Integration can break online shopping barrier

Howard Pearl is president and CEO of Microforum Inc., an end-to-end e-commerce and communications solutions provider. The future of electronic retailing in Canada is one of untrammeled growth and limitless opportunity - and so say all of us. But if...

Howard Pearl is president and CEO of Microforum Inc., an end-to-end e-commerce and communications solutions provider.

The future of electronic retailing in Canada is one of untrammeled growth and limitless opportunity – and so say all of us. But if that’s true, why are so many Canadian retailers so reluctant to make the great leap into cyberspace?

We recently participated as one of four sponsor companies in the J.C. Williams Group study Retail.ca: Connecting with Canadian E-shoppers.

Conducted in four waves between January and December 1999, the study surveyed a total of 823 Canadian e-shoppers, 2,000 Canadian Internet users, and 86 Canadian retailers. An additional wave of research, based on a survey of over 8,000 Canadian e-shoppers, is soon to be released.

The results would seem to confirm that there is, indeed, a significant inconsistency between consumers’ very positive predisposition toward e-shopping and retailers’ reticence to meet this burgeoning demand.

The study suggests that while consumers see tremendous benefits to be had by online shopping – convenience and price, among them – retailers are held back by fears about security, customer satisfaction and going up against online Goliaths such as Dell or Sears or Chapters.

Not surprisingly, it’s among the ranks of small- to medium-sized Canadian retailers that the study finds the greatest trepidation about expansion into the digital environment.

Make no mistake – these are well-founded concerns for any retailer that is serious about protecting the customer relationships it has so carefully nurtured in its bricks-and-mortar incarnation. The digital retail revolution is creating new and unfamiliar consumer expectations in the areas of customer service and competitiveness. Breaking down the barriers for consumers and retailers alike will require a delicate balance of state-of-the-art technological solutions and old-fashioned marketing wisdom.

In fact, many of the strategic and executional skills traditional retailers have developed will apply to their online storefronts – after all, the customer hasn’t changed, only the distribution channel has. While adding the Internet channel to an existing business gives retailers an unprecedented window on a whole new world of domestic and international customers, they can be sure that the online shopping experience will be every bit as important to customer preference as its bricks-and-mortar equivalent.

At Microforum, our experience in designing and developing Web-based solutions has convinced us that the key to successfully translating conventional business to the digital environment lies in the true integration of strategy, technology and creativity. Only then can the retailer hope to achieve the twin goals of maintaining the essence of its bricks-and-mortar brand, while adapting to the technological imperatives of selling in cyberspace.

The digital business environment is unfamiliar to most and challenging for all. But integrating sound merchandising and marketing strategy with excellent retail execution will remain the key to online success.

Sidebar: The 10 Golden Rules of E-Retailing

1. Simplicity Rules. Create a graphical interface that showcases your products and relevant information. You wouldn’t clutter up your store with irrelevant groovy graphics, so why would you do it on your Web site? Keep things focused.

2. Speed Rules. Your site must load quickly – not everyone has a T-3 line. You have just a few seconds to secure a prospective shopper’s interest. Avoid the potential for ‘load rage’ caused by time wasters like superfluous animation.

3. Security Rules. Reinforce customer confidence with respect to credit card security. Get a third-party certification of your site. Display security assurances such as the ‘Safe Merchant’ logo.

4. Merchandising Rules. Just as you do in your bricks-and-mortar store, make it easy for customers to find what they want. Filter choices up front, using brief customer profiles in order to direct shoppers to the areas of your Web site that best meet their needs. Always let shoppers know precisely where they are with a ‘You are Here’ button.

5. Customization Rules. Simple three- or four-question surveys can help you to personalize the online shopping experience. ‘Members Only’ services can be used to gain further insights into the shopper and build long-term, one-on-one relationships.

6. Community Rules. Put the shopper in touch with other customers via user ratings and shopper reviews from previous customers. Not only is it reassuring to feel part of a community, it adds credibility to the promise of a satisfactory shopping experience.

