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Canadian Intimate Apparel Brand Knix Accelerating Retail Expansion Plans After Funding Announcement

By
Mario Toneguzzi
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Knix on Queen Street West
Knix on Queen Street West - Photo by Dustin Fuhs

Knix, a direct-to-consumer intimate apparel brand, recently completed a $50-million minority Growth Equity funding run, which will help accelerate the retailer’s expansion plans.

The funding round was led by private equity firm TZP Group, with participation from existing Knix investors including Acton Capital and alongside new investor, supermodel and entrepreneur Ashley Graham.

Joanna Griffiths, Founder and CEO, who closed the round just three days before giving birth to twins, remains the largest shareholder of the company while TZP Group will take a minority stake in the business. 

PHOTO: KNIX

She said the round of financing will support Knix’s continued product innovation, brand building, and virtual fit program as well as expanding its retail store fleet in North America.

“We’re in heavy growth mode at the moment,” said Griffiths. “We’ve been experiencing tremendous growth over the past few years and are just getting started.

“We’ve been very capital efficient as a brand and especially when you look at us versus some of our US counterparts in the direct to consumer space. We’ve always been very, very intentional about our growth and what this round means for us is really leaning into the great momentum that we’ve been experiencing. It means that we are able to really serve our customers better which is what it’s all about. Create more products for them. Do larger brand campaigns and more storytelling and then scale up our ability to serve customers both (virtually) as well as through our retail store footprint.

“It’s really about doing more and more and more and leaning into the growth and the momentum that we’ve been experiencing so we can better serve our community.”

Griffiths said the company sees itself getting to about 20 retail stores over the next 18 to 24 months – half in Canada and half in the US.

“We’re really following where our customers are so you can sort of expect to see us growing as stores across the major Canadian cities over the next 24 months with our next Canadian store slated for Ottawa. That will open in the fall,” she said. 

Toronto-based Knix was launched in 2013. The intimate apparel brand’s mission is to reinvent what the intimate category means both from a product standpoint, being hyper-focused on innovation and design of what suits consumers today in every stage of life and activity, and redefining the role a brand can play in the community by covering taboos and community storytelling to empower customers to be “unapoletically free.”

“Tactically speaking we’re a direct to consumer brand and a vertically integrated brand. Most of our sales come from online exclusively through our own website and in 2019 we began to open Knix retail stores. We have two stores at the moment. One is in Toronto and one is in Vancouver and in the process of opening more stores,” said Griffiths.

“We also have a little sister brand called KT. That is specifically a brand that is designed for teens and Gen Z that is centered around our first product that we ever launched at Knix which is leak proof underwear.”

Griffiths said the funding round marks Knix’s first significant financing round. With over one million customers and with an average five-year annual growth rate of 150 per cent, Knix is now surpassing $100 million in revenue over the last 12 months.

Knix was founded as a wholesale brand and switched to direct-to-consumer in 2016. 

“Making the decision to pull out of over 700 retail doors and shift our focus to become a DTC brand was a turning point for Knix that led to just shy of 4,000 per cent three-year growth,” said Griffiths.

“We made that choice by listening to our customers and understanding how they wanted to shop and interact with us as a brand. That same focus of listening has driven every major decision we have made as a company and ultimately the success we experienced in 2020. We’ve always focused on innovative products that make our customers feel comfortable in their skin and they want more – more products, more retail stores and more breakthrough brand campaigns that challenge the status quo. To better serve our community we decided it was the right time to take on outside capital and accelerate our growth.”

Knix sells about two million pairs of leak proof underwear each year. The brand has leveraged its patented technology to expand its leak proof offering into swimwear, sleepwear, nursing bras and other products. 

“We believe Knix is an authentic and innovative brand that is disrupting the women’s intimate apparel landscape. As pioneers in inclusivity and body positivity, with an expanding portfolio of high-quality products, the brand has amassed a large and growing community of engaged and loyal consumers. As a digitally-first brand, Knix is well positioned to seize the opportunity for continued growth, and we are thrilled to be partnering with Joanna and the team,” said Erin Edwards, Partner at TZP Group.

