A new global survey finds that customer loyalty actually drops when brands are slow to innovate, with millennials and Gen Z leading the migration away from those retailers.
The 2022 Commerce Innovation Report, from commercetools, also found that lack of commerce innovation negatively impacts customer experience and sales, and close to three-quarters of business decision-makers recognize that failure to adopt emerging commerce solutions will hurt their business.
Jen Jones
“With endless options and the power of the internet at their fingertips, consumers are continuously redefining what the ideal customer experience looks like. The brands with longevity are the ones that are taking this shift into account from both a technological and cultural perspective, and are evolving to meet customer demands,” said Jen Jones, Chief Marketing Officer of commercetools, in a news release.
“Change is constant in the modern commerce ecosystem. Brands need to be nimble and meet customers where they are. This means having a finger on the pulse of their customers’ shopping behaviors and adopting the commerce experiences that resonate the best among them. Anyone who thinks they can sit still and not evolve amid changing demands will be out of business shortly.”
Key highlights from the report, which surveyed 300 global retail leaders, include:
73 per cent of shoppers will take their business elsewhere if a brand’s commerce experience does not meet their expectations, and over half prefer modern commerce experiences, defined by evolving customer preferences, payment options, and digital devices;
45 per cent of respondents say they only dedicate a minimum amount of their budget to improving or expanding commerce capabilities;
74 per cent recognize that failure to adopt emerging commerce solutions will negatively impact areas of the business;
40 per cent of respondents say their company’s current commerce solutions hinder the sale of their products or services, and 49 per cent of this group feel this issue has existed for over a year;
Over one-third of businesses are struggling with the ramifications of an outdated commerce solution, signifying the impact a lack of innovation has on customer experience, sales, and brand loyalty;
52 per cent said they’ve decided not to implement a new commerce capability due to budgetary constraints.
Image: commercetools
The inventor of headless commerce, commercetools describes itself as an innovative technology disruptor that has established itself as an industry-leading e-commerce software provider. It is based in Munich, Germany with offices in Europe, Asia, and the United States.
“Businesses are beginning to understand that if they do not jump on trends and adopt the technology that enables them to provide these next-generation experiences at every touchpoint, then it will be impossible to remain competitive in today’s market,” said the company.
70 per cent said they’re most concerned about millennials, a cohort with over $2.5 trillion in spending power, taking their business elsewhere, followed by Gen Z (54 per cent) and Gen X (48 per cent);
Only 25 per cent of respondent organizations offer next-day shipping, and even less offer loyalty programs (21 per cent);
Despite customers expressing interest in a variety of payment options, less than half offer multiple payment methods, and less than 20 per cent of respondents offer one-click checkout (18 per cent), and even fewer (16 per cent) offer Buy Now Pay Later and cashback (14 per cent.)
Union Station Sephora (Image: Arash Moallemi / Sephora Canada)
“Sephora pioneered prestige omni-retail, and we know that continued investment in commerce innovation is key to our sustained growth,” said Sree Sreedhararaj, Chief Technology Officer at Sephora, in a statement.
The report said companies’ adoption of modern commerce features and digital purchase options lags behind what’s possible, and also what’s hoped for.
“Some decision-makers are excited to test new capabilities like purchasing in the metaverse or jumping on trends like NFTs. But Naysayers clearly exist among us — a vocal minority who don’t think their companies need to expand digital purchasing options or commerce features at all. We know they’re there, as loud and skeptical as ever. Whether you feel up to speed or behind the times, there’s no room in your organization for technologies that hold back your team and business,” it said.
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past 24 hours.
Old Navy at CF Toronto Eaton Center (Image: Dustin Fuhs)
Canadian spending, excluding automotive, increased by seven per cent year over year in August and was up 18.8 per cent from three years ago, according to the Mastercard SpendingPulse, which measures in-store and online retail sales across all forms of payment.
The report indicates spending has well surpassed pre-pandemic levels.
“As Canadians rounded out their summer with last-minute vacation plans and families preparing for the back-to-school season, it’s not surprising to see both an increase in retail sales and in-store spending,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Incorporated.