7. Service Rules. Provide cyber-shoppers the opportunity to come back to earth with a toll-free phone number or a direct ‘chat line’ to customer service. Make it available 24 hours a day, 7 days a week if possible; e-shoppers are no respecters of regular business hours.

8. Flexibility Rules. Many Canadian e-commerce retailers receive the bulk of their online orders from the U.S. and overseas. Where possible, offer your customers currency options or local currency billing.

9. First Impressions Rule. Research shows that first-time shoppers will likely be timid spenders. Make their first online purchase easy and convenient with first-time offers like flat-rate shipping.

10. Marketing Rules. Your online store is an extension of your brand, not a new brand. Getting people to your Web site is no different than getting them into your store. Traditional advertising is just as effective at attracting e-shoppers as it is mall shoppers. Broad reach and brand image are as critical to your Web site’s success as they are to your store’s. Online advertising is a useful tool but think of it in the same way you would an in-mall promotion. Alliances and links with complementary sites and e-tailers can generate customer referrals. Strategic co-marketing alliances can help to fast track your customer base. HP

Also in this special report:

- It’s a whole new ball game: As consumers become more comfortable doing business online, marketers must come to grips with the new challenges that are now facing them p.D17

- Without infrastructure, you’re courting disaster

- Future’s bright for online newspapers p.D22

- Solutions offer Web marketers customer data boost p.D25

Meat and plant-based sales are both strong at Maple Leaf

Both priority areas performed well in the company's full-year results, helped by a boost in marketing for new products.
Maples Leaf All Natural 4

Maple Leaf Foods reported higher Q4 and full-year 2020 sales, driven by its sustainable meats and plant-based proteins. 

The CPG co. reported quarterly sales of $1.13 billion, up from $1.02 billion for Q4 2019, as well as net earnings of $25.4 million, compared to $17.5 million for the same period the year prior (an increase of 45.2%).

For full fiscal 2020, the company reported a total increase of 9.2% in sales, driven by what it says is “strong growth in both the meat and plant protein groups.”

“We have repositioned our portfolio towards two high-growth categories now representing 20% of our annual sales generating a compounded growth rate in excess of 25% over the last three years,” says Michael McCain, the company’s president and CEO.

Meat protein group sales  comprised of prepared meats, ready-to-cook and ready-to-serve meals, snack kits, value-added fresh pork and poultry products that are sold to retail, foodservice and industrial channels, and agricultural operations  grew 11.3% for the quarter. 

Meanwhile, sales of plant protein products  refrigerated plant protein brands such as Lightlife and Field Roast, premium grain-based protein, and vegan cheese products sold to retail, foodservice and industrial channels  was up 5.5% over the same period. 

Sales growth for its meat portfolio was driven by “a favourable mix-shift towards sustainable meats and branded products,” but also growth in exports to Asian markets, and pricing actions implemented to mitigate inflation and other structural cost increases, according to the company. Strong demand in the retail channel was offset by lower volume in foodservice as a result of COVID-19.

For its plant-based offerings, sales for 2020 were $210.8 million compared to $176.4 million last year, representing a growth of 19.5%, or 18.1% after excluding the impacts of foreign exchange. The segment was driven by expanded distribution of new products, continued volume increases in its existing portfolio, and pricing actions implemented to mitigate inflation and other structural cost increases.

SG&A expenses totalled $144 million for the plant group alone in 2020, with investments focused on advertising, promotion and marketing to build awareness, as well as supporting brand renovation and new product innovation. SG&A for meat proteins were $346.6 million for the full year, and the company says it expects SG&A levels and marketing investment in 2021 to be largely in line with where they were in 2020.

The company, which in 2019 announced it had gone carbon neutral, says it’s amplifying this commitment while “focusing on eliminating waste in any resources it consumes, including food, energy, water, packaging, and time.”