TZP Group is a multi-strategy private equity firm managing approximately $2 billion across its family of funds including TZP Capital Partners, TZP Small Cap Partners, TZP Strategies, and TZP Strategies Acquisition Corp.

Sugar-Coating the Newfoundland Sugar Tax: Sylvain Charlebois

By
Sylvain Charlebois
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Image: Pexels

In its recent budget, the Newfoundland and Labrador government announced that it will introduce a new tax of 20 cents per litre on sugary drinks, starting April 1 2022. This would likely be a first in Canada. So far we know very little about how the tax would work, which products would be affected, and how revenues from the tax would be used by the government. However, when a government commits to taxing a food product, any product for that matter, it always needs to proceed with extreme caution.

Many countries have already taxed sugary beverages with some degree of success. Mexico has become a well-documented soda tax case in recent years since it has one of the greatest per capita consumption of soft drinks globally and high rates of obesity and diabetes. A recent report from Sánchez-Romero looked at the market three years after the tax was implemented. They noticed that the probability of becoming a medium or high consumer of soft drinks in Mexico had decreased because of the tax. Additionally during that same period, the probability of becoming a low consumer or non-consumer had also increased. Encouraging results.

The study which did receive a lot of media attention enticed many public health experts to support the concept of a sugar tax simply based on a belief that it will discourage consumption. The reality is a little more complicated than that.

We have seen cases where demand for soft drinks has gone up, even with a sugar tax. A recent study by Kurz and König on how both France and Hungary is coping with their soda tax was quite telling. For France, they found a minor decrease in sugar-sweetened beverages sales after a tax implementation while overall soft drink sales increased. For Hungary, there was only a short-term decrease in sugar-sweetened beverages sales which disappeared after 2 years, leading to an overall increase in sugar-sweetened beverages sales.

Many studies looking at the impact of a sin tax on sugar-sweetened beverages will often look at soft drinks in isolation. Studies have suggested that, once a sin tax is implemented in a country, consumers are tempted to buy other non-taxed food products to get their sugar fix. Sale diversions at retail are rarely considered. According to the Lancet, since the sugar tax was implemented in Mexico the obesity rate in the country has gone up not down. And Mexico is still the country with the highest carbonated soft drink consumption per capita in the world, more than seven years after the sugar tax was implemented in 2014.  

What some studies have also noted is that price elasticity for soft drinks barely matters. Prices will fluctuate all year round due to weather, promotions, and category management practices. A tax will not necessarily make these products more expensive to buy at retail. In fact, given how margins are so high for this category, in countries where a soda tax was implemented price is a non-decision-making factor for most consumers. The sugar tax is simply just absorbed by the supply chain. 

We should dread the moralistic state which for years has opted to use a sin tax to punish consumption. We have seen it with alcohol, cannabis, and cigarettes. We have come to accept that these products should be taxed for one reason or another. But these products are not food. Hard to see how this can end well for both consumers and taxpayers. If sugar can be taxed, a revenue-hungry government could eventually opt to tax sodium or even fat. Some of the most natural food products have high sugar, sodium, and fat content. Some dairy products, meats, even natural juices, for example, could be part of some government’s hit-list someday.

Another dark side of sin taxes is how funds are spent in government. Funds generated from sin taxes are often ill-directed and will support the government’s problem of the day. Funds often end up in some bureaucratic black box and are often used for other means than what was originally planned. Many countries have promised to use revenues coming from sin taxes to spend on preventive medicine programs, awareness campaigns, or even in health care generally. It either rarely happens or the accountability is just not there.

Most public health experts will desperately want to believe in the effectiveness of a sin tax on food, but the evidence is still quite weak at best. Most studies which suggest a decrease in consumption of taxed products have flawed samples, and a scope of analysis which would exclude the influence of untaxed sugared alternatives. 

In the end, education may be the most powerful tool we have. Soft drink consumption per capita in Canada has in fact decreased in recent years, without a sugar tax. An increasing number of Canadians have moved away from sugar-sweetened drinks due to effective awareness campaigning. Empowering consumers with more information can only lead to altered behaviours and choices.

If Newfoundland and Labrador wants a sugar tax, it’s certainly not to get its people to lead healthier lifestyles. Based on what has happened elsewhere, the government should be honest and simply state that this is very much about paying its bills. 

