It’s still early days for one of the newest entrants on the Canadian e-commerce scene, but Canadian Tire officials believe their online consumer business embodies yet another channel with which to woo consumers – and the ability to do so on a much more personal level.
Last month, after more than two years of dabbling in the online world, Canada’s most-shopped retailer finally rolled out its Internet shopping site, www.canadiantire.ca.
‘We really view this business not so much as a standalone, independent new thing, but just as a different way for consumers to shop Canadian Tire,’ says Scott Bonikowsky, senior director of corporate affairs at Canadian Tire. ‘What we’re really looking for is very strong integration with our retail bricks-and-mortar business.’
Bonikowsky says that in addition to having the site reflect the look and feel of Canadian Tire’s retail stores – both have a high proportion of ‘white space,’ for example – the site is completely integrated with Canadian Tire’s retail operations and inventory system. Online prices are the same as they are in-store, product returns and exchanges are facilitated through local stores (as well as by mail), and consumers can check product availability online in real time.
Beyond that, Bonikowsky says Canadian Tire hasn’t invested heavily in e-commerce infrastructure or back-office capabilities. Rather, he says, it’s relying on third parties to handle distribution, shipping and customer service management.
‘What we’ve focused on is the merchandising and the product assortment and the presentation of the site itself – because we really want to understand the business and how it’s going to evolve before we really make substantial multi-million-dollar investments in infrastructure,’ he says.
Nonetheless, the retailer has invested roughly $36 million in total over the last two years to get the site up and running. (The site’s first incarnation – which cost $10 million to $15 million to develop last year – never launched because the company found it didn’t integrate well with the retailer’s bricks-and-mortar operations, which comprise more than 430 stores owned and operated by independent dealers.)
The current site features 5,500 of Canadian Tire’s best-selling products divided into several categories, including Around the House, Workshop, Sports and Recreation, Garden and Patio, and Automotive. That number is expected to expand three-fold over the next year. Consumers can search by product, gift idea – such as ‘for the cook’ or ‘for the do-it-yourselfer’ – price point, specials or by occasion.
‘When we did our research, we found Canadians wanted to shop at mainstream, well-known retailers with whom they have a relationship. People were tuning out of shopping until those respected companies came online, and that’s certainly happening this fall,’ says Bonikowsky. ‘There’s no other retailer like Canadian Tire with the types of products we sell.’
In addition to being able to select from such a broad product assortment, visitors can benefit further by registering as a member of the ‘My Canadian Tire’ program on the site. Members are able to save items in their shopping cart for purchase at a later time, indicate their preference for special offers and new product information, receive express checkout and order status, and earn and accumulate Canadian Tire money.
Earlier this fall, when the Canadian Tire cash bonus coupon rewards program was extended to store cardholders, shoppers were rewarded with 20% more Canadian Tire money than if they paid by cash or debit. Now the same offer is being made online. And online shoppers who use their branded credit card will earn even more electronic Canadian Tire bucks.
‘Our Canadian Tire money reward program is very much a focus of the Web site,’ Bonikowsky says. ‘The research was compelling. Customers told us that if nothing else, we had to make sure we had Canadian Tire money on the site. There’s a lot of value in that for the customer and for us.’
The registration-driven site represents yet another way for Canadian Tire to gather customer data. In addition to its 2.2 million cardholders, the retailer has amassed more than 260,000 subscribers over the last three years through its well-entrenched eFlyer program – an e-mail version of the company’s weekly flyer, tailored to the subscriber’s shopping preferences.
‘The starting point for us, in terms of a data mining and database strategy, is our eFlyer program,’ Bonikowsky says. ‘What we are focused on is personalizing and customizing what we’re offering customers based on their preferences.’
Without divulging details, Bonikowsky says Canadian Tire will explore the possibility of developing personalized offers for certain segments of its online customer base. ‘We haven’t committed to doing that yet in our marketing program,’ he says, ‘but it is certainly one of the options we’ll look at.’
For now, he says, the priorities are to further develop awareness of the Canadian Tire money rewards program online, to expose the cardholder database to the new online channel and to drive site registrations from partner sites, such as Canoe.
‘It’s hard to appreciate how much of an impact this [the online entity] is going to have,’ says Michael Szego, retail consultant with J.C. Williams Group, who points out that Canadian Tire possesses a huge brand presence outside of major urban areas. ‘But it will, particularly for those customers who’ve known and trusted them for years. In many towns, they’re the only game in town.’
And while it’s taken the retailer a long time and a lot of money to launch its e-commerce site – due, for the most part, to channel-conflict issues – Szego says Canadian Tire is still well-positioned to be an online innovator.
‘They are certainly on the right track by multi-channel marketing their Canadian Tire money,’ he says. ‘They have a definite competitive advantage – there is very little activity in online loyalty programs right now, so there’s a great opportunity for them here.’
