Retailers try new tactics to keep their edge

The retailing map in Canada is quickly being redrawn.The trend towards larger stores, the demand for a more fulfilling shopping experience - and U.S. competition - are driving innovation and timely response.One store at the front of this renewal is Consumers...

The retailing map in Canada is quickly being redrawn.

The trend towards larger stores, the demand for a more fulfilling shopping experience – and U.S. competition – are driving innovation and timely response.

One store at the front of this renewal is Consumers Distributing, with, by the end of this year, 250 stores in Canada.

The chain recently announced it intends to spend about $100 million on new, much larger stores that will alter its retailing approach for the first time in some years.

Steve Ince, vice-president of marketing at Consumers, says for the last three years, the company’s private ownership has concentrated on improving behind-the-scenes functions such as inventory, merchandise quality and computer systems which, he concedes, were ‘not state of the art.’

Now, Ince says, Consumers’ principal owners – Canada’s Westbourne Management and Belgian multinational Ackermans & van Haaren – are ready to move ahead.

‘Site deals’

Ince says Consumers is about a month away from signing ‘site deals’ for the five to seven superstores slated to open this fall in urban locations in Ontario.

Another 15 to 20 superstores are planned for the rest of Canada in 1995.

Ince says it is expected the new stores will draw customers from a larger city area than regular size Consumers stores do now.

Chris Kubas, a retail analyst at Kubas Consultants in Toronto, notes the trend in retailing is towards ‘large box’ stores, but wonders if the superstores are not a signal Consumers intends to axe some of its poorer performing stores.

Ince is emphatic the new locations are not a response to the coming to Canada this month of Wal-Mart Stores, the world’s largest retailer.

But he is less assured about the arrival or probable arrival of other u.s. retailers such as Target Stores, J.C. Penney, Circuit City, Warner Bros., and others.

He says what Consumers has tried to do with its new stores is take the blueprint from u.s. catalogue retailer Service Merchandise and improve and adapt it for the Canadian market.

Service Merchandise is the largest catalogue retailer in the u.s., with stores in almost all 50 states.

Argo’s

Ince says Consumers is also watching developments at British catalogue retailer Argos, with which his company has an open relationship.

Ironically, he says, Argos started in the u.k. by borrowing the catalogue retailing idea from Consumers, adding neither Consumers nor Argos has any intention in operating in each other’s market.

The new Consumers stores will have display showrooms averaging 13,000 to 15,000 square feet, compared with 2,000 to 3,000 square feet found in typical Consumers stores.

Their total size will be 25,000 to 30,000 square feet, compared with the 10,000 square feet or so for Consumers’ current format.

Ince says this twofold or threefold store size increase means Consumers will be able to display an example of just about every item it carries,a considerable improvement from what company stores can do now.

He says other significant changes at store level will be the introduction of interactive kiosks customers can use to look through – on screen – the Consumers catalogue.

They can also use the kiosks to pay for their merchandise with a credit card.

Ince says also different in the superstores will be display sections.

For example, he says customers can enter the store, look for the sign for the section they want – sporting goods, say – and examine a demonstration model of the item they want to buy.

At the moment, customers who buy a bicycle, for example, usually have only the catalogue to guide their purchase.

Despite the changes, Ince says, customers who prefer to will still be able to make their purchases the usual Consumers way, with an order form handed to service staff.

He says the merchandise mix in the new stores will be changed as well.

As well as continuing its reliance on well-known brand names such as Sony and Casio, Consumers will emphasize its jewelry selection and electronics-high tech goods.

Ince says jewelry sales have grown dramatically at Consumers and have become something of ‘an obsession’ for the company, noting Consumers has been anxious to dispel the notion its jewelry is not the best quality.

He says considerable strides have been made with the merchandise, and, in some cases, Consumers deals directly with manufacturers in Italy.

To help further the sales of jewelry, Ince says the superstores will have one or perhaps two knowledgeable staff on hand to provide advice to customers.

As for what the new stores will do for catalogue retailing generally, Ince says there is little doubt they will drive all catalogue sales.

He hopes, too, Consumers’ involvement with Groupe Videotron’s ubi interactive tv project scheduled for Chicoutimi, Que. next year will also help sales.

Consumers’ catalogues will go on-line on ubi in 1995, allowing interactive purchases and payment.

‘We are incredibly keen on the learning that comes from [ubi,]‘ Ince says, adding the real news about ubi in Chicoutimi is who has not signed up to use it.