Crumbl Cookies in Edmonton at Rabbit Hill Crossing (Image: Crumbl Cookies)
Edmonton-based ZZA Hospitality Group, which operates several Boston Pizza franchises in Alberta, is expanding the gourmet Crumbl Cookies brand in the province.
The company recently opened Canada’s first location in Edmonton at the Rabbit Hill Crossing shopping centre in the southwest part of the city.
Dan Arndt, President of ZZA Hospitality Group, said more locations are coming in the province.
“Crumbl is a franchise out of the U.S. and they have been operating since 2017 and whole concept behind Crumbl is that we only sell cookies. So we have a rotating menu of six gourmet flavours of cookies each week,” said Arndt. “And those flavours rotate out of a catalogue of more than 200 different flavours of cookies. So the whole idea with Crumbl is this rotating menu. Every week we come out with six new cookies and they’re all gourmet flavours, interesting flavour profiles. That’s basically the whole song and dance behind Crumbl.”
First Crumbl Cookies Storefront (Image: Crumbl Cookies)
Cookies are made from scratch and in-house and everything is baked fresh. There is no seating area, just pick up.
Dan Arndt
“Crumbl in the U.S. opened five years ago and I think they just opened their 850th store in the U.S. I don’t know what their plans are for the brand overall in Canada but our group is working to open six locations through Edmonton and beyond.” said Arndt.
“We’re quite keen on the brand. It’s done very well to open and it’s been a good process for us to get this first store open. We are currently under construction on our next site in Airdrie and that’s set to open at the end of June. And then we have an agreement with Crumbl corporate to open four more locations that we’re currently working through real estate on but intend to open more locations in and around Alberta including St. Albert and Red Deer and then other locations.”
He said key real estate locations include busy grocery store areas in shopping centres or other similar anchor tenants like Walmart and Costco. The Freeson Bros. Fresh Market is located at Crumbl’s first site at the Rabbit Hill Crossing in Edmonton.
“There’s a lot of buzz around the brand. They do a lot of things incredibly well. Their social media presence is incredible. They have more followers on Instagram and TikTok than almost any other food provider. It’s crazy. I think they have 6.5 million followers on TikTok which is nuts. At one point, I think that was more than Starbucks and Nike combined. It may still be true today. A couple of months ago I know it was true for sure. Absolutely staggering numbers,” added Arndt. “They have a really strong brand presence.
“On top of that, it naturally appealed to our group. We all have young kids and it was a brand that just intuitively made sense to us. It was the kind of thing that we would be spending our own money. And it made a lot of sense. It felt like there was a real hole in the market for something like this here in Edmonton and in Alberta frankly.”
Image: Crubl Cookies
ZZA Hospitality Group has 11 Boston Pizza franchises – nine in Alberta, one in Whitehorse and one in Yellowknife.
“My dad got into the business 40 years ago this year. We’ve been doing that for a long time,” said Arndt. “That’s our background. We’ve a strong operations piece all through the province with that team looking after our Boston Pizza franchises.
“We had as many as 16 before COVID but we’re currently operating 11.”
Crumbl was founded in 2017 in Logan, Utah by Canadian dual-citizen Jason McGowan, and his cousin, Sawyer Hemsley.
It was love at first bite for Crumbl store owners Daniel, Andy, and Barry Arndt, Megan Moore, and Tamara Reich in Alberta.
Image: Crumble CookiesImage: Crumble Cookies
They said the appeal of Crumbl was obvious; a tech-driven bakery offering a fun, exciting, rotating menu was exactly what they were looking for in their next venture.
“We picked our first location in Rabbit Hill because we know this community well. Having a business in our own backyard also gives us an opportunity to support the local community. As we open our store, we are excited about opportunities to partner with schools and local groups to raise funds and strengthen the community,” the owners said in a statement.
The Colonnade at 131 Bloor Street West (Image: Dustin Fuhs)
Canadian real estate company Morguard Corporation is looking at adding some new high end retailers to two of its jewel properties in downtown Toronto.
Joy Emanuele Rabideau
Joy Emanuele Rabideau, General Manager, Toronto Urban Properties, for Morguard Corporation, based in Mississauga, said the company will be adding high end brands to The Colonnade and to the Holt Renfrew Centre as traffic and office occupancy continues to grow in the downtown following the COVID pandemic.
The Colonnade is the premier Bloor Street address for luxury retailers in Canada and home to Prada, Moncler, William Ashley, Cartier and Christian Dior. In addition, Hermes, Louis Vuitton, Montblanc, Tiffany & Co., Burberry and Gucci are steps away. The shopping complex is 71,479 square feet with 14 stores and services on two levels.
The Colonnade also includes 157 residential suites and three floors of office. It is home to Amal restaurant.
Rabideau said Salvatore Ferragamo will open there this year.
Future Salvatore Ferragamo (Image: Dustin Fuhs)
“And we potentially have another high end retailer to come to that property,” she said.
“We have right now vacant three spaces . . . The Colonnade is right on the south side of Bloor and St. Thomas. It’s in a really high end residential area. It’s really a great spot to be. They used to at one time call it the Mink Mile.”
Cartier at The Colonnade (Image: Dustin Fuhs)OTW at 131 Bloor Street West (Image: Dustin Fuhs)
Rabideau said there have been some retail vacancies in the area along with redevelopment and construction that have presented some challenges.
“But the great thing about the Colonnade is its name and the tenants we have. We have go-to tenants. Even during COVID, Cartier and Christian Dior, they were able to assist their customers. They had curbside pickup. They had people that would just order online. People who would just call them. The brands there are great and the services too.
“These are tenants that really provide high end customer service. They have great management staff. They have good infrastructure in their stores to support their customers. Great outlook and Morguard was a big supporter of all of them during COVID in any way we could assist them.
“The negative is some high end retailers had some fails. Like Escada failed. That was a name brand at one time and they’re no longer part of the Colonnade. COVID was not good to all of them . . . That was a negative for the Colonnade losing that big player but since then we’ve been working with another retailer to try and do another deal. That’s the upside.”
Bloor Street West (Image: Dustin Fuhs)Holt Renfrew Centre (Image: Dustin Fuhs)
The Holt Renfrew Centre is located in the prestigious Bloor-Yorkville area in Toronto. The property is well situated in the axis of the city’s east-west and north-south subway lines and is in close proximity to some of Toronto’s wealthiest areas such as Rosedale and Forest Hill. With over 6.4 million visits a year, the Holt Renfrew Centre’s sales surpass $994 per square foot.
The shopping centre is 274,915 square feet with total square footage of 83,989 square feet for CRU tenants. There are about 40 stores and services in the four-level centre anchored by Holt Renfrew and its 190,926 square feet.
Rabideau said Holt Renfrew is doing very well.
“We have a new deal – I can’t disclose it – that will be taking over the upper level of the former Zara and Fossil space. So our pre-construction (has started) on that space. It’s exciting news,” she said.
“Aritizia is doing very well there. Our lower level of the centre has suffered because of the volume of traffic in the GTA. When I first started this position in January 2022, office occupancy was about 16 per cent. It’s now at 38 per cent on average from Monday to Friday. Tuesday, Wednesday and Thursday are the busiest days for office occupancy.
“We’re doing deals in the lower concourse level and we have tenants like Laura Secord, Tim Hortons, Bell. Our traffic has gone up substantially.”
Holt Renfrew Centre Future Tenant (Image: Dustin Fuhs)
She said traffic for 2023 from January to March has increased by 33 per cent compared with the same period in 2022.
“We have some temp tenants, specialty leasing tenants, that we’ve done in the concourse that are high end retailers which we’ve been fortunate. So we do have some good news. The Flight Centre is doing well with people traveling all over the place. There is some action down there.”
BarBurrito, the largest quick service Tex-Mex restaurant chain in Canada, recently opened its 250th franchise location in the town of Edson, Alberta and then continued right after that with more openings as the brand aggressively rolls out from coast to coast.
Jeff Young, BarBurrito’s Chief Business Development Officer, said with 250-plus stores coast to coast the brand is the market leader as Canada’s largest and fastest growing Mexican food franchise.
“We’ll see another 90 units open this year. We’ve got strong demand for the franchise program not only with new franchisees coming on board but also with existing franchise partners,” he said.
Image: BarBurrito
“We’re also seeing tremendous growth south of the border. In 2020, we opened our first unit in the United States under the brand BurritoBar. So we pivoted on the name because of some trademark restrictions. We now have two units open in Michigan. Construction to start soon for a third location. We’ll be starting construction soon in Delaware.
Jeff Young
“We’ve done a number of single and multi-unit deals throughout the entire United States throughout a number of States, really from coast to coast. What we’re particularly excited about is the interest in our master franchise program and we are in quite advanced conversations with a lot of very sophisticated franchise groups who are interested in becoming our masters with actually quite a number of States and territories throughout the United States.”
The brand currently has 255 locations as of April 24.
Colette MacLean, VP of Marketing, for BarBurrito, said the brand’s first location opened in 2005 in Toronto. The first franchise location opened in 2009.
Colette MacLean
“And from there it was really exponential growth,” she said. “Hit 50 locations in 2017 and then it was 100 in 2019 then 150 in 2021 and the big year was last year when we actually opened 75 locations in 2022,” she said.
“We’re going to hit well over 300 before the end of the year probably.”
MacLean said there are a number of reasons why Canadian consumers love the brand including the freshness of the food and its variety as well as the company’s loyalty program which is unmatched by other brands as to how many times a customer has to visit in order to get some free food.
The franchise, which is comprised of locally-owned and family-operated locations, serves fresh ingredients and offers vegan, keto, and gluten-free options.
Image: BarBurrito
Young said a typical size for a BarBurrito is anywhere from 1,000 square feet to 1,500 square feet with the average about 1,200 square feet.
“We’ve seen particular success with grocery-anchored shopping centres and in particular we’ve seen tremendous success in the smaller communities. Where the Chipotle’s of the world will focus on the major metropolitan areas, we’ve seen very, very good success in tertiary markets, even markets as small as 10,000 population or less,” he said.
Young said real estate decisions are made on strong signage in areas, good accessibility, and good tenancies.
“We want to be in strong retail nodes,” he said. “We do particularly well in the suburban communities where there’s lots of rooftops and I think the fact we do anywhere from 20 to 25 per cent of our business through the delivery aggregators that really lends itself towards that. That’s a particularly important area of our business which also speaks to the fact that traditional malls do not work simply because the delivery aggregators do not service food courts necessarily. What we’ve seen over the last several years is traffic count dwindling in malls.
“So that’s where the suburban, tertiary markets have served really, really well with our brand.”
barBurrito Interior (Image: barBurrito)
Young said the company sees huge opportunity in the Quebec market. It currently has three stores in operation in that province including downtown Montreal.
“It’s a big and important market for us. So we are market ready. We see a lot of upside potential in Quebec, in particular,” he said.
“All the 250-plus stores we have are traditional stores – a traditional in-line part of a shopping centre environment with seating. Where we’re getting a lot of activity and interest in our business is in the non-traditional channels. What I mean by that is the petroleum channel with a (convenience) store component to it, campus settings, airports, hospitals and this is where I see a lot of significant growth in the future in addition to our traditional model.”
MEC at Square One Shopping Centre (Image: Dustin Fuhs)
Recent news of Zellers opening shop-in-shop stores in The Bay has shone a spotlight on an interesting trend in the retail industry.
More big box retailers are creating spaces within their stores to house other brands with a dedicated and branded area. Besides Zellers, other well-known initiatives such as this include Walmart providing space for Sleep Country, MEC in The Bay and Petco in Canadian Tire stores.
“With this continuously changing retail landscape, we expect to see more collaborations as businesses adapt to new consumer preferences and shopping habits. However, the right target audience is crucial for a successful shop-in-shop alignment,” he said.
“Co-branding opportunities are always a good idea, provided that increased brand exposure is in with the right partnerships. If you have a shared or common customer base, that bodes well for both partners. Some lower operational costs can be involved; you are not building out full stores. And obviously, there is the opportunity to test new markets where you may not be sure about your brand’s appeal.”
Canadian Tire and Petco Shop-in-Shop (Image: Canadian Tire)
Minakakis said the host store can attract new customers to a department store with the right shop-in-shop brand.
George Minakakis
“However, it has to be a brand experience that mirrors your or the ambitions of your next customer experience. It is about added value and has to be right; otherwise, you will have wasted space if it isn’t driving revenue. Shop-in shops work best when the host brand offers multiple such experiences in the store. It can work if you tell an aspirational story with these brands. Everyone wins in that kind of environment,” he said.
“I have seen a lot of shop-in-shops globally. The future adoption of this concept is very healthy and will remain a staple diet of retailing. As to where else could we see this concept in the future, it all depends on the creative nature and attraction of the host and how brands want to reach their customers on a lifestyle basis. We could see brand shops around sustainability, health and wellness, artisanal and theatres. On the technology side, there are many opportunities with a Metaverse (one day) and even with gamers. And then, we should ask how does the inclusion of AI and robotics play out in a shop-in-shop environment? Ultimately the focus should be on creating memorable customer experiences because many retailers have been distracted and strayed from the fundamentals of physical retailing.”
Minakakis said typical arrangements for shop-in-shop deals can get a little complicated.
“It all depends on who approached who? If a retailer is approaching a luxury or higher-end premium brand, the terms could be more favourable. Usually, you will find a mix of monthly or annual fees, percentage rent, or a combination. And there are also licensing opportunities where a brand allows its name to be used, and the host themselves operates it. Most higher-end brands will have their own staff to protect their brand. Within this, I would also add an expectation for staffing, training and full-blown customer experience representing the brand,” he said.
MEC at Hudson’s Bay Queen Street (Image: Dustin Fuhs)
“Why? Because we will always have retailers or service providers who have traffic and those that want it – those that have too much space and those looking to expand distribution. The partnership offers retailers a chance to use less than productive space more efficiently and surprise and delight existing customers with new complementary offerings. It also allows partner retailers (the shop within the larger store) to test bricks and mortar concepts to reach potentially new customers. An example is MEC in Hudson’s Bay stores. We are also seeing several digitally native brands use this method to jump to bricks,” he said.
The benefits for the shop-in-shop include lower risk and lower cost exposure to new customers through host shop traffic. It also offers an affordable test of bricks concepts.
For the host retailer, the benefits include enhanced use of low productivity space, bringing in new customers to shop. The idea could surprise and delight existing customers. All could equal more revenue through rent/commission on sales.
Winder said possible places where the concept could be adopted include amusement parks, entertainment venues, sporting events, mass merchandisers, EV charging stations, grocers, airports and more.
“Wherever there is traffic of complementary customers,” he said.
Zellers at Erin Mills Town Centre (Image: Erin Mills Town Centre)
Michael Kehoe
Michael Kehoe, Broker/Owner of Fairfield Commercial Real Estate in Calgary, said the shop within a shop concept is gaining momentum and is a proven formula that has been in practice for generations.
“The shop within a shop format provides retail space opportunities in a very competitive space environment that are typically in urban, high traffic shopping centre venues that are often within a major department store,” he said.
“The shop within a shop can absorb surplus or under-utilized space within the host retailer and can drive consumer footfall to or through the host retailer space.
“Rent structures for a shop within a shop vary, however many are sales performance driven (percentage of sales) along with a payment of a proportionate share of utilities, property taxes and sometimes other operational costs.”
Kehoe said many large format and category dominant consumer space users are in transition and reducing their physical footprint and he believes that the trend will become more widespread.
“The concept is dependent on the host retailer securing a complimentary and compatible co-tenant, think of the large format pet store that adds third-party pet grooming, doggie day care or veterinary services,” he added.
Sleep Country Express at Walmart Canada (Image: Sleep Country)
Stewart Schaefer, President and CEO of Sleep Country, said the experience with Walmart has been “wonderful.” The first store opened within a Walmart in 2021. Today, there are 17 stores. The first 10 stores were 450 square feet. The next seven were 750 square feet.
Stewart Schaefer
“In a given year in our almost 300 stores we get less than two million visitors a year . . . One of the reasons we wanted to be with Walmart that worked well for us is that they get over two million people that go into any given one Walmart on annual basis,” he said
“We strongly believe with half a million people coming into Canada on an annual basis, who knows if they know the Christine Magee (founder) ‘why buy a mattress anywhere else?’ we’ve all been hearing for 29 years. And a lot of the newcomers that come to Canada will go to brands sometimes that they just feel comfortable with and are a bit more international. Like a Walmart. Like an IKEA. We think introducing our brand in these small pop-up stores is also a wonderful lead generator for our big stores. You can transact in these small stores but it definitely has driven a broader customer segmentation to our stores.
“People always think Sleep Country is mid to high end. They don’t realize that our mattresses go from $299 up to $5,000 and the biggest part of our business that we transact is below the $1,000 price point. Being associated with Walmart, gives us a little bit of even more equity that Walmart is all about quality and price and they wouldn’t have partnered up with us if they didn’t think our prices were good and this was a great way of sending that message also subliminally.”
Schaefer said over the next few years the company could potentially be in 100 Walmart stores. The arrangement with Walmart is a combination of a rental fee Sleep Country pays Walmart and a percentage of sales.
Sleep Country Express at Walmart Canada (Image: Sleep Country Canada)
In a statement, Stephanie Fusco, Senior Manager, Corporate Affairs of Walmart Canada, said the chain is focused on becoming a modern retailer that provides customers with access to a broad ecosystem of products and services when they choose to shop there.
Stephanie Fusco
“As part of this initiative, we’re exploring different ways to collaborate with brands in-store and online to provide our customers with even more choice. In some cases, you’ll see these brands in a dedicated area on the sales floor, in a licensed space along the edges of a Walmart Canada store or, digitally, in our online Marketplace,” she said.
“Customers who shop with Walmart Canada will experience both our license program that includes “store in a store” concepts and an online Marketplace that allows brands to sell directly to our customers.”
For example:
When customers shop in-store, they’re able to access brands and services such as Sleep Country, Wine Rack, The UPS Store, Regal Nails and SmartStyle hair salons.
Walmart Canada has several restaurant offerings, including McDonald’s.
With continued focus on healthcare, Walmart Canada has over 75 Jack Nathan Health medical clinics in store.
For customers shopping online through its Marketplace offering, they’ll see an assortment from top brands like General Electric, Claire’s, Pajar, As Seen on TV and Zwilling.
“Along with providing more choice to our customers, this approach allows brands and services to go beyond their traditional reach and sell directly to or engage directly with our Walmart Canada customers,” added Fusco.
Retail giant adidas is rolling out its newest store concept The Pulse for value seeking consumers in Canada with four locations coming to the retail landscape this year.
“Like the heartbeat of the sporting community, welcome to Pulse,” said Lesley Hawkins, VP of retail for adidas Canada. “It’s going to offer an elevated experience with commercial products along with a focus on activation and promotion. It will be our premium factory outlet concept for the foreseeable future.”
Mirabel Landing Zone (Rendering: adidas)
Hawkins confirmed the following adidas stores in Canada are being launched in the new The Pulse concept:
Montreal Premium Outlet, Mirabel QC – existing 6,000 SF Premium Factory outlet store will be expanded to 8,000 SF and moved to the new Pulse concept – June 30;
Toronto Premium Outlet, Halton Hills ON – existing 5,100 SF Premium Factory outlet store will be expanded to over 9,000 SF and moved to the new Pulse concept – November 16;
CrossIron Mills, Calgary AB – existing Brand store will be over doubling in size to just under 10,000 SF and moved to a Premium Factory outlet with Pulse concept – November 16; and
Dartmouth Crossing, Nova Scotia – a completely new Premium Factory Outlet store opening October 1.
Hawkins said adidas is opening an over 10,000-square-foot Pulse in Dartmouth. The retailer currently doesn’t have any presence east of Montreal.
“We’re really excited to enter the Atlantic provinces and particularly into Nova Scotia,” said Hawkins.
Mirabel Fitting Rooms (Rendering: adidas)
Lesley Hawkins
The new Pulse concept will include both full-service and self-service areas.
“The value consumer has very different shopping styles. Not everybody wants self-service, so we’re really trying to make sure that we adjust our shopping experience to match the demands of the changing consumer,” said Hawkins.
“A lot of what you’ll see in the design elements are a little bit more premium finishes that we would have had . The addition of some modular fixtures that are really quite flexible, so as new collections drop, as we find products that are of higher demand, there’s high capacity fixtures to meet that demand. So it’s really that elevated experience with a commercial product offering.
“We haven’t yet rolled out our plans for 2024 and 2025. But as we continue to grow our Factory Outlet fleet or renovate existing doors, it will all be within The Pulse concept. It will continue to be for the foreseeable future for the value consumer.
Granville adidas Facade (Rendering: adidas)
In addition to the introduction of the Pulse concept, adidas is also introducing their next generation concept for the Originals brand – The Collection.
“The Collection is our next generation of concept for the Originals. With The Collection, that’s really the space that curates the moment, captures the culture, sort of talks about the past combined with our future vision,” said Hawkins.
Granville adidas Sales Floor (Rendering: adidas)
She said the existing 3,000 SF Granville Street Originals store in Vancouver is expanding to 5,000 SF and moving to the new Collection concept as of July 21. In addition, a new 5,800 SF Originals store will open August 18 at The Well, a massive mixed use development in downtown Toronto.
“In our key city of Toronto and key city of Vancouver, both of them will have a larger Originals presence with the new Collection,” said Hawkins.
Since Covid-19, Jennifer Thomas, the Senior Director of National Speciality Leasing with Morguard, has seen a demand for short-term leasing for brands and she does not see the trend winding down. Thomas talks about the future of speciality leasing in Canada, how we compare to other countries, and what makes a pop-up successful.
Jennifer Thomas
“After the pandemic, we saw an incredible surge of inquiries for pop-up space coming from specialty retailers, local retailers, and national brands – it was more interest than we had experienced in a number of years,” says Thomas. “We went from having vacancy concerns to quickly having limited space in some centres, as we found that pop-ups were the solution for many brands coming out of the pandemic. I believe we are going to continue to see strong demand for pop-ups in 2023 in Canada and we are also going to see an increase in brands offering more interactive experiences to drive traffic.”
In the past Thomas said pop-ups were used for experimentation with new locations before brands committed to a long-term lease, but since the pandemic she has seen a push to support local and pop-ups became a great way to bring local brands into shopping centres. As smaller businesses were impacted more because of the lockdown, Thomas said local brands have been looking for a new way to showcase their products and she has seen a surge of small businesses interested in specialty leasing because of this. Thomas has also seen an increase of online brands using the same concept.
Smash + Tess at Coquitlam Centre (Photo: Smash + Tess)Smash + Tess at Coquitlam Centre (Photo: Smash + Tess)
“Online companies started looking for locations because they wanted to merge their online presence with a physical store. Brands that were traditionally online were now altering their business strategy by coming to us to experiment with short term leasing. They saw value in offering traditional face to face services, being able to fulfill orders in-store and increasing their brand awareness – it caught us off guard because after a strong surge in online sales during the pandemic, we were pleasantly surprised that these retailers were recognizing the value of having a physical location in addition to their online presence.”
A traditional store Thomas says is usually up for around three months or less, but varies with each brand, but she is also seeing an increased amount of brands staying longer compared to before the pandemic.
Why is Canada Specialty Leasing Different?
When comparing Canadian pop-ups to other countries, such as in Europe or Asia, consumers might notice the difference and wonder why we don’t have the same experiences. For instance, Balenciaga’s pop-up in London has pink fuzzy interiors, Adidas store in Spain is created to look like a shoe box, Tiffany & Co opened a short-term store in Los Angeles and is designed as its blue gift box, Dior’s pop-up in NYC is designed as a perfume bottle, and Polestar opened its first specialty store in Finland and the building was made out of snow and ice.
There also have been instances where luxury brands, such as Louis Vuitton and Dior, have used handbags as a design for its storefronts. We have also seen several brands use digital storefronts to increase consumer engagement – so why are we not seeing this creativity in Canada?
Thomas says pop-ups internationally are designed to be “visually striking, Instagram worthy, and to drive traffic” and says this happens in Canada as well, but on a smaller scale due to the lack of budget. She also suggested some brands in Canada look at specialty leasing as only a revenue generation and not as a marketing tool – and “it needs to be both.”
“International pop-ups benefit from large marketing budgets and grand installations, which we traditionally don’t see in Canada. There seems to be a different focus on budget here, which makes it challenging for our brands to compete with international ones. We also don’t have the urban density in Canada that they do overseas and that is why we see these elaborate experiences internationally versus here such as a giant purse pop-up, or brands using AI to create amazing spaces – but this doesn’t mean we can’t be successful here.”
The Specialty Leasing Potential
Daniel’s Chai Bar at Bramalea City Centre (Image: Jonathan Lewis / Jonathan Productions)Hilary MacMillan Pop-up at The Colannade
Thomas says even with a small budget, the key for pop-ups to be successful is to be more interactive.
“They need to focus on creating unique and engaging experiences for shoppers. Pop-ups have evolved now to create more of an opportunity for shoppers and provide them with unique offerings and new experiences, and it is going to continue to be trendy going forward. Brands need to create something that consumers will associate with the brand, create a memory, and get the consumer involved.”
Thomas suggests brands create artistic components or a photo wall for consumers to share their experience on Instagram. One pop-up concept she mentioned was Pick-Me-Up by MilkUP, a pop-up shop in Toronto in 2021 where instead of paying with money, consumers would pay with a social media post. This is one example how the brand was actively engaging with consumers and using the concept as an interactive marketing tool. Thomas said this is one trend, paying with media posts, is becoming popular. Thomas also recommends brands to create a personalized or memorable experience in Pop-Ups.
Nudestix Pop-up at The Holt Renfrew Centre (Image: Morguard)Nudestix Pop-up at The Holt Renfrew Centre (Image: Morguard)
Pop-ups failures are usually because the brand fails to provide a unique consumer experience, are too fast establishing a viable business model, are in the wrong location, or over-stay their welcome.
“Brands can sometimes get excited and they open for too long. We all know that pop-ups create this sense of excitement and urgency and sometimes that gets diluted. If a brand pops up for too long in a shopping centre, they overstay their welcome. So we have seen a lot of success for brands that pop in and pop out. They know the duration and know when the novelty wears off, then it is time to move onto the next location.”
As pop-ups continue to be a popular trend in Canada, Thomas recommends brands to make sure they have a strong marketing plan, right location, right products, and always have an interactive component for consumers. Just because we can’t compete with international speciality leasing does not mean we can’t use the same ideas but on a smaller scale.
Nordstrom at CF Toronto Eaton Centre (Image: Dustin Fuhs)
Craig and Randy Harris, President and Founder of Trendex North America, discuss the success of international retailers entering the Canadian market at a challenging time for the economy. That includes Nordstrom exiting Canada, and some success stories.
The Interview Series audio podcasts by Retail Insider Canada are available on Apple Podcasts, Stitcher, TuneIn, Google Play, or through our dedicated RSS feed for Overcast and other podcast players. Also check out our The Weekly audio podcast where Craig and Lee discuss popular content published on Retail Insider which is part of the The Retail Insider Podcast Network.
Nordstrom Rack at One Bloor Closing Sale (Image: Dustin Fuhs)
Transcript:
Announcer This is a Retail Insider Podcast. You’re listening to the interview series.
Craig Patterson Welcome to the Retail Insider podcast. I’m your host, Craig Patterson. And we’re joined here with a special guest, Randy Harris. He’s president and founder of Trendex North America. Welcome, Randy.
Randy Harris Thank you. It’s nice to be here.
Craig Patterson And we’re going to talk a little bit today about the Canadian retail clothing market. And we’re going to go over some discussion points here that are quite interesting, including some of the problems we’re seeing in Canada. So where would you like to begin, Randy?
Randy Harris Well, first of all, I’d like to begin by talking about some concerns that I have with analysis that are being done of the Canadian clothing market in general and Nordstroms exit in particular.
Craig Patterson What concerns with retail analysis? Are you seeing?
Randy Harris There are a number of organizations that are in one way or the other have skin in the game when it comes to the $33 Billion Dollar Canadian apparel market, and from my perspective, they are all failing the Canadian apparel industry.
Craig Patterson Are there any general groups or organizations with skin in the game that you’re thinking of?
Randy Harris The first group is made up of financial analysts in the majority of newspaper business writers, which failed to engage in critical financial analysis.
Craig Patterson Is there anything specifically that makes you disappointed in Canadian retail reporting?
Randy Harris This is a group that unfortunately, based on their track record, refuses to speak truth to power when it comes to a retailer.
Craig Patterson Really?
Randy Harris When was the last time Craig, any analysts wrote a negative report about a company asked a probing question to a CEO doing a quarterly presentation, or heaven forbid, suggested that a company’s stock be shorted? When was the last time a publication ran a negative story about a retailer before it folded, including Sears, Dialects, Le Chateau, etc?
Craig Patterson Why do you think Canadian retail journalism has gotten to this point?
Randy Harris There are two reasons for the situation, I believe. The first is Canadians are nice people in a small country. And there is a perceived need for everyone to play nice in order to get along. This is partially accomplished by not saying anything negative. The second reason is that publishing a negative review or article about a retailer runs the risk of the company that is being profiled calling its advertising or investment business.
Craig Patterson Wow. And have you seen any instances where politeness or advertising has been pulled?
Randy Harris Personally, I can identify with his concern is that seven years ago, after writing a very negative story about Sears Canada, I was personally sued by $6 Million Dollars, by Sears Canada, a long story, but in the end, they grabbed their suit. So I personally experienced this kind of intimidation. So I it’s my understanding that a lot of retail writers in particular are very nervous about what they put in print about the big retailers in Canada. I don’t think that’s a known fact. And it’s ever really been said before in the way I’ve just said it.
Craig Patterson But you mentioned there were two groups who were they?
Randy Harris The second group that’s not doing the job is made up of Canadian retail consultants, and to a lesser degree, retail survives, who are intellectually lazy, and that they feel failed to keep up with the industry data in 95% of the cases they make comments that are not true. This is a group who is made up of people who last year said that Ecommerce will take over from a retail brick and mortar that certainly is not the case. But had they looked at the statistics they would have seen. It was a one year phenom. Apparel prices are going up your own publication last fall did an interview with the man who talked about rising prices for apparel, last year apparel prices in Canada went up 0.8%. That’s the fifth year in a row they didn’t go up. So when someone writes a story and says there’s inflationary pressures in the apparel industry, they have not looked at the data.
Craig Patterson What other retail experts were concerned with?
Randy Harris Another person who says recently up price retailing is failing in Canada. I’m sorry. When you look at the CEO of TJX and the factory outlet malls are focusing on the better product areas. They’re growing tremendously. So there is no data that they quoted in that story, that said that factory outlet or off price retailers fail and lastly, some woman had the temerity to say that she was proud of Zellers coming back and they would be a strong new participant in the market because of a nostalgic factor. And that Canadians would flock to fellas because of nostalgia. Now, I asked you, what is the nostalgic factor associated with Zellers men’s underwear?
Craig Patterson Yeah, I’m not sure how Zellers nostalgia would play into men’s underwear, Randy
Randy Harris Being facetious, I hope, you know that! I think that was the most insane comment. I’ve heard
Craig Patterson Was there something more about the retail expert group that was concerning with Zellers?
Randy Harris This is the same group that lifted why some foreign retailers in Canada fail without 10 times more, noting those that succeeded.
Craig Patterson Oh, so why didn’t the larger successful foreign retailers get mentioned and just the failures?
Randy Harris Why didn’t as much larger group fall victim to consultant who would say that retailers fail? In Canada because of logistical challenges, differences in consumer case, economies of sale, and a lack of understanding of the competitive framework in Canada. A recent article in your publication lifted those four reasons why American retail fail. All of these reasons might be valid. If and this is a biggie if foreign retailers were operating in 100 cities across Canada, but in fact, they’re only operating in four to six markets. So tell me what is the difference between a Canadian consumer in Toronto, in Ottawa and in Vancouver, when it comes to their needs, wants and aspirations? The answer is there is no difference.
Craig Patterson Hmm. Are there any other groups?
Randy Harris The last group that I’m concerned about that’s failing the industry is made up of two large Canadian Associations, who will remain nameless, who coincidentally are having large member meetings during the next 60 days. Both events they’ll look include any speaker who might draw the offense of any Association member. So basically, they don’t invite anybody that might threaten a member. Hopefully, the preceding rant will provide some context for my comments during the rest of the interview. Bottom line, at least the apparel industry needs to critically evaluate all of the old wives tales that permeate the industry, and engage in more fact checking before making comments. Like why do so many American retailers fail in Canada?
Craig Patterson This is fascinating. And I want us to be honest about things here with retail Insider, and with this recording here. So let’s dive a little bit more into this because I do want to talk about this. And I want to be honest, I don’t want to be one of those journalists or people that are interviewing someone who is trying to sugarcoat things here, and I may be somewhat responsible for that here now. And then as well, I think we all are as nice Canadians, but the reality is there are challenges out there. And you know, let’s be honest about it. So I’m curious, where do you want us to? When are we gonna go next with the conversation, Randy?
Randy Harris Well, I think the first thing we have to talk about is, is Mark Cohen’s comments about the fact that international retailers who jumped the borders are not successful. And that’s exactly what he said and he gets 100% wrong. There is no doubt about it. When you look at Canada, we have 140 apparel retailers that are foreign owned that are operating in Canada. 140 not 4 what do you say about people who talk about Uniqlo, H&M, Inditex, they’re not suffering. They’re all over the world. We take people like footlocker in Canada does a very good job. And then we can keep going. The largest apparel retailer in Canada is Winners. The sixth largest is Old Navy. Now tell me what is the difference between what Old Navy sells in Canada, or the Gap and what it sells in the United States, there is no difference. There might be one style, there might be two, the Canadian consumer is the same as the American consumer. And it’s becoming more so because of Generation X and Y, who’s influenced by the same influencers and feeds the same commercials and goes into the same stores. So this whole idea that there are differences in the market is baloney. There might be when it comes to Canadian Tire, there’s no doubt about it. But when we’re talking about apparel, There’s more foreign retailers in the apparel segment than in any other segment of the Canadian market in the 90% are successful 40 new foreign retailers apparel have entered the market in the last five years. I get that from your statistics, by the way, every January. So I’ve thank you for doing the research for me on that. Thank you. But I always give you credit retailing.
Craig Patterson Oh Thank You. Yeah, we tried to I hope we get them all to we tried to build that list
Randy Harris But you really do, so it’s a myth. There’s two myths. One is that foreign retailers don’t cross the border successfully. And the second reason is all these so called differences between Americans, and Canadians in particular do not really exist. So I think that was the point of my story. Or what I wanted to say, in the reasons that Nordstrom has left the market are also being mischaracterized, I believe, there’s no doubt that they should have never opened free stores in the Toronto GTA. That was a major mistake. I think the other thing that people are not taking note of, but if they go back and Google it, they’ll see it is that the minute that Nordstrom announced that they were coming into the market, both Holt Renfrew and Harry Rosen embarked on a multimillion dollar program to upgrade their facilities and their capabilities. And I don’t think that the people at Nordstrom saw that coming. They underestimated two of their key competitors. They also under estimated from my standpoint, the amount of foreign competitors that would have come in over the next seven years, all of these foreign competitors are coming in are nibbling away at the north at the market segment that Nordstroms is targeting. So I think that has a lot to do with it. COVID restriction certainly hurt. And lastly, there was a big decline of you know, in foreign tourism. And I think that that affected Nordstroms because a lot of foreign tourists, like from Japan had never been into a Nordstrom store. We’re aware of it. So they added to it. But once the COVID crackdown came in, they couldn’t go there. So basically, Nordstrom failed, for a whole reason, for a whole number of reasons, kind of like the alignment of the planets. But I don’t think it had anything to do with their service levels. Or their pricing. I think it had to do with much bigger problems. And that had to do basically with the competition, including Harry Rosen, Holt, Renfrew, and all of the new foreign retailers coming in the market.
Craig Patterson And that includes some of the brands that you can find in a Nordstrom store actually opening their own standalone stores.
Randy Harris Absolutely. Absolutely. I 100% agree with what you just said. And normally then that IQ and the other thing that happened is the incredible upgrading. And I don’t know how to quantify this of the mall Yorkdale over the last five or six years, that really has become a magnet. And when you talk about the luxury market in Canada, I’m beginning to talk about four segments Vancouver, Toronto, particularly down on Bloor Street Yorkdale Mall in and of itself. And then the rest of Canada, whether that be Winnipeg or Edmonton or anything, and I’m convinced that in the end, that’s a pie that’s going to be divided into four pieces. I believe that Yorkville indeed, maybe by the end of next year will do the same amount of business in the luxury market, that downtown Toronto or even Vancouver’s done and I know nobody has said that. But I truthfully believe it with what they’re doing in terms of Yorkdale being such a draw for the luxury shopping consumer that it’s a tremendous threat to the downtown core in Toronto.
Craig Patterson Well, I, I absolutely agree with that. I mean, that’s my position right at the moment out the Montreal and I know Montreal and Vancouver and 2024 are going to be getting these shopping centers that both are going to have luxury stores. You’ve got Royal Mountain Montreal, which is going to compete with downtown Royal Mount to be in the middle of the island. You’re going to Oak Ridge center in Vancouver which is on the west side. So it’s sort of the inner suburbs of the city but it is removed from the downtown core. You would probably would see something like what we’re seeing in Toronto right now in terms of that Yorkdale dominance versus downtown.
Randy Harris It depends on who goes in there. I’m not sure that in the end, that either mall expands to luxury zones, expensive luxury area in those cities. It makes it more convenient for shoppers to go there. But whether it actually adds plus business, I’m not sure at this point. And I don’t think anybody really does. I think they hope it adds plus business. But I’m not sure it just makes it easier for those people to go shopping. And that’s what I thought Yorkdale was going to do for a while. I thought it was going to take away from downtown, slowly. But now I believe that it’s actually becoming such a destination that will add plus business in terms of expanding the market.
Craig Patterson So there’ll be more high end retail sales in the Toronto market versus there being two nodes of luxury that are competing with each other.
Randy Harris Yes, absolutely. Very interesting. Now, do I have any? Do I have any data? I mean, I’m the guy who’s preaching through this whole thing. You got to have data? The answer is I don’t have data. It’s just a supposition. Based on what I’m seeing happening at Yorkdale Mall and you’re article last week. I think it was last week early this week about sales in New York. Jamal just reinforced my thinking on that.
Bloor Street (Image: Dustin Fuhs)
Craig Patterson It is a threat. I live in the YorkVille area in the downtown core of Toronto and even though we are getting these luxury stores, I do know that if the stores are in, you know on Bloor Street or on Yorkville Avenue. And they’re also say at Yorkdale very often Yorkdale stores gonna be doing higher sales, even if it’s in Holt Renfrew as a concession. Not always.
Randy Harris Yes. And that always like, it’s interesting. It’ll be interesting to watch the dynamic going on. You know, it’ll be interesting to see and you won’t be able to share it with me, but I’m sure you’ll be able to find out when a company or a retailer has a store on Bloor Street and then they open something in Yorkdale Mall does that affect their sales down on Bloor Street? That to me would be one of the most interesting things to learn about retailing now.
Craig Patterson Oh, goodness. Yeah. Yeah, it’s I mean, we’ve got the luxury side of things. What about the off price, I mean, we’ve got Canada still have Saks OFF 5TH at least for now. And we’ll talk about Saks OFF 5TH without you after let’s talk about you but we’ve got the off price you got Winners, Marshalls, which are part of TJX group we’ve got Saks OFF 5TH, currently, Nordstrom Rack is still operating. But it’s been cleared out basically at the moment here and a few others out there too. But any insight into the you know, the lower price clothing that most Canadians are probably buying at this point
Randy Harris That segment continues to grow. Much like the fast fashion segment. So when you’re talking about our price, you have to also do a plus the fast fashion because in a sense, their pricing, if similar to their product is different. But they’re at the low and relatively low end of the market, meaning they’re above Walmart and Giant Tiger. But below The Bay in most cases,
Craig Patterson That makes sense to me. And speaking of I mean Walmart them, these are successful retailers, you’ve got Walmart in Canada, Costco is doing just a bang up business. I think we have more Costco stores per person in Canada, then there is the United States.
Randy Harris Yes, there’s 100 of them, and they’re doing wonderful. And Costco, probably not in 2003. But in 2024 will be one of the 10 largest clothing retailers in Canada. It’s getting very close. Yes. Out of sight out of mind. You don’t think about it as a clothing retailer, but they do the tonnage I’ll tell you.
Craig Patterson And then that includes the Kirkland brand, which is an in house brand for Costco, as well as I think they do have some other brands in there that they’ll just bring in random.
Randy Harris They’re getting more brands all the time because the manufacturers are looking for outlets to sell their product in used to be they’d hold their nose. And they wouldn’t sell to people like Costco but that’s changing. So it’s important that they develop additional channels of distribution, if you’re an apparel manufacturer, so you open your direct to consumer stores you go more online, you go every channel you can to try and build up your business.
Craig Patterson We’ve got some really successful outlet malls This is certainly something that the United States has seen for years but here in Canada now with a Toronto Premium Outlets. Almost at the latest brand I think opening will take a Bottega Veneta we’ve got many of the roles luxury brands at that mall. And we’ve got a few other of these outlet malls in other parts of Canada, the one in Toronto is by far the most luxury heavy, but nevertheless, we’ve got a few, each major city in Canada seems to have at least one of them.
Randy Harris And that is growing. And that’s why I find it found it surprising when somebody said the off price business in Canada is going down. And I’d say, Oh, contrary, it’s actually growing, when you look at the numbers for TJX, for Canada, and then you look at what’s happening in some of these outlet malls. And some of the higher end brands are going in there off price is a growing segment of the Canadian market, much like it is in the United States. And one of the things that’s interesting is that, as you know, Canadians, especially in the mid 90s, late 90s, really flocked to the United States to go to what I would call off price or factory outlet malls. There’s not the need to do that anymore. Because there are factory outlet malls now in Canada, and so that cross border traffic to go shopping gets dramatically declined. Because of that.
Craig Patterson That makes sense. I mean, we’ve got people traveling, and they’re probably traveling to have more experiences anyways. Now if we get the shopping here, in Canada, the same brands.
Randy Harris So the going back to one thing it’s going to help the luxury market, which I know that you’re very interested in personally, is the return of full stop of tourism. And I mean tourism from the Orient, if you will, that’s still not anywhere near where it was pre COVID. And until that it’s going to act as a, I call it an anchor and the growth of that particular segment of the market. So in two years, that won’t be an issue, it’s going to take probably a year to two years to get tourism back to the level that it was pre COVID.
Craig Patterson That makes a lot of sense. And I think they’re showing that to the Asian market, particularly Chinese is responsible for a very significant amount of spending on luxury brands, I think the estimates could be as high as 50%. At this point.
Randy Harris The inherent problem, though, for Canadian luxury retailers, is the boom in luxury apparel retailing within Canada itself, that everybody is opening up stores. Louis Vuitton opens one store every week in China. And so the availability of luxury brands has just exploded within China. That saying that I don’t understand yet. Is the difference in the pricing. So a Louis Vuitton first sold and Louis Vuitton Beijing is that cheaper or more expensive than a Louis Vuitton bag sold in Yorkdale? I don’t know the answer to that.
Craig Patterson Yeah, that’d be something interesting to look into. I’ve been told that some of the pricing and China’s been competitive enough that people would not be compelled to go elsewhere. Because that’s why we saw lineups. And you know, the short sale is a in Paris, that will be Louis Vuitton or in London. I mean, the pricing, depending on the currency fluctuations was something to consider. But it sounds like some of the brands just from what I’m hearing anecdotally are trying to have things competitively priced in China to drive sales, especially as people aren’t traveling. And as the market grows. And you know, many people in China don’t have passports in terms of being able to travel.
Randy Harris Yeah, that’s true, by the way. Another thought is I’ve talked to a couple of luxury retailers, not in the last year, but before that. And they they don’t talk nearly as much about Canada, as they do Toronto and Vancouver. So when they’re doing their strategic planning, they realize that there’s a whole part of Canada that they’re not interested in at all. So they tend to focus on what’s going on only in Toronto, in Vancouver. And I think that that makes a hell of a lot of sense.
Craig Patterson Those are the markets that seem to have a lot of luxury spending. It is interesting to be watching the Royalmount project in Montreal, which again, I’ve got all your plan that I wasn’t allowed to announce all the tenants but a lot of the retailers so the high end ones you see at Yorkdale are also on the floor plan for Royalmount Montreal.
Randy Harris It’s long overdue, I think. So I’m glad to see that it’s being done. So it was quite a nice article, though. I think that I read about that. And then I read you referred in the article to a report that had been done and I went and looked at that. So yeah, I’ve got a pretty good handle on what you’re trying to do there.
Craig Patterson I think it’s gonna be fascinating and same thing with OakRidge in Vancouver and it’s a little bit different because the Vancouver market already has a pretty strong luxury spending component to it. But with that now expanding or an eroding of market share downtown because the OakRidge this is going to be I think fascinating to watch in 2024 because that’s when these two projects gonna be coming online and the consumers can start shopping on these shopping malls?
Randy Harris And again, the question is, do these two shopping malls, add business? Or do they subtract business? Meaning from the current luxury areas? And we won’t know for a while?
Craig Patterson Yeah, my guess is it’s going to subtract a little bit. But that’s that’s just my gut, maybe more so from the Montreal market. I mean, Montreal does have wealthy people. The question is, where do they shop? Are they going to Florida, New York City, Paris. I mean, there’s, you know, that’s a thing to consider as well.
Randy Harris I’ve always thought that there’s just too much spending down in Boca Raton or Paris, then there is in Montreal itself. But again, I have no data to backup that option.
Craig Patterson No, no, no. One luxury retailer that came into Canada in 2016 was Saks 5TH Avenue. For those global I should say, for those unfamiliar, I’m sure everyone listening here would be but it’s a New York City based, you know, large format retailer, now owned by the Hudson’s Bay Company, interestingly enough, but to open three full line stores in Canada. I don’t think they’re doing so well. You had some predictions and some reports, basically, that Saks was probably going to be at least in your opinion, leaving Canada, do you wanna go into that a little bit more as a discussion?
Randy Harris Again, I don’t, I believe that in my heart, I just don’t see how they could justify it. Now it could be justifiable, because of the rents that they might or might not be paying, which could make it a little easier. But I’ve just never seen them be a major player in the market. And I also think they came in again, under estimating what Holt Renfrew was going to do. And I think that Holt Renfrew, has really stymied any possible growth that they might have. So I think their best thing to do is to just close it up and get rid of it, they still don’t have an Ecommerce site. In Canada, you have to order I believe, via the US site. And I just don’t see him making the commitment to Canada that they need to excel. They’ve also got an economies of scale problem, and that is they don’t have enough storage to really justify a major marketing campaign.
Craig Patterson And the plan had been for Saks 5TH Avenue to open I think up to 10 of those full size stores in Canada, I’m not talking about Saks OFF 5TH, for those unfamiliar, it’s a completely different division. It just shares a similar name is corrupted by the Hudson’s Bay Company itself. So where my understanding comes from, but in terms of these large Saks 5TH Avenue stores, I mean, I don’t know if you’ve ever actually gone on the record or gone public saying this, but I had been told in 2021, that in early 2022, the Calgary store was supposed to have been shut down. And I didn’t report on this. I was waiting for more signs of it to happen. And lo and behold, we’re here today it’s April of 2023. And that store is still open, but I was in there a few months ago and there wasn’t a lot of stuff in there wasn’t a very good store. Yeah,
Randy Harris I just think there to change. days are numbered in Canada. How soon know pulls a plug, I don’t know. But I’m, I’m certainly it will be gone within a couple of years, if not sooner.
Craig Patterson I think that would be sad. But you know, we got two standalone stores like I mentioned, Chinook Centre or CF Chinook Centre of Calgary, there’s one of the CF Sherway gardens in Toronto. There’s also a Saks 5TH Avenue, which is kind of awkwardly contained within the large Hudson’s Bay store downtown Toronto is the Simpsons many years ago, a big department store. But now we’ve got the Saks Fifth Avenue thrown in there, it’s gonna be interesting to see what happens if that store were to close in terms of how the space would be utilized.
Randy Harris I completely agree with you. And maybe they ought to tear the whole building down and put up 105 storey apartment building, they might get a better return on their money.
Craig Patterson That seems to be the Toronto way tear it down and build something really tall. I mean, it’s heritage protected. I would hope that God that would never happen. But I did see some proposals for a tower on the site. This is a number of years ago, and I don’t think it’s going to happen. But really, yeah, I mean, they would look to do something to somehow within the structural support of the current building that’s there because the the corner of Queen and Yong Street I believe was built in 1898. So it is a really old building, it was you know, expanded in phases to almost a million square feet in terms of the department store itself. But nevertheless, I mean, engineers have their thing to be able to figure things out maybe there will be a tall building at the back of the Hudson space or at some point
Randy Harris Will be poorly go I need to thank you for giving me this opportunity to vent. And I’d like to encourage and this is my commercial for anybody that’s interested in what I have to say to our to subscribe to our monthly newsletter called Canadian Apparel Insights. And you can subscribe via our website trendexna.com.
Craig Patterson Excellent, excellent. We’ll include the show notes as well. We’ll have a link in there for those that are coming to this podcast through our website. And again for those that are just coming into our Podcast channels. Definitely seek this out if you’re interested because it’s it’s really informative stuff you, Randy, you send us these reports regularly, I get them in my email and they’re always extremely informative.
Randy Harris Thank you. And I really appreciate working with Mario. He’s a peach. We get along very well. He’s very astute. He has good comments. But more importantly, he writes up what we I say to him perfectly. I really liked the way he summarizes what I say. It makes me look good.
Craig Patterson Thank you so much for joining us today. This is Randy Harris. He’s the president and founder of Trendex North America. Thank you so much for your insights here. You’re always telling us all kinds of interesting stuff. Very informative. Thank you, Randy, for joining us.
Randy Harris Thank you again for having me, Craig.
Craig Patterson And thank you, everyone for listening today on the retail insider podcast. I’m your host, Craig Patterson. I’m the founder, CEO and publisher of Retail Insider Media Limited, be sure to subscribe to our podcast and we’ve also got a video series which includes my face on it as well as guests. So definitely check that out here as well. Thank you so much, everyone. Take care and bye for now.
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Altitude Sports, an outdoor gear and clothing brand based in Montreal, is taking the lead in sustainability as it is making changes on how the company operates from its new electric delivery method to packaging.
This year, Altitude Sports has partnered with Courant Plus, the first sustainable delivery company in Montreal, as it is looking for new ways to reduce emissions. The new program is currently only available in Montreal and Alexandre Guimond, the Co-CEO of Altitude Sports, says they are hoping to deliver more than 110,000 packages every year which will avoid “approximately 45 tonnes of Greenhouse Gas in 2023”. The program was first tested last year by delivering 15,000 orders in Montreal and now over sixty percent of people in the city will be able to use the new service.
“Fully aware of the climate emergency, we continue to innovate to maintain our position as pioneers in our sector. We hope to inspire other e-commerce companies to make a significant impact towards a more sustainable economy. An appreciation for nature is part of Altitude Sports’ DNA, and it goes without saying that we must protect it. For us, that means aspiring to become a leader in sustainable e-commerce in Canada. By finding eco-responsible delivery solutions, we are taking a significant step towards achieving this version,” says Guimond.
Image: Altitude Sports
Courant Plus is using the first Ford-Transit electric vans and electric bicycles to deliver orders to people in the Montreal area, specifically in the “green zone” which covers 160 kilometers. Guimond says he decided to try this area first as it is very dense and about sixty percent of the population lives in the area. The use of bicycles will also help ease city congestion in high dense areas. Unlike large trucks, bicycles will not block sidewalk or street access, will produce no sound, no gas, and are easier to travel around the city.
Guimond also mentioned there are some streets where it does not allow traffic during certain times of the day – but do allow bikes, making it easier to deliver. The new delivery system will still come with fast delivery and will be free for orders $75 or more. The overall goal, Guimond said, is to deliver to its consumers without burning gas and will eventually take this concept to other cities such as Toronto or Vancouver.
“It is not changing the world or fixing climate change, but for us it is a big step and is strategic. We think about the people living here, it is a better experience, and we would rather see a bike delivering our products than the big truck sitting there. It makes so much sense environmentally speaking. When we were testing out the packages last year, we got amazing reviews. They said it was good, fast, accurate, and the experience for the consumer is just better than the regular carrier. So to us, it is a win – everyone appreciates it.”
Guimond says he hopes other businesses will start using the same delivery method as being sustainable, shouldn’t be a competition and is more about working together to make the world a better place for people, but should also know – Altitude Sports did it first.
Small Change, Big Impact
Image: Altitude Sports
Until last year, Guimond says they were using bubble wrap to cushion the delivery box so products don’t break during shipping. Now, Altitude Sports uses a new machine to shred them. The new machine shreds boxes that are damaged and can’t be used, protects the products the same way as bubble wrap, and has lowered costs for the brand.
“We pretty much paid off the machine in the first ten months and then it is only savings from there and it is great for the environment. Now we can shred slightly damaged boxes that we can’t reuse and use it as a filler. It made sense financially speaking and also great for the environment.”
Guimond also said they have also recently switched to paper tape and uses a machine in order to cut down waste – and so far, it has cut the amount of tape by 4100 rolls of tape. After realizing how much tape was wasted from cutting the wrong amount or throwing out tape because it got stuck together, Altitude Sports now uses paper tape and a tape machine that cuts the perfect amount needed – eliminating any excess waste.
“It is such a small thing, but because we ship so many packages it ends up to be a lot of tape. When you think about it, within a year we will not be using plastic anymore – it is amazing. The new paper tape is completely made of recycled materials and is recyclable.”
Future Plans
Image: Altitude Sports
Altitude Sports is always looking at new ways to improve its sustainability and to push themselves further every year. To motivate the team and to ensure consumers sustainability is always on their minds, Guimond says they are working hard to be B Corp-Certified where there will be a big audit where all departments at Altitude Sports will be discussed and will keep the company on its toes when it comes to sustainability.
“It is an external agency that will come and look at the GHG emission and waste management, so we will be working on this during the summer. I think it has the team super motivated and our goal is to pick up the certification next year and that is not going to be the end, it will be the beginning of a process where after that, we will have to submit every two years to show we are improving.”
Guimond says there are no physical store expansion plans happening within the next twelve months but in two years, he hopes to expand its digital platform internationally. To make this happen, over the next two years they will be perfecting its shipping, languages on the platform, and other logistics. Instead of expanding physical stores, Guimond says they will be focusing on improving the brand in terms of shipping, products, connection with consumers, and looking for ways to be more sustainable.
“It is time for action, and sometimes we overthink things and we think it is not going to be super impactful or we doubt ourselves. I think there is a way to do steps even if they are small and in a meaningful way and also a profitable one. I would like to be the leader in sustainability and sustainable commerce that is in the market and sometimes we compete against others, but also in the end, we all live on the same planet and we have to find better ways and we all have to start working together.”
Habitat28 at Toronto Premium Outlets (Image: Habitat28)
Canadian tiny house brand Habitat28 has launched its first Discovery Centre at the Toronto Premium Outlets Mall in Halton Hills.
Habitat28 was formed by a team of entrepreneurs passionate about housing affordability and sustainability issues and looking to provide an alternative housing solution that is eco-friendly, sustainable, affordable, yet stylish and with the latest technology and comfort features.
Aura Poddar, CEO, and Shailesh Poddar, COO, have been working on the project for a number of years.
The company was incorporated in August 2022 but the Poddars have been working in the background to build up the company to develop the product for about four or five years.
“We started out with the concept of a modern design, different design, a really nice design of a tiny house and we started looking on how to build it out and it took a long time in product development,” said Aura.
Habitat28 at Toronto Premium Outlets
Habitat28 at Toronto Premium Outlets (Image: Habitat28)
“I am a real estate agent. I have about 10 years of experience in sales and Shailesh has about 25 years of residential construction and commercial as well. We kind of piggy backed and built out on that background and the experience in real estate development and sales and that’s how we started the company.”
Habitat28 has a one-year lease with the mall with the hope that it will continue into the future. The Discovery Centre is about 400 to 500 square feet. Part of the Centre is activation as well.
“It’s a place where people can come in and they can experience the unit, ask us questions. We can create awareness to people about tiny home living, about being able to reduce your footprint, about being able to reduce your impact geographically and environmentally through sustainable living,” said Shailesh.
“It’s a place where people can come in and order. We followed the Tesla model where people would be able to come in and experience the car. With us they experience the unit itself. And they can sit down and talk with us about any of the questions they might have.”
Aura said Habitat28 has partnered with the Simon Property Group, one of the largest real estate companies in North America and owner of the Toronto Premium Outlets Mall.
“From the very beginning they were very on board with our idea. We showed them our unit. They loved the model and we came to them with the very modest idea of just having a pop up to raise brand awareness and in turn raise awareness about tiny home living,” said Aura.
“And after we met with their team, with their marketing and leasing director, it just morphed into having us there all the time. They loved the product. They loved the idea. They do have a very broad reach in terms of people coming to the mall. It’s one of the top malls in Ontario. People come from all over including from up north and other provinces as well as from the U.S. So we felt that instead of just being in a mall that has a very local smaller reach of audience, we wanted to be somewhere where we could reach more people and especially people that come from smaller towns in northern regions.
“This tiny home movement is much more closer to their hearts for them because cities are just getting on board. Smaller municipalities are much more open to it and they are embracing the movement because they do understand that they do need to give people more housing options and they do need to intensify the growth and the residential development. But they don’t want urban sprawl necessarily. They want to save the environment as well as attract new people. That’s why we chose this location.”
Habitat28 at Toronto Premium Outlets (Image: Habitat28)
Habitat28 at Toronto Premium Outlets (Image: Habitat28)
Shailesh said Habitat28 was born to take action on the affordability crisis.
“Our objective is to provide affordable housing solutions and we are trying to put out different models which will suit different needs of people. Habitat28 is largely about being able to give people housing freedom to choose something different – something that a lot of people have considered peripheral but is becoming mainstream now,” he said.
Aura said the number 28 in many cultures is a very lucky number, a wholesome number – adding two plus eight equals 10 and one plus zero is one.
“So that’s like a one, universal wholesome number. So we are standing a lot for the environment, for the planet. One represents we have one planet and we have to take care of it. We have one life. We have to do the best we can with it,” she said.
The first model is S28 which is 28 square metres or 301 square feet. It was built out with the idea that it would look and feel more like a hotel room, a luxury suite, rather than a trailer or some of the negative connotations associated with a tiny house size. The unique design has lots of glass and big windows, feeling open and spacious.
Image: Habitat28Image: Habitat28
Shailesh said the company is hoping to expand within Ontario and other provinces as well as moving into the U.S.
The placement of the Discovery Centre is providing Habitat28 with the stepping stone where it can further explore other locations.
Poppy Barley Vancouver West 4th (Image: Elina Kustlyvy)
Edmonton-based leather footwear and accessories company Poppy Barley has expanded into the Vancouver market with the opening of a store in Kitsilano.
It’s the brand’s third store in Canada after launching in Edmonton in 2017 at Southgate Centre and in 2019 at CF Market Mall in Calgary. The brand started in 2012 as an e-commerce business.
And the retailer, founded by sisters Justine and Kendall Barber, has plans to open next in Toronto followed by Ottawa.
Poppy Barley Vancouver West 4th (Image: Elina Kustlyvy)
The new Vancouver store is located at 2144 W 4th Ave.
“For us it’s a small store. It’s 1,200 square feet,” said Justine Barber. “We really thought it was the perfect location with great co-tenancies. So we went a little bit smaller. It’s ideal for our footprint.
“We really think it’s the best street in Vancouver for brand discovery. Cool new brands and it has a great mix of some very well-known established brands like lululemon and some really cool up and coming startups. It’s just a great shopping street.
“Compared to our other stores, we re-designed it. So because it’s been four years since we designed a retail location and since then we’ve updated elements of our brand aesthetic it has a mix of what we incorporated into our previous stores with our Poppy Barley blue and navy colours but it has a lot more warm, natural materials and wood than we’ve previously used.”
The Edmonton and Calgary stores are about 2,200 square feet.
“We think for us an ideal store is like 1,600 square feet,” she said.
Barber said the retailer always takes a look at a lot of data before entering a market. That comes from e-commerce revenue as well as a pop-up strategy where it will open for a few days in different cities.
“What we’ve seen before is once we get to a certain size within a city, growing a store opens our gross market share by 300 to 400 per cent. So we just got to the point in Vancouver between our e-commerce revenue and our pop-up revenue we knew that Vancouver was ready for a store,” said Barber. “And we started looking for the right real estate.
“It was hard. We narrowed down pretty quickly that we wanted to be on West 4th and then it’s a very popular street right now with very little for lease. We actually offered on a property that wasn’t on the market – that was softly available.”
Poppy Barley Vancouver West 4th (Image: Elina Kustlyvy)
Barber said the retailer plans to open a location in Toronto in 2024 followed by one in Ottawa.
What is it about the brand that resonates with consumers?
“I think it’s partly that we have a very remarkable product,” said Barber. “And as a product-based company, product is the most important thing.
“We also focus a lot on customer service and building customer loyalty
Poppy Barley is a female-founded, Canadian shoe and accessories brand from Edmonton, Alberta that stands for a new kind of luxury – fair prices on sustainably-made products you wear on repeat. As a certified B Corporation, Poppy Barley is rethinking the fashion industry to make it better for the planet, one sustainably-made shoe and accessory at a time.
The retailer’s name has deep meaning. Poppy seeds and barley corns were the original unit of measurement in shoemaking.
“The idea for Poppy Barley started when my sister was in Bali and went into a shoe store, tried on a pair of boots and she couldn’t quite fit them up over her calves and the guy took out a measuring tape and said let me measure your legs and I’ll just make the shoes to fit you,” said Kendall Barber, in a previous story with Retail Insider.
“So Justine just kind of thought why don’t we all make shoes that way. It makes sense that we can combine the craftsmanship of shoemaking with some technology to be able to make better fitting shoes for everyone. So that’s what started Poppy Barley. She came back to Canada. She enrolled me. Got me on board with her and the two of us set out together to create Poppy Barley.”
Poppy Barley Vancouver West 4th (Image: Elina Kustlyvy)
The retailer started as an e-commerce company.
“Very early on customers started asking us to see the products. We started by setting up a little table on Thursday afternoons where people could come and see the boots and the shoes. That eventually led to having a showroom and then from there we did our first store,” added Kendall Barber.
“Poppy Barley fills a unique gap in the Canadian retail landscape. The footwear market is crowded with cheaply-made, uncomfortable shoes or logo-heavy, preposterously-priced brand name footwear. Poppy Barley creates high quality shoes at a mid-market price point. We’re committed to invest in materials not markups. We’re not willing to compromise comfort or design or function or social responsibility. We’re the future of footwear.”
