their Official Team Gear lineup to the Canadian public in 1998. Recently it has really taken off as HBC has provided leading edge fashion design and gear to Canadians in HBC stores across Canada.
As the official Premier National partner of the Canadian Olympic Committee, HBC has always been passionate about bringing the Olympic spirit to Canadians through their clothing line. This year HBC introduced a very distinctive look playing with colour-blocking techniques, incorporating red white and black along with bold Canadian Olympic team crests that makes a statement. The Canadian Olympic Collection (also known as the Olympic kit) will consist of T-shirts, sweaters, hoodies, sweatshirts, jackets and accessories.
In 2009 their Red Mittens Campaigns gained overwhelming success and soon became an iconic item for Canadians and the Games. Fans wore these as a symbol of their support for Canadian Olympians and continue to represent Canadian Pride. Building off of the success of the red mittens, HBC continues to show their commitment to sport in Canada by not only releasing their 2014 version of the ‘Red Mitten’, but also donating more than $35 million to support Canadian athletes through national sport organizations and initiatives.
Hudson’s Bay has been a brand that has been able to heighten their shopper experience both in stores and online by simply making it easy and consistent! When it comes to purchasing Olympic gear, most Canadians can now count on stepping into a Hudson’s Bay store, or jumping online to the HBC website to find anything they want, and its that easy! Shoppers shouldn’t have to dig and search for what they want. There is a dedicated space in HBC stores as well as online strictly for Olympic gear, and offers a variety of women’s, men’s and kids clothing and accessories at a whim. HBC achieved an Olympic inspired look within their stores using vibrant and patriotic displays while focusing on a podium appearance to help Canadians share in that prestigious experience. If you visit their website, eagerly awaiting you is a countdown clock for the opening ceremony to the 2014 Sochi Olympic Games. This not only excites Canadians, but is encouraging us to hurry and get our gear to support our athletes!
adidas, a brand known for sponsoring major international sporting platforms such as The World Cup and The Olympic Games has landed a deal with the COC to become the official high-performance apparel and footwear supplier for the Canadian Olympic Committee. In addition, adidas has signed sponsorship deals with 7 Canadian athletes who are the faces of the campaign called, ‘What It Takes’.
During the London 2012 Games, a $161.7 million investment to become the exclusive sportswear partner of the event helped adidas gain market share and open doors for new business growth opportunities. They will be building infrastructure in Canada within the next three years, including a new distribution center in Ontario and mini-shops within Sport Chek stores with the Olympic collection to be sold in a dedicated space.
This will be the first time that a full line of high performance Canadian Olympic team clothing will be available to Canadians across the country, (debuting at Sochi 2014), where Sport Chek will be the lead retail partner that will carry the entire line of the Adidas Canadian Olympic Team High Performance Collection. These items include compression and workout gear; outdoor training layers, winter jackets, vests, zip-up and pull-over fleeces, long and short-sleeved performance t-shirts, footwear and accessories. adidas has carefully designed this collection to equip athletes at all levels with Olympic-quality apparel and footwear to enhance muscle efficiency, manage moisture and insulate the body during all types of training. (Canadian Tire and Sports Experts, also Premier National Partners of Canada’s Olympic Team will carry select items from the adidas collection in stores across the country).
By ensuring that this brand collaboration is visible every day of the year in-store keeps their brand message consistent and easy for consumers when shopping. They are essentially saying, “Hey, this is what our Canadian professional athletes are training in, you could be a part of that by training in this gear too!” adidas has strategically chosen a niche (high-performance gear) market to focus their Olympic efforts on, and has done an amazing job keeping their brand messaging clear and consistent through strategic partnerships with FGL Sport Chek and the Canadian Olympic team.
Why does this matter?
Traditionally, sponsorships with athletic organizations usually consist of one single brand, but today, like the COC, we now see sponsorships being increasingly divided and sliced into niche-focused deals. This will be the first time ever the Canadian Olympic Committee will have two apparel partners, segmented by official team outfits and high-performance training gear. Some might say that this is diluting the value of the COC, but we believe these sponsorships can still be effective and profitable when each brand is clear and consistent with their marketing efforts and focusing on their specific target market.
Here we see two brands that have chosen to sponsor different aspects of the Canadian Olympic Team, and has succeeded in leveraging their sporting entity to further drive their business. The partnership between the Canadian Olympic Committee, adidas Canada, Sport Chek and Canadian tire is innovative because they are putting a unique emphasis on the athlete journey, the real training it takes to get to the podium, while HBC is drawing on the before and after experience of the Olympics, that being the opening and closing ceremonies.
