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Barbara Farfan

US Invasion in Canada and Mexico Forces Retail Revolution - Starbucks, Target, Walmart Push Across Canadian and Mexican Borders To Find Customers and Win Loyalty (SBUX, TGT, WMT)

By February 26, 2013

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Some might say that a revolution in the Canadian retail industry is long overdue and that the 2013 invasion of some of the largest U.S. retail chains across Canadian borders is a positive catalyst for change for the largest Canadian retailers. But while the invasion of Starbucks (SBUX), Target (TGT), and Walmart (WMT) might instigate some improvements in the retail operations of Loblaw, Canadian Tire, and Tim Hortons, undoubtedly Canadian retail leaders would have preferred to enact changes at the regular slow-and-steady Canuck clip rather than being forced to make swift and bold changes in an all-out 2013 North American battle for customers and loyalty.

Can't you yank retailers find enough to keep you busy inside your own borders, eh?

Of course, being the guerilla capitalists that American retailers are, that question is laughable. Reportedly 90% of Canadians live within 100 miles of an American border, cross that border often to shop already, and are as familiar with the best U.S. retail brands as Americans are. And if all of these things are true, Canadian retailing lost the battle for customers and loyalty a long time ago. An escalated physical retail presence by U.S. retail chains in Canada will confirm, rather than create Canadian customer loyalty defection.

Undoubtedly the beginning of the accelerated expansion by American retail chains like Starbucks, Target, and Walmart in 2013 in Canada is the end of the small-townish attitude towards retailing in Canada. This is unfortunate in many ways. I've spent considerable time in Canada on business and it has always seemed to me to be a kinder, gentler nation, particularly in the way that it does business. To me there is a certain charm about stepping into a Canadian retail store and feeling like you're stepping back in time to a U.S. retail experience you had a decade before. The lack of retail sophistication and intensity is really quite endearing.

But seemingly Canadian retail shoppers aren't so charmed by the backward ways of Canadian retail chains. For example, Loblaws is planning to fight off the U.S. retail invasion by launching "express" stores Loblaws is launching express stores which are only 10,000 square feet in size, about two-thirds smaller than the average Loblaw store is now. These Loblaw express stores have been primarily designed to be pickup locations for their new "digital catalogue," which launches in the same month that Target comes to town.

In other words, Loblaw is finally getting serious about multi-channel integration and click-to-brick infrastructure. And the response from both Canadian consumers and American boardrooms is, "Welcome to 21st century retailing!"

Certainly there is no need to for retail technology advancements in Canada if Canadian consumers aren't demanding it. Being the even-keeled kind of people that they are, it seems that instead of demanding that Canadian-based retail chains keep up with technology, Canadian consumers have just quietly gone out and found American retail chains that are on the cutting edge of it.

In a recent report by the Huffington Post, the most popular retail websites for Canadian consumers is U.S. based Old Navy. The top ten most popular retail websites for Canadian consumers only includes two Canadian retail companies - Chapters/Indigo and The Source. Seven of the most popular retail websites are American and one - Sephora - is based in France.

So while it is about time that Canadian retail chains like Loblaws take U.S. competitive advantages seriously, they may find that they've fallen too far behind in the race to be serious contenders in today's retail race. Even before the first of Target's 124 new stores is opened this year, more than 30,000 Canadian consumers are in possession of a Target customer loyalty RedCard, according to a report by Fox Business. When Target and Walmart start battling head-to-head on Canadian retail turf in full force, the American in-your-face merchandising and marketing tactics that successfully cast a hypnotic trance over American consumers will undoubtedly start to take hold of Canadian consumers as well.

It's not going to be a beautiful day in the neighborhood for Canadian retailers, like the Target commercial aired during the Oscars telecast promised.

The Canadian retail chain that seems to be best girded for battle with the U.S. retail invasion in 2013 is the iconic Canadian... read the rest of the story about the fight for North American retail territory >>

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