Adeptmind Announces $6.2M in Series A Funding

By
Retail Insider
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Adeptmind Announces $6.2M in Series A Funding Innovative Retail Solution Provider Will Use Funding To Accelerate Technology To Help Retailers And Shopping Centres Drive Digital Discovery

Innovative Retail Solution Provider Will Use Funding To Accelerate Technology To Help Retailers And Shopping Centres Drive Digital Discovery 

June 3, 2021, TORONTO — Today Adeptmind, a leading AI retail technology company creating advanced digital discovery solutions for retailers and shopping centres, announced a $6.2M USD Series A investment. 

This raise is led by Boston-based VC firm Innospark Ventures. It includes support from property technology firms A/O PropTech and Pi Labs, as well as an investment by leading beauty retailer, Ulta Beauty. The funding will accelerate the research and development of new tools that will amplify personalization and shopper intent, enhance marketing, and drive innovation for the underserved physical shopping experience.

Since launching in 2017, Adeptmind’s technology has been adopted by more than 400 retailers and property owners to offer customers more convenient ways to browse, discover and shop at their favorite shopping destinations, both in-store and online. This includes industry leaders: Bayer Properties, Cadillac Fairview, Centennial REIT, Decathlon, Hammerson, U.S. Polo Association and Ulta Beauty Inc.

“While Covid-19 has greatly accelerated the adoption of online shopping, it has also highlighted the benefits that come with shopping in-store. In the post-pandemic world, shoppers will demand a new form of retail that merges the physical shopping experience with the convenience of e-commerce,” said G Wu, CEO and co-founder of Adeptmind. “Our mission is to use AI to bridge the gap between digital discovery and physical commerce by unlocking advanced customer-intent data that brings the context of physical shopping to the online world.”

Adeptmind’s technology helps retailers and shopping centres:

  • Bring Real Life to Online. Ecommerce sales are expected to make up 15.5 per cent of the $5.856 trillion in total retail sales this year.  While e-commerce is growing, nearly one in three online orders are returned.  This is because the benefits of touching and feeling products are lost when shopping online.  Using AI, Adeptmind brings key purchase decision points online. For example, when searching for a lawnmower ‘that is easy to push’ or sunscreen ‘that protects but feels light.’ Adeptmind’s advanced digital search tools mine customer-intent data to provide additional context to search terms that help online shoppers not only find a lawnmower, but a lawnmower that is ‘easy to push.’ The multitude of online sources, includes online customer reviews, social media and influencer content, among others.
  • Digitize Physical Shopping. Adeptmind allows shoppers to search one website or app to discover what items are available near you — one mall, city centre, shopping avenue at a time — and purchase items for shipment, same-day delivery, or curbside pick up. This blends the convenience of e-commerce with the uniqueness of physical shopping and transforms the shopping centre or district into a digital marketplace that engages online shoppers and provides the convenient delivery options traditionally enabled by e-commerce. 

“In our AI-driven world, the power of digital search is built on context and access to data,” says Howard Bornstein, Principal at Innospark Ventures. “Adeptmind is able to provide deep, rich, customer insights that are helping to shape the way people shop.  We’re excited for the opportunity to invest in their continued growth and innovation. Any retailer who cares about the customer search experience and conversion rates on their website will want to learn how Adeptmind can uniquely unlock value for them.”

“The value, conversion and loyalty that follows personalized guest experiences are incredible and only further enhanced when AI can support the experience,” said Michelle Pacynski, VP Digital Innovation, Ulta Beauty. “Adeptmind is an important strategic partner on our digital journey. We’re already seeing positive impact across our omnichannel ecosystem and look forward to working together to further bolster our data acquisition capabilities to enhance guest experiences.” 

“E-commerce has changed the way people shop,” said Othmane Zrikem, CDO of A/O PropTech. “Some in the commercial real estate sector have taken this fact fatalistically, but Adeptmind is flipping it on its head. By leveraging data science to blend the ease of online shopping with the familiarity of the bricks and mortar retail experience, their platform empowers the traditional retailers and mall operators. It’s a win-win for retailer and consumer, and we’re excited to be able to support their journey.”