Both HBC and adidas Canada have leveraged their strengths to bring the Olympic experience closer to their consumers by choosing which specific part of the Canadian Olympic Team experience they can bring to life for Canadians. Additionally, adidas has carved out an innovative partnership with Sport Chek to drive additional sales of their high performance gear. But truly, the real innovation is in the unique way each company was able to strategically partner with one sporting entity, the COC.
For over 21 years, The KMAC GROUP has worked with some of the world’s best-known companies to help them grow their sales. Using our experience in strategic sales, key account management, sales training, project management, consumer engagement and live retail event activations, we help companies like Procter & Gamble and General Mills increase sales performance.
Shopper Marketing In Practice: ‘Giving Shoppers A Run For Their Money’
Puma created an in-store campaign to boost sales of shoes endorsed by Olympic gold medalist Usain Bolt. Shoppers would grab a time-stamped ticket upon entering the store, and the faster shoppers returned to the register with their purchase, the greater discount they received on “the fastest trainers in the world”.
With this campaign, Puma was successful in making the connection between the product, celebrity and shopper. They used sponsorship and shopper marketing insights to drive their shopping experience to the next level, giving shoppers what they valued while empowering and entertaining them all at the same time. Simply put, this strategy helped them deliver on their brand promise….and this drove sales!
Win: Fought against commoditization; real differentiation through a shopping experience.
Shoppers have the power to choose what to shop for, where they want to shop (online, bricks and mortar) and when they want to shop. Simply, shoppers have the buying power because the money is coming from their pockets!
So how do you as a marketer or retailer capture their attention and get them to spend their money on your product? You’ve got to make it worthwhile; it’s a value exchange, a new ‘labour market’.
To put things into perspective, think of the shopper as the ‘employee’ and the brand/company as the ‘employer’. If you want your employee to do what you say, you’ve got to reward their behaviour with something they value. Aside from creating a positive customer experience and brand perception, things like discounts, attention, free merchandise or additional benefits (e.g. Air Miles reward points or Canadian Tire money) can influence purchase decisions.
Understanding this value exchange is crucial for developing a strategy that will cut through the clutter and get you noticed on the shelf! The continuous demands and limited amount of time shoppers have because of their busy lifestyles forces marketers and manufactures to examine more closely what a shopper values while making their purchase decisions.
Shopper Marketing has been the response to these challenges at the retail level, where understanding shoppers has helped drive growth and improve the overall shopping experience for the shopper. As the needs and wants of shoppers continue to change, our strategy for winning their attention will need to evolve as well. Understanding the value exchange between the seller and buyer will help us push to discover what shoppers really want in exchange for their time, consideration and ultimately their money.
Shopper marketing is NOT consumer marketing. Although it may influence consumers, it’s developed for the shopper. What’s the difference you ask? The consumer is the person or thing that is using/experiencing the product even though they may not be the one actually shopping or purchasing the item – that’s the shopper! Likewise, the shopper may not consume the product.
So what is Shopper Marketing really? There are many definitions of ‘Shopper Marketing’ but we’ve decided to capture 3 of the most common interpretations of Shopper Marketing to provide you with a well-balanced perspective on the concept itself.
Definition #1: Understanding how one’s target consumers behave as shoppers in different channels and formats.
Definition #2: Shopper Marketing is a discipline designed to drive growth by improving the shopping experience for the shopper.
Definition #3: The application of shopper insights along the path to purchase to affect purchase behaviour in order to increase sales for both retailers and manufacturers and all stakeholders.
In simplest terms, Shopper Marketing is a means to impact shoppers’ purchasing decisions.
For the past decade, the majority of our time has been devoted to understanding the consumption of goods and services, in other words, our focus in marketing has been consumer oriented, but what’s been generally ignored is the shopper and the path to purchase, which is a consumer in the shopping mode. It’s becoming increasingly important to incorporate a shopper marketing plan into your overall marketing strategy in order to drive growth in the ever changing market place. A holistic shopper marketing strategy is multi-faceted and includes every aspect of the shopping experience.
Shopper marketing is not limited to in-store marketing activities. It is much broader than that and to be successful, shopper marketing needs to be part of an overall integrated marketing approach that considers the opportunities to drive consumption and identifies the shopper that would need to purchase a brand to enable that consumption. It is important to understand shoppers in terms of how well they interpret the needs of the consumer, what their own needs as a shopper are, where they are likely to shop, how they shop, in which stores they can be influenced in, on what mediums they can be influenced and what in-store activity influences them.
