The retail sector was transformed in 2013 with new entrants, mega-mergers, technology and shifting trends. The much anticipated Target stores entered Canada and rolled out stores across the country. Grocery giant Sobey’s bought Safeway, Loblaw bought Shoppers Drug Mart and the Hudson’s Bay Company bought luxury retailer Saks Fifth Avenue. Technology continued to make headway as retail trends shifted to more personalized experiences.
The following list highlights some major predictions for 2014 that we at Field Agent think will continue to transform the Canadian retail industry this year.
1. Mobile – Mobile will continue to gain ground as consumers everywhere are walking around with smartphones, tablets and mini-tablets. These devices are enabling consumers to find deals, comparison shop, discover stock availability, product information and other related information. In addition, retailers will continue to add the processing of mobile payments. Apple specializes in this service as salespeople carrying devices can process your purchase from anywhere in the store instead of requiring customers to line up at the cash register.
2. Omnichannel – Currently, retailers offer customers a variety of mediums with which to make purchases including, bricks-and-mortar, online, mobile and catalog. Increasing omnichannel use has enabled customers to integrate the overall purchase process through different channels. For example, customers can research a product on their mobile device while in the store and make the purchase in the store or they can buy online and return in-store. Retailers will continue to increase consumer accessibility of overlapping channels.
3. Personalized store experiences – Bluetooth Low Energy (BLE) is a new technology that is based on locations that are picked up from mobile phones with the aid of technologies like iBeacon. In the retail setting, BLE technology detects when a customer walks in the door and where they are standing in the store. Then, based on where they are standing, deals can pop up on their mobile phones providing personalized offers for each customer. Also, if customers have the same store app installed on their phones, they can be reminded of products they liked online. Macy’s has started an in-store pilot program of BLE technology and PayPal will be introducing beacon technology in Canada.
4. Customized loyalty programs – Loyalty programs have done well in the past but are now approaching a different era of personalized offers. In 2013, Loblaw introduced a new digital rewards program PC Plus. This new program integrates social media and consumers’ smartphones to collect personalized data on each shopper and provide personalized offers on this data. General paper flyers may start to be less popular as individual offers become more popular.
5. In-store technology – Retailers will continue to make use of in-store technology for information, displays or payment processing. In 2013, Canadian Tire rolled out 5,000 tablet devices in its stores for customers to look up products and information on site.
6. Increasing on-line sales – Online sales in Canada have been slow to develop as retailers have been slow to provide online retail options compared to the US. But, this area is starting to take hold as some retailers are starting to offer more products for sale online and holidays like black friday and cyber Monday are gaining in popularity. For example, Amazon Canada recently expanded its offering of products and announced the introduction of groceries. Other retailers like Walmart, Gap and Indigo are offering more and more for customers.
7. Express stores – The era of big-box retailers is ending as consumers are retreating back in favor of smaller scale stores. Just this year, Loblaw tested a new, small format discount store in Calgary called The Box By No Frills. Other retailers offering smaller store formats include Canadian Tire Express and Walmart’s Urban 90 format, which is a smaller supercentre. Walmart is currently rolling out small express stores in the US.
8. Upscale department stores – Upscale Canadian retailers like Holt Renfrew are beginning to feel the heat as other upscale American retailers are headed up North. In 2013, Hudson’s Bay bought Saks Fifth Avenue for $2.4 billion and will be bringing up to 7 outlets to Canada. Seattle-based Nordstrom will be bringing as many as 10 outlets to Canada with the first Canadian store slated to open in fall 2014.
9. Sears Canada – This company has been the subject of much turmoil as it has been selling off its stores across Canada. The company acknowledged it needed to conduct a major turnaround effort, which was spearheaded by CEO Calvin McDonald. After many turnaround initiatives, the CEO resigned and we still do not know what is in store for the company. Is it headed for bankruptcy, sale or dismantling and was McDonald leaving a sinking ship?