“Technology has the ability to help landlords and retail asset owners increase, measure, and share in the revenue that can be generated online through the presence of a physical store. However, the ability to capture that uplift is a big challenge and it is companies such as Adeptmind that offer a fully rounded solution to help landlords overcome this challenge. The pandemic has accelerated the growth of online retail but that’s not to say that physical retail is dead – far from it – what we’re witnessing is the digital metamorphosis of the industry which we believe will rise with a renewed purpose and with technology as a key part of its evolution.” Hugo Silva, Investment Manager, Pi Labs.

To learn more about Adeptmind visit adeptmind.ai. 

###

About Adeptmind

Adeptmind was founded in 2017 by two former employees of the Microsoft-exited tech startup Maluuba. As a leading AI based, e-commerce product discovery company, Adeptmind uses state-of-the-art active and deep learning techniques to enhance the customer purchasing journey. Located in Toronto, Adeptmind supports more than 400 retailers, shopping centres, and small and medium size businesses with innovative technology around the world. To learn more, visit the Adeptmind website at www.adeptmind.ai and follow Adeptmind on LinkedIn. 

For more information:

anne@adeptmind.ai

Canadian Retail News From Around The Web For June 3rd, 2021

By
Retail Insider
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Canadian Retail News From Around The Web

Top Stories: National

Central/Eastern Canada News

Western Canada News

Attracting Chinese Tourists to Canada Post-Pandemic Critical for Retail Growth: Expert

By
Mario Toneguzzi
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Photo via freepik

Some sectors of the Canadian retail industry have been particularly hard hit this past year or so as a result of the huge decline in Chinese tourists, and shoppers, due to the COVID-19 pandemic.

And Edmonton entrepreneur Jingjing Zheng is working on a new digital platform through WeChat to connect those Chinese shoppers to Canadian retailers.

In 2019, there were about one million people from China, Macao, Hong Kong, and Taiwan who visited Canada. But in 2020, that number dropped to 150,000, she explained.

That plunge has a significant impact on the retail sector in Canada.

Banff Canada Goose Store at Cascade Plaza Mall (Image: Adam Metropolis)

“If we look at the spending of the group, in 2019, tourists from China, their spending was $1.9 billion in Canada. In BC, the spending in 2019 was $850 million. Obviously a lot of people were coming to BC and Ontario as well. We don’t have the data or the spending for 2020, but obviously if you look at the drop in the number of people, the spending is probably a significant drop as well,” said Zheng.

“If you look at spending, trends with tourists from those locations, they’re quite known for their spending power. They will eat, they will go to hotels but the amount of luxury goods that they buy, and the gifts that they buy and bring back, is a huge chunk within that $1.9 billion – about $570 million was spent on clothing or gifts in 2019.

Jingjing Zheng

“We don’t know exactly but I think a lot of the people who actually came here in 2020 were probably on business trips or out of necessity. So the spending I think got harder hit during COVID and also some of the stores were closed. And Chinese consumers tend to be more conscious in terms of their safety and health and they’re used to strict regulations in China and coming here if they don’t feel like it’s safe enough to shop and to go around to visit different places, they’re more conservative in that as well.”

Zheng runs an agency called Hexie Digital that focuses on Chinese language marketing in North America. She provides the following services to clients worldwide: Marketing translation, localization, Chinese copywriting and editing; Brand strategy for the China market; China entry strategy and market research; Chinese digital marketing and social media strategies; Interpretation between English and Chinese; and bilingual conference facilitation (in Alberta).

Holt Renfrew at Toronto’s Yorkdale Shopping Centre – Photo by Dustin Fuhs

Zheng said it will not be an easy recovery following the pandemic.

“It will eventually but there needs to be some effort to be made from a policy perspective from both sides of the government. From the Chinese side, if they are encouraging people to travel abroad more of course with the pandemic being in control. People need to be encouraged to travel abroad,” she said.

“And from a Canadian policy perspective, what are we going to do to make sure that it’s safe and what are we going to do to make sure that we attract tourists to these different locations? A special draw to have Chinese tourists come to Canada? If we’re looking at 2018 and 2019, China was the largest source of tourists to Canada. How we attract Chinese tourists is quite crucial I think for a speedy recovery. Over time things will pick up and things will go back to normal but if we want a quicker recovery we need to do something special to make that happen from a policy perspective.”