Agencies like KMAC utilize shopper marketing to help create experiences that guide consumers to the next stop and help them complete their journey along their path to purchase. The path to purchase is quite a complex journey that shoppers take from discovering a product, assessing the product, exploring the product, evaluating it, taking action, using it or experiencing it and advocating it. Shoppers will face an overwhelming amount of options along the way and will be forced to make a decision before they can move forward. But with deeper shopper insights, we’re able to create better shopping experiences through things like merchandising, promotional planning, category management, brand messaging and collaborative programs that will encourage shoppers to purchase your product instead of your competitions’. These efforts combined with a strategy backed by research are helping brands today adapt to the changes happening within retail.
Our job is to turn shoppers into profitable ones. To do this, we need to understand the challenges and motivations of a shopper and then present the solutions in a captivating way!
Over the past decade, as the power has shifted to the consumer, so too has the power from the manufacturer to the retailer. The manufacturers now depend on the retailer as a main gateway to the consumer, one who is empowered by knowledge and the choice to seek out whichever retailer “deserves” or “earns” their business.
Not an ideal scenario, but this is what is happening in the retail world today.
To add to that, the cost to the manufacturer to get their products on the retailer’s shelf has risen, the number of choices a consumer has in each category has increased, and the number of channels consumers have to purchase each product has increased.
So where does that leave manufacturers?
Smaller margins and stiffer competition!
These challenges require new tactics in order to win at retail.
Stay tuned this month as we will be sharing with you every Friday our Shopper Marketing Series outlining what Shopper Marketing really means, why it’s important, its impact in the retail world and how it’s successfully used to help improve your bottom line.
Burlington, ON, November 13, 2012 /CNW/ –
“An idea is worth nothing if it has no champion to bring it to life, so don’t wait, activate.”
We live in uncertain times. These times are challenging and will continue to be challenging. For YOU – Challenging? Yes. BUT Opportunities to Grow? Even more so.
STOP: THINK ABOUT YOUR BUSINESS NEEDS.
The challenge is doing more with less and getting ideas turned into action. Good ideas are common – what’s uncommon are people who’ll work hard enough to bring them about. That’s what THE KMAC GROUP does.
IT STARTED 21 YEARS AGO.
THE KMAC GROUP has evolved as a partner helping enterprises stay on top by empowering decision makers with the ability to get more done while keeping focused on one thing – their core business. KMAC GROUP President Keith McIntyre commented “It’s been a fascinating journey since we opened our doors in 1992. The Leafs were in the playoffs and the Jays were winning a World Series. Things have changed and so have we. We’ve refreshed our look to reflect our commitment of helping clients move forward and we invite you to take part in shaping KMAC’s future by tapping into our experience and resources to capitalize on opportunities for growth. One thing that’s not changed is our common purpose — to grow your business. We focus on your non-core business challenges so you can keep your focus on your core business.”
Let’s Get it Done
, our mantra for 2013 is energetic, aspirational and versatile. McIntyre notes “This phrase tells the story of getting a project off the ground, moving it forward, delivering results, empowering you to get more done. We do this through innovation (actionable ideas), established communities and networks, efficient process, and enriching value.” THE KMAC GROUP website has also been completely revamped to provide valuable insights and content. We invite you to “Discover” deeper insights into the world of sponsorship, experiential marketing and strategic partnership activation while offering fresh, inspirational content and resources from leading global technology and design firms.
ABOUT THE KMAC GROUP
THE KMAC GROUP is recognized by Fortune 500 companies for getting complex ideas and programs up and running seamlessly, quickly, effectively and efficiently. With over 740 projects activated for 15 Fortune 500 companies, 15,000 in-store events executed and a community of 1,500 specialized field consultants, KMAC has mastered the science of activating ideas. KMAC brings deeper, more meaningful relationships and connections to your business providing expertise in sponsorship, spokespersons, shopper marketing, experiential marketing and strategic partnerships. You focus on your core business, we’ll take care of the rest.
For further information, please contact Keith McIntyre:
Cole Haan’s newest campaign not only directly targets their key audience, but asks that audience to engage with the product. By making the shoes available on the streets of big cities, Cole Haan is creating an experience around the product. Women who are going straight from work to a late-night party are going to want to pick up a pair of comfortable shoes, but might not have the time to do soon in between their busy lives. By selling their shoes in a street truck, Cole Haan is accessing an audience they might not regularly reach and providing that audience with a unique brand experience. This marketing campaign will not only reach more audiences, but create new brand ambassadors.
The Last Word is a weekly segment on The KMAC GROUP’s blog that delivers our expert insights on notable marketing news.