Take heed of Canadian Tire. Mid-last month, when the 84-year-old brand announced a move into banking, sure, it had been heavily researched for years, but it had the ballsy stride of a move executed by a nimble brand with a healthy ego, sure of its iconic status and coming off a stellar 12 months, complete with a glitzy campaign and some decent profits to match. Simply, now more than ever, one gets the impression that Canadian Tire is ready to rumble. Funny how that was hardly the case a little under 10 years ago.
‘They had a little bit of The Bay phenomenon,’ says Chris Lund, CEO of retail strategy consultant, Perennial, which has worked with the brand for six years now. ‘There were in all these different categories, and it was getting tougher and tougher for people to answer the question: ‘What do you go to Canadian Tire for?”
Then, the response was rather limited: Auto parts and little else. ‘We looked at the store and said: ‘There’s another 70,000 sq. ft. of store where that guy hasn’t even shopped. Why isn’t he going into lighting? Or home décor?”
Today, they go for four reasons: driving, living, playing and fixing. This has been the foundation of the sizable rejuvenation of the brand, and to underscore the point, the words are now prominently displayed in large, red letters in the bulk of its stores.
‘The key was to reposition the store into digestible bites, thereby getting people to shop the entire store,’ Lund explains. ‘What it has done for Canadian Tire is that it gives these entrepreneurs [the stores in the chain are owned by what they call associate dealers] who are really in touch with the community, an opportunity to say, ‘Come and revisit us; use your existing entry point,
but we want you to shop the entire store.”
And buoyed by solid numbers (in August, its second quarter retail earnings were up 5.35%; same store sales were 3.3%) plans were announced recently to step up the rollout of its larger-format stores, which range from 65,000 to 100,000 sq. ft.
They aim to have about 300 of its 464 stores conform to what they’ve dubbed the Concept 20/20 store model, which means the addition of 20% more floor space than a traditional location, by 2009. About 200 will involve retrofitting existing stores. The remaining 100 will be new locations found in bustling suburban areas and some downtown, much like the unexpected arrival in September of a Canadian Tire at Toronto’s busy Bay and Dundas intersection.
‘What we’ve done with Concept 20/20 [is offer] more space for our customers to browse,’ says Tracy Fellows, Canadian Tire’s VP, consumer advertising and marketing. ‘It gives them clearer navigational signals. It inspires them because we can display products more broadly. The aisles are a lot wider and it’s a lot friendlier, exciting and more inspiring a shopping experience.’ Merchandise offerings have also been spruced up – including the addition of the Debbie Travis line of products, for example – as part of an effort to attract the female consumer to the stores and completely discard its auto parts-only roots.
Retail analyst John Torella of the JC Williams Group applauds the new-look Canadian Tire. ‘[They have] really found a way to combine both brand and merchandise. And their current campaign does that in an innovative, creative way.’
Yes, that little ad campaign by Toronto-based Taxi. ‘It is one of the key highlights [of the past 12 months],’ says Fellows. ‘We’re really pleased. It’s been very successful for us.’ How much so? ‘The brand link [metric] – the customers’ ability to relate the ad back to Canadian Tire – has just blown the doors off of any norm that’s been out there with Ipsos Reid,’ she says.
So what does Torella predict is Canadian Tire’s future? ‘Just accelerated growth,’ he says.’ I think they’ve got it all together.’ Evidently, so do they.