Zheng said the company is building a digital platform on WeChat to connect Canadian brands, and eventually brands across North America, with Chinese consumers. 

“Trying to attract consumers to experience the brands they may not be familiar with. A way to introduce things that normally wouldn’t be easy to access for them if they’re not familiar with the brands and they’re not familiar with some of the retailers here in Canada. It makes them like almost top of mind when they’re coming to visit. They know about Canada, they know about the Rockies, they know about Vancouver, but they may not know a specific mall in Vancouver or the West Edmonton Mall,” she said.

“So putting that retail, or the specific retail, in the mind of the tourists when they’re coming here and planning their trip. They will have a plan to stop by those places. Put those locations in their trip plans.”

Zheng said there is also a huge population in Canada that are recent Chinese immigrants and also international students. 

“These groups have similar characteristics as some of the Chinese tourists. Their spending habits are quite similar and a lot of them have very high spending power. Those people are also an important target for retailers in Canada.”

Zheng said the platform on WeChat will likely be launched some time in the fall.

She also said that retailers need to utilize WeChat, the Chinese multi-purpose messaging, social media and mobile payment app, to connect with Chinese consumers, adding that there are 1.2 billion users active every month on the social media platform. 

Hudson’s Bay Downsizing Iconic Downtown Calgary Flagship Store to 3 Retail Floors

By
Mario Toneguzzi
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Image: Hudson's Bay Calgary

The iconic downtown Calgary Hudson’s Bay store is reducing its retail footprint by consolidating its operations over three levels at its flagship location in the heart of the city.

“As we operate with a digital-first mindset, Hudson’s Bay is redefining the role of the store. In Calgary, we are rightsizing the shopping space to improve productivity and profitability, while at the same time enhancing the overall experience for customers,” said the company in a statement.

“Without any reduction to products, services or staff, the store will utilize three floors as retail space. Beginning this fall we will also fulfill orders through microdistribution from the store, increasing speed of delivery to thebay.com customers in the West.”

The fourth and fifth levels would be used for other uses such as microdistribution, according to the company.

Level 6 is an event space called Hudson that is operated by Toronto-based Oliver & Bonacini and Level 7 is a gym. The building is owned by the Hudson’s Bay Company and RioCan in a joint venture.

6th Floor Elizabethan Dining Room, no date, Gelenbow Archives NA-2037-25

Michael Kehoe, broker/owner of Fairfield Commercial Real Estate in Calgary, said the Bay was Calgary’s first department store built in 1913.

“It’s undergone several space reconfigurations in the recent past where the retail footprint has been reduced,” said Kehoe. “They put an event centre in. There’s been a health club in one of the upper levels for many years. They expanded the restaurant on the main and lower levels.

“This is just a continuance of the process whereby the retail footprint’s being reduced as they strive to make the building into a mixed-use building. In the future, it could have residential or entertainment components as well as retail. Maybe even office space in the future. But who knows?

Michael Kehoe

“The thing to put into perspective is that Hudson’s Bay created that new real estate arm last fall to convert a lot of the real estate into mixed-use properties and increase the value as the nature of department stores has changed significantly over the years and more so even in the recent past with online shopping and the pandemic year.”

Kehoe said the role of the downtown department store was always the flagship mentality. That’s where the best of the best would be. The highest sales performance in cosmetics and fragrances. That’s where you went to get fashion. But as the enclosed malls evolved, suburban shopping centres, with their department store anchors, altered the nature of the downtown flagship.

“But engrained in people’s memories is the concept of the downtown department store as being the flagship location where you would go to shop, experiential shopping,” said Kehoe.

“The Hudson’s Bay Company in downtown Calgary was one of the essential building blocks of Stephen Avenue, Calgary’s original historic main street. It’s been the anchor down there since it opened in 1913. It was expanded again in the late 20s. It’s an architectural landmark. It’s the anchor of the downtown enclosed shopping centre known as the CORE and Stephen Avenue Place. Anchored at one end by Holt Renfrew and the Bay at the east end. It’s a significant landmark in the retail landscape of Calgary.”