“You have very similar patterns going on in Canada and the US where you have a consumer that’s still spending . . . But when you look at inflation, at roughly seven or eight per cent, you’re essentially seeing very little unit growth and the consumer’s treading water relative to the real increase in spending.
“It’s not terrible. It’s a pretty healthy number. You continue to see the slowdown in ecommerce and people getting back into stores and getting back out and experiencing. So the trend we talked about last month, experiences win, people are wanting to get out. I think apparel continues to be very strong and that to me is about the freshness, the getting out of their sweat clothes and into parties and weddings. That to me is a trend that is continuing.”
Image: Mastercard SpendingPulse
Sadove said with food inflation so high fewer people are eating out these days.
The report found:
In-store sales increased (7.8 per cent YOY) with a significant surge in Apparel (37.4 per cent YOY) ahead of back-to-school season and it was up 18.8 per cent from three years ago;
Fuel and Convenience also saw an increase (18.5 per cent YOY), as consumers took their final summer road trips;
Home Furniture and Furnishings continued to see growth with sales up 12.8 per cent YOY (+30.8 per cent YO3Y) with Home Improvement sales up 11.7 per cent YOY (+24.9% YO3Y), a consistent trend since the start of the pandemic; and
With summer coming to an end and gas prices softening, last-minute road trip plans remained top of mind for Canadians with Fuel and Convenience spending up 18.5 per cent YOY (+32.8 per cent YO3Y).
The Mastercard SpendingPulse reports on national retail sales across all payment types in select markets around the world. The findings are based on aggregate sales activity in the Mastercard payments network, coupled with survey-based estimates for certain other payment forms, such as cash and check. The Mastercard SpendingPulse defines “Canadian retail sales” as sales at retailers of all sizes, excluding automobiles. Sales activity within the services sector (for example, travel services such as airlines and lodging) are not included.
Sadove said electronic sales were weaker because people bought everything they needed during the pandemic.
“But they’re still fixing up their homes,” he said.
“It’s really fascinating. If you look at 2022 and 2019, and you focus on what’s happened . . . and what you see is overall retail up about 19 per cent in the three-year period . . . Over three years, the consumer is more back to normal in terms of their consumption that they had longer termed trended on.
“Internet has grown. It’s about 12 to 18 per cent of commerce. So internet has gotten a lot bigger.”
Sadove said there has been a reversion to the mean and the trends that were taking place pre-pandemic are what people are experiencing now.
“You’re getting back to a more normalized environment and that’s where a lot of retailers messed up because they bought inventory, they assumed the world was going to continue the way it was and it didn’t. And it went back to more normal so they’re sitting on a lot of inventory of the wrong inventory,” he added.
Sadove said the consumer will continue to spend during the holiday season. They’re going to be under pressure. Inflation is hurting the lower part of the income levels. Many companies still have too much inventory so there will be plenty of promotions.
“My guess is the holidays will start earlier than ever because people will be clearing out some of those inventories. And if there’s freshness, new apparel, new items, new fashion, that will sell. People are still going to be out there buying their holiday gifts but they’re going to have to be making choices and they’ll be shopping carefully focusing on value,” he said.
“I’m concerned. You look at the numbers whether it’s the stock market or any of the markets, how the consumer is behaving, there’s a skittishness out there. And people are a little bit concerned so I think value is going to be an important word, promotions early, but continued spending. And omnichannel. Ecommerce even at four per cent growth doesn’t matter, it’s still 50 per cent, 60 per cent bigger than what it was.”
US-based fashion brand Aerie has launched its Offline by Aerie concept stores in Canada in Edmonton and Toronto. The brand focuses on athleisure and comfort clothing and will compete with retailers already in the market.
Offline launched in the US in 2020. The name is unique — according to its website, Offline references taking a break and “going offline” from such things as work, school and social media.
The female focused brand sells on a range of products including leggings, sports bras, tops, workout dresses, skirts, hats, bags, water bottles, headbands, socks and some footwear. Fabrics used in designs are said to be soft as well as sustainable.
Offline’s clothing is geared to those working out, going outside or even relaxing at home. Moving one’s body is encouraged as part of the marketing messaging, as is relaxation.
West Edmonton Mall – photo by Retail Insider
A range of colours and prints are available, including “feminine details that you won’t see from other brands,” according to the company’s website. Thoughtfulness went into Offline’s product designs, from thumbholes to pockets.
Offline’s first Canadian store opened at West Edmonton Mall in Edmonton last month and a second location was recently unveiled at Toronto’s Yorkdale Shopping Centre. The company would not provide Retail Insider an interview so we’re unsure what future locations are on the way — a sales associate at the Yorkdale store said she wasn’t sure either.
In the United States, Offline has more than two dozen stores in various markets and appears to be in expansion mode there as well. We’ll follow up as we continue to learn more about this new retail entrant into Canada.
Le Cartel at Foot Locker on Yonge Street in Toronto (Image: Dustin Fuhs)
Le Cartel, a Montreal streetwear brand, has partnered with Foot Locker to showcase its newest designs created by local artists.
The brand opened in 2015 in Montreal and since then has grown to include over 50 collections, three of which will be now available in 17 Foot Locker locations throughout Toronto, Vancouver, Montreal, and will also be available online. Foot Locker will be displaying Le Cartel under its Home Grown platform where Foot Locker showcases local designers in the US and Canada.
Behind the Brand
Le Cartel at Foot Locker (Image: Kevin Millet / Le Cartel)
The founder of Le Cartel, Pierre Sauvage, moved to Montreal from Europe and wanted to create a brand combining Europe with North America, something Sauvage said he has not seen before in Europe.
“I arrived in Montreal in 2013 and I was really impressed by this mix of Montreal. Montreal has a lot of festivals, vivid artists, and has a vibrant scene, so the idea was to mix these with fashion, and it was the first idea I had back in the days. The brand is about being someone from Europe arriving to Montreal and expressing the new city which is a mix between Europe and North America, a mix between French and English, and a mix of city vibes,” says Sauvage.
Le Cartel brings original fashion and collaborating with artists is the DNA of the brand as it has been using local artists since the beginning. When a customer purchases a product from Le Cartel, 10 percent of the proceeds go directly to the artist. The products from Le Cartel are all locally designed, and 50 percent of the products are made in Canada. It includes a variety of collections for men, women, and kids. Le Cartel’s price ranges are between 40 to 100 dollars.
New Partnership
Le Cartel at Foot Locker on Yonge Street in Toronto (Image: Dustin Fuhs)Image: Le Cartel / Foot Locker Canada
The Hall of Fame collection launched on September 16th. Customers can find the collection online at Footlocker.ca and in 17 Foot Locker locations throughout Toronto, Vancouver, and in Montreal.
“We have been working on this collaboration for 14 months, so it has been a big milestone for us to live. For the next couple of weeks and months we are focused on this and being stronger. We are already speaking with the Foot Locket team to see what will happen next year with the partnership.”
Customers can find a variety of clothing including hoodies, t-shirts, and hats. The collection will showcase three Montreal artists: Petiton, Epithumia Rose, and Farah Allegue.
Le Cartel at Foot Locker (Image: Kevin Millet / Le Cartel)
“The idea behind the collaboration between Foot Locker and Cartel was that we tried to go with three artists that were familiar and so we decide to go with Montreal artists Petitom, Epithumia Rose, and Farah Allegue. Those three artists are really connected to the brand, we really have a strong relationship with them, and we wanted to promote them.”
Along with the new partnership with Foot Locker, Sauvage said it is also busy at expanding Le Cartel. Sauvage said Le Cartel has also opened a new store location in July and will be launching a new collection within the next couple of weeks, it is unknown if this new collection will be included with its other collections at Foot Locker but will be available inside Le Cartel stores.
“We have been through two rough years with covid and now 2022 is the year for growth and we are opening a new shop in Montreal and there are a lot of cool projects coming next so we are really happy and thankful for all the people involved because it is a dream coming true as Foot Locker is a big milestone for us and we are excited about what is to come next for Le Cartel.”
Video Interview: The Impact Of Soaring Grocery Store Prices For Canadian Consumers
Sylvain Charlebois, Senior Director, Agri-Foods Analytics Lab, Dalhousie University, discusses the impact of soaring grocery store prices on Canadian consumers.
Charlebois talks about how bad inflation has gotten in Canada, why it’s happened, where the costs have risen, what can consumers do, what can grocery stores do, and what the future looks like.
The Video Interview Series by Retail Insider is available on YouTube.
Connect with Mario Toneguzzi, a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and the only Canadian – to learn how you can tell your story, share your message and amplify it to a wide audience. He is Senior News Editor with Retail Insider and owner of Mario Toneguzzi Communications Inc. and can be reached at mdtoneguzzi@gmail.com.
Also check out the other series offered by Retail Insider, including The Weekly podcast and The Interview Series, which are both available on Apple Podcasts, Stitcher, TuneIn, Google Podcasts, or through our dedicated RSS feed for Simplecast and other podcast players.
Retailers will unite this fall at the Retail West Conference to hear from retail leaders and experts on the most pressing issues facing the industry. Hosted in person for the first time since 2019, speakers will inspire attendees in how they are strategizing around people, profits, and purpose.
Sarah Jordan, CEO with Mastermind Toys, opens the day sharing her journey of reinventing a beloved Canadian brand. Through launching a market-leading digital ecosystem to unveiling a new sub-brand and namesake private brand collection, Mastermind Toys is on a growth trajectory. In this session, Sarah shares how the power of authentic storytelling to all stakeholders ignites a retailer’s potential.
Ken Keelor, CEO with Calgary Co-op, sits down with David Ian Gray, of D.I.G. 360, to look at what innovation and growth is looking like at the growing co-op. Ken and David discuss how the in-store experience is evolving, becoming more sustainable and how they are serving smaller communities with the strength of the network.
Back by popular demand, Kostya Polyakov, National Industry Leader for Consumer and Retail with KPMG Canada, delivers a follow up to his top-rated session from RCC STORE 22. Kostya expands on how the Chinese marketing is influencing retail in Canada with a lens for the West coast retailers who are looking to incorporate behaviors of Chinese customers as it relates to the evolving meaning of “buying whatever, whenever and wherever”.
For retailers who are looking for the inside track on how economic conditions are impacting consumers, Steve Mossop, EVP with Leger Vancouver will share the results of latest data collected exclusively for this session on how skyrocketing inflation is impacting decision making.
The Voice of Retail Podcast host and producer Michael LeBlanc closes the day with an interview with Christine Day, co-founder and CEO of The House of LR&C, to discuss the evolution of retail strategy with insights that include 20 years experience as head of Starbucks Asia-Pacific division and time as CEO of Lululemon Athletica. From global footprints to modern start ups, Christine chats about the changing retail cycle, challenges of customer acquisition, and the ways in which business models are informed by the ways customers are shopping now.
Retail West will be hosted at the Westin Bayshore Vancouver on October 27, 2022. Enjoy a full day of practical and inspiring information from speakers on the main stage and in concurrent sessions in addition to enjoying networking breaks with attendees and exhibitors.
Register your team today. 20% discount is applied when you register 5+ attendees. For questions on registration, speakers, or exhibiting, please contact Retail Council of Canada at events@retailcouncil.org.
*Partner content. To work with Retail Insider, contact craig@retail-insider.com
Retail Insider is streamlining its Canadian retail news from around the web to include a handful of top news stories that can be viewed quickly during the day. Here are the top stories from the past several days.
London UK-based luxury brand Burberry has pulled wholesale products from multi-brand stores in Canada, leaving vacant retail spaces once occupied by the brand in two major upscale stores.
It’s part of a move for Burberry to take back its operations and create a more exclusive brand image with limited distribution in its own retail spaces, be it leased concessions or freestanding stores. As a result, Burberry’s wholesale boutique spaces at Saks Fifth Avenue and Nordstrom in Toronto are now vacated.
Until recently, Saks Fifth Avenue’s downtown Toronto store boasted a women’s Burberry boutique on its third floor — as of last week the space has been emptied of Burberry product. Main floor Burberry handbags have also been removed as the Saks store completes a minor renovation following the exit last year of brands including Louis Vuitton, Dior and Saint Laurent.
Former Burberry women’s fashion boutique in Sept 2022 — signage removed and temp product within. Image: Retail Insider Former Burberry bag shop at Nordstrom CF Toronto Eaton Centre — same one as the top photo. Photo: Retail Insider
Nordstrom’s downtown Toronto and Yorkdale stores both also now have vacancies where Burberry once was. Downtown, Burberry had a boutique space for handbags on the main floor of Nordstrom CF Toronto Eaton Centre while on the third floor the brand had a women’s boutique space that is now also vacated. Burberry also vacated its boutique spaces at Toronto’s Yorkdale Shopping Centre, including a main floor bag boutique and a second-level women’s ready-to-wear boutique.
In Vancouver, Burberry converted its spaces at Nordstrom to concessions where it now operates three boutiques — that includes a main floor bag/accessory shop, a second-floor women’s boutique and a leased third-floor men’s corner. It’s now the only Nordstrom store in Canada where Burberry has an extensive offering given the concession transition.
Burberry’s exit hits Nordstorm particularly hard in the Toronto market, following the exit of other brands that once had shops within those Nordstrom stores. Nordstrom’s downtown CF Toronto Eaton Centre store has almost none of the original boutiques that it opened with in September of 2016. When it first opened, the large downtown store had main floor bag and accessory shops for Loewe, Stella McCartney and Miu Miu as well as Burberry and Gucci — now only Gucci remains and operates as a concession as per the original arrangement when Nordstrom opened. On the third floor in 2016, Nordstrom also unveiled boutique spaces for Lanvin, Loewe, Stella McCartney, Moncler, and Burberry — none of those are left now though a Max Mara boutique, which opened in 2019 and replaced Loewe, features prominently.
Former Burberry women’s apparel boutique on the 3rd floor of Nordstrom CF Toronto Eaton Centre. A former Moncler shop is to the left. Photo: Retail InsiderFormer Stella McCartney, Loewe and Lanvin boutique spaces at Nordstrom CF Toronto Eaton Centre — the only remaining ‘hard shop’ is a Max Mara shop that replaced Loewe in 2019. Photo: Retail Insider
The Yorkdale Nordstrom store has also lost almost all of its original women’s ready-to-wear boutiques and now for the first time, a main floor handbag shop. When it opened in October of 2016, Nordstrom’s Yorkdale store had an impressive six luxury designer boutiques for women on its second level including Chloé, Celine, Valentino, Akris, Burberry and Dries Van Noten. All have since closed except for Dries Van Noten which operates out of a unique looking corner space.
The main floor of Nordstrom Yorkdale has fared better than downtown Toronto however — so far only Burberry has exited, leaving boutiques for Celine, Valentino and Chloé bags/accessories as well as a concession for Belgian luxury brand Delvaux.
It should be noted that some Nordstrom and Saks stores in Canada still carry Burberry footwear and kids fashions however — while Burberry pulled most of its Canadian wholesale accounts, two categories were excluded.
Burberry’s full range is still available at Holt Renfrew stores in Canada where the brand has a network of leased concessions. All of Holt Renfrew’s stores including in Vancouver, Calgary, Mississauga, Toronto and Montreal house Burberry concession boutiques primarily for bags and women’s ready-to-wear. Holt Renfrew’s business model of housing concessions has resulted in a station where it has far more popular luxury brands than either Saks or Nordstrom in Canada.
Shuttered Burberry women’s clothing boutique space at Nordstrom Yorkdale. Photo: Retail InsiderVacated Chloé, Celine and Valentino ready-to-wear boutique spaces at Nordstrom Yorkdale. Only Dries Van Noten remains. Photo: Retail Insider
Burberry operates a ‘world of’ concession at Toronto’s Yorkdale Holt Renfrew store, housing a full range of women’s and men’s ready-to-wear as well as bags and accessories and some footwear. It’s the only one of its kind in Canada.
Standalone stores are also part of Burberry’s presence in Canada, with locations in downtown Vancouver at the Shangri-La Hotel facing Alberni Street, at Calgary’s CF Chinook Centre, in downtown Toronto at 144 Bloor Street West as well as at the Yorkdale Shopping Centre in Toronto.
Burberry bag concession at Nordstorm in Vancouver in September 2022. Photo: Lee RivettBurberry women’s ready to wear concession at Nordstorm in Vancouver in September 2022. Photo: Lee RivettBurberry men’s concession corner at Nordstorm in Vancouver in September 2022. Photo: Lee Rivett
Burberry has had its ups and downs over the years. Over-production and license agreements in the 1980s and 90s led to an over-saturation situation for the brand which almost became ubiquitous in terms of its distribution, while counterfeit items also sullied the perception of the brand known particularly for its trademark tartan and trench coats. Christopher Bailey joined Burberry as creative director in 2001 before exiting the company entirely in 2018 — during the early years under his direction the brand gained the reputation of being worn by “chavs” and football hooligans with its then lower price points.
Things were eventually turned around under new leadership and by 2016, about 77% of sales came from Burberry’s stores. Now the brand is pushing even further in terms of controlling its retail distribution through leased spaces and standalone stores ranging from boutiques to large flagships.
In 2018 it was discovered that Burberry had for the past five years been destroying unsold clothing, accessories and fragrances, creating controversy — the move was said to be to prevent items from being stolen or sold at reduced prices. Burberry no longer incinerates excess goods and also stopped using real fur in its products. This year Burberry announced that it plans to become climate positive by 2040.
Burberry was founded in 1856 by then 21-year-old Thomas Burberry and is now headquartered in London. The company has stores in major markets globally as well as concessions and, increasingly less, wholesale distribution of its products in multi-brand retailers.
Canadian retailers are increasingly hiring for digital-savvy jobs such as UX/UI designers, data analysts, software developers, and digital marketers as intelligent retail continues to expand post-COVID.
The report was researched and written by Chris Herron (Research Analyst) and Mansharn Toor (Research and Policy Analyst), with support from Rob Davidson (Director, Data Science) and the ICTC Digital Think Tank team.
“The retail sector was one of the most challenged during the global pandemic. The initial shock of lockdowns impacted employment levels and outputs, but the sector quickly rebounded and performed relatively well when compared to the overall economy during 2020 and 2021,” said the report.
STRIVING
TO BE
SMARTER:
THE EVOLUTION OF
INTELLIGENT RETAIL
IN CANADA
“Its stability is in large part due to the greater propensity of Canadians to shop online and utilize e-commerce technology; the industry witnessed many shifts as a result of the global pandemic and early investments in intelligent retail, including disruptions to supply chains. At the same time, key changes in consumer behaviour and expectations, coupled with labour shortages, are critical considerations for companies shaping new engagement strategies.
Mansharn Toor
“Increasingly, retail companies must build their digital strategies by prioritizing technologies that provide solutions to an identified business problem and strengthen consumer relations in order to remain competitive in the marketplace. These strategies must include a concerted focus on talent, in terms of attracting, retaining, and transitioning workers. While the growth in automation and intelligent retail technologies have already created new and plentiful employment opportunities, for several digitally skilled roles such as UX/UI designers and software developers, more traditional retail occupations such as cashiers, warehouse personnel, or delivery people will require support to obtain the skills needed to remain competitive in the marketplace.”
Toor said the research found that many retailers were not ready in the process of adopting technology prior to COVID-19.
“But during and as they moved through COVID-19 and the pandemic, they increasingly found digital marketing, branded ambassadors and smart delivery, supply chain and fulfillment technologies, as increasingly important just due to some of the impacts of COVID-19 but also just in the impact of supply chains during the time,” she said.
Image: ICTC
Toor said the report found a high demand for software engineers, UX/UI designers as well as web developers.
“We believe that’s a direct response to the digitization of retail and the need to have a more digital presence not only to reach customers during the pandemic but also to sustain that customer base after the fact,” added Toor.
“While there is the importance of having a digital presence for retailers, there still is a demand for customers to walk into stores and actually be able to engage with the brand and the product themselves. And what we’ve noticed is that technology is a really big part of the in-store experience and what we call the physical/digital aspect of it. And so having the talent, even the frontline workers, the customer-facing workers, having the background in utilizing certain technologies that improve connections with consumers whether that’s being able to use an iPad and walk them around the store to give content about the products available or even just looking at the availability in store, with smart logistic and fulfillment tools.”
Chris Herron
Herron said there’s a massive diversity in the range of applications of technology across the retail sector.
“The dynamic of how the workforce’s needs are changing is definitely underway,” he said.
“Another thing that this report found is that in the last few years there’s been a proliferation of software as a service application that have been essentially making a lot of these intelligent retail tools available to very small organizations for whom they would have been previously unavailable.
“It used to be if you wanted to do a very unsophisticated, intelligent supply chain application, you really had to build it within your organization or you had to order something that was very expensive from a vendor. But nowadays you have many options as a small business with sometimes even just one or two employees for how to run a supply chain on your own, run an intelligent retail business on your own. Even things like point of sale.”
Digital Flyer Signage at The Bay on Queen Street (Image: Dustin Fuhs)
Although the retail sector was experiencing a noticeable shift toward digitalization before the pandemic, COVID-19 galvanized Canadian retailers into adopting more digital tools, said the report.
“The movement of retailers adapting to a digital mindset is largely due to the mobile-driven changes in consumers’ attitudes and behaviours, and retailers having to build new capabilities to avoid losing market share. This adoption of technological advances for the retail sector can be traced back to the early 2010s; however, it was not completed in unison by the whole sector,” it said.
“In 2020, retailers adopted digital technologies at unprecedented rates under the pressures of the COVID-19 pandemic. The Retail Council of Canada, for example, notes that during the pandemic, more retailers were applying various technologies, including augmented reality, virtual reality, and smart logistics. The Canadian Chamber of Commerce reports that 30 per cent of Canadian retailers introduced virtual business connections, work from home, and e-commerce into their business process because of the COVID-19 pandemic.
“However, retailers in Canada have not simply adopted technologies to serve short term needs. Many are making technology an integral part of their organizational strategy. This digital evolution and retailers’ focus on advancing their digital footprint to meet customers’ evolving needs is at the forefront of dialogue between retail executives in the US as well. For example, in recent research examining the practices of more than 200 retail IT executives, more than half note prioritizing continual upgrades to their digital customer experience, expanding the use of analytics-backed decision making, and increasing overall investments in AI.
SELF CHECKOUTS, SHOPPERS DRUG MART
“The traditional relationship between retailers and technology is focused on enhancing the customer experience, but it has since evolved to offer options that battle inflationary measures. With ongoing supply-chain disruptions retailers will increasingly adopt deflationary technologies. These deflationary technologies will vary, but the emerging trends of smart shelves, cashier-less shopping, and increased integration of omnichannel marketing technologies will become increasingly present.”
Additionally, the ongoing advancements in technology within the retail sector means that retailers must develop strategies to safeguard customer data and privacy, added the report.
“For many retailers, COVID-19 was a decisive event that pushed them to invest even further in digital infrastructure and strategies to retain and attract customers and market share. Digitalization and intelligent retail must remain top priorities for organizations in the volatile new climate; according to a recent study by Deloitte, at least two-thirds of Canadian retail executives plan to invest significantly in omnichannel, modernize supply chains, and enhance data privacy and security,” said the report.
“Although more than half of Canadian organizations are making major investments in expanding their digital capabilities, Canadian businesses must accelerate digital adoption to compete with key players in other jurisdictions like the US and China. However, the process of digitization in Canadian retail is not a one-size-fits-all model; according to survey respondents and interviewees in this study, the sector can be seen as overly traditional, with the ecosystem comprising a relatively limited group of competitors. Advancing this trajectory requires a concerted effort on further digitalization and a talent pipeline to support this change. According to employers, talent pipelines must be bolstered to produce a higher volume of digitally skilled workers needed to turn Canadian retail organizations into world leaders.”