Northeast corner of the original 1913 building, image via Glenbow Archives ND-8-278

Streetworks Development is the real estate development division within the iconic Hudson’s Bay Company. The company said it creates and reinvigorates urban districts, drives the growth of neighbourhoods and helps build communities of the future. 

“Our team anticipates demand and innovates new solutions for office, retail, residential, health and entertainment. We do this across 20 million square feet of mixed-use projects currently under development,” it said. 

According to the City of Calgary’s Inventory of Historic Resources, the downtown Calgary Bay was significantly expanded in 1929 and 1956-57, describing it as a commercial-style building, clad in ornamented, cream-coloured terra cotta. 

“The store is noted for its elegant arcade which wraps around the east and south facades. With its landmark presence, it is a prominent contributor to the concentration of late-19th- and early-20th-century commercial structures that compose the Stephen Avenue National Historic District,” it says.

“The store’s design was the first of its kind in Calgary – constructed on a monumental scale, incorporating steel and reinforced concrete construction technology that was sheathed in terra-cotta cladding, and banks of elevators allowing it to rise six stories. Reminiscent of the arcades lining the famous Rue de Rivoli in Paris, it is the only known example of its type in North America.

“The prototype for the company’s expansion programme of new stores, it was repeated in Vancouver (1913-16), Victoria (1913-21), and Winnipeg (1926). With the decline of its traditional role as fur trader, the Hudson’s Bay Company greatly expanded its retail operations in Western Canada by introducing this new class of modern department store based on the Calgary example.”

Image: Ron Odagaki

Ron Odagaki, Senior Sales Associate, Retail, with JLL in Calgary, said the Bay is first of all an iconic building at a very prominent address.

“It’s a landmark in downtown Calgary. It’s very, very prominent but I think overall in terms of the department store industry has the Bay been able to pivot similar to other retailers? As we look forward that will be interesting to see if they are able to pivot as other retailers have,” he said.

Because of its centre ice location and the unique nature of the building itself, it would be interesting to see what could be done with that property in the future and with a reduced retail footprint, there are other possibilities for use, he said.

Agile Omnichannel Promotion Management Solutions Providing Retailers with Strategic Advantage

By
Sean Tarry
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A lot has changed within the retail industry over the course of the past couple of decades. Fuelled primarily by the ongoing digitization of the world around us, the shopping environment has virtually transformed, yielding multiple channels on which consumers can shop and a subsequent shift in their collective behaviour. This ever-evolving retail landscape has presented merchants with the challenge of continuously meeting increasing consumer omnichannel desires while enhancing the experience they offer across all channels. In concert with the digital revolution have been advancements in point-of-sale innovations and retailers’ ability to leverage them in conjunction with promotion management software to create unique and complex promotions. And, most importantly, explains Dan Surtees, Vice President of Strategy & Business Development at XCCommerce, its allowing marketing teams throughout the industry to move from an approach that’s tactical in nature to the development of initiatives that are driven by strategy.

Evolution and innovation

“It’s incredible to think of the immense change that’s happened within the industry over the past 25 years,” he says. “When you think back to the early 1990s, although ecommerce hadn’t taken off, a digitization of retail was already starting to take shape. POS systems were evolving and becoming much more innovative. But, as POS solutions providers started to build out their product, the promotions engine, unfortunately, was developed mostly as an afterthought. As a result, retailers were left with simple promotions with basic functionality, supporting things like a dollar off, percentage off or buy-one-get-one. The problem was the fact that these POS solutions providers didn’t focus on promotions as the core area of their business. The consequence was promotions engines that may or may not provide its user with consistent results. And because many of these systems were built for specific technologies, they were very much tied to them, limiting functionality and a retailer’s ability to shift from rudimentary tactics.”

He goes on to explain that in the years that followed, which bore witness to the rise of ecommerce, a subtle wave of promotions innovation occurred, resulting in moderately better functionality and more automation. However, as ecommerce and physical retail became the two predominant channels of choice, the need for solutions that addressed those singular needs took precedence in the development of the technologies and software, further preventing the introduction of a more robust and flexible promotions engine. Surtees also points out the fact that, in addition to the continued limitations inherent in the systems being deployed by retailers at the time, the dual channel offering was also presenting challenges that were complicating their efforts.

“Although the rise of ecommerce signalled the start of really exciting times for retailers and their teams, their approach in building systems and infrastructure was still very tactical,” he recalls. “Many merchants within the industry developed strategic plans for ecommerce solutions but didn’t consider potential synergies with their existing POS solution. The development and potential benefits of a dynamic promotions engine remained an afterthought. The popular thinking at the time was that, because promotions modules were included within these solutions, their organization’s promotions needs would be met. However, many of the same limitations still existed, defining constraints for the business and their interactions with customers. The other challenge was in the fact that many retailers all of a sudden had a promotions solution running through their POS system and another running through their ecommerce system, meaning that any and all promotions would need to be entered twice, inevitably resulting in inconsistent results. And, not only were retailers still technology-dependent when it came to promotions, but they became channel-dependent as well.”

Strategic approach

Youtube video

Although greater flexibility had started to be built into the systems, it hadn’t necessarily translated into increased capabilities or efficiencies for retailers from a marketing and promotions perspective. Surtees points out that marketers or operations team members would approach their IT organizations to introduce new promotions initiatives. Invariably, however, they would be told that the promotion type could likely be implemented, but that it would require a significant amount of time and money to do so through their solutions providers. He describes the situation that lingered as a continuation of the malaise around the development of agile promotions solutions, perpetuating their tactical approach inside the limitations of their solutions’ functionality. However, with the evolution of the retail omnichannel environment, along with shifting consumer shopping behaviour, has come a critical need for retailers and their teams to begin thinking strategically about promotions and the ways they’re engaging with their customers.

“Understanding customers and their needs and wants is obviously critical in supporting the efforts of any retailer in driving their business,” he asserts. “But the urgency has been heightened with the arrival and development of the omnichannel world and, most recently, by the pandemic and the swift change in consumer behaviour that occurred as a result. This means that the promotions and offers that they create need to be extremely strategic in order to effectively engage with customers and generate loyalty. Subsequently, they’re now realizing that they need to be thinking of newer, better ways to give their customers what they want and to ensure that their solutions can adapt in future with any further changes in shopping behaviour. The way retailers can achieve this is by ensuring that their promotions management systems integrate seamlessly with their customer relationship management and loyalty systems. And, to execute on this strategic vision, they need an expert partner that can help with the creation and implementation.”

Agility and adaptability

One of the expert partners that Surtees speaks of is XCCommerce – the omnichannel promotions solution provider that’s been servicing the retail industry with automated promotion and coupon management solutions for more than 20 years. Headquartered in Montreal, QC, with offices in Toronto and the United Kingdom, the company works with more than 55 brands, including Indigo, Ann Taylor, Metro and Shoppers Drug Mart, among many others, servicing more than 13,500 storefronts on 30 different channels. Offering a promotion solution that provides its clients with full control over the management of their promotion and coupon offers, the company is helping retailers drive loyalty among their customers and increase sales. Compatible with any operating system, database and sales application, and decoupled from all other technologies, Surtees says that the XCCommerce promotions execution module is a fit for just about any business, allowing the freedom and flexibility to grow and gain a competitive edge.

“As the retail industry becomes more and more competitive, the requirement for a strategic focus continues to intensify,” he says. “And, when combining a well-developed strategy with the capabilities of a dynamic promotions engine and applying them to the opportunities that ecommerce presents, global expansion for any brand becomes so much easier to achieve. Retailers can now enter any market. And the flexibility and adaptability of our systems are allowing them to pursue this, enabling some of our clients to operate promotions in dozens of countries with dozens of currencies, entering their promotions once and delivering consistent results across all channels. When you’re talking about multilingual and multi-currency operations, you need your systems to be working with you effectively.”

Influential solution

Given the incredible evolution that’s occurred within the retail landscape, one that’s been precipitated by a digital transformation of the world around us, it’s clear that the development and implementation of the right technology systems is crucial in supporting retailers’ efforts to succeed going forward. And, according to Surtees, including the right promotions management solution as part of the overall system will not only allow merchants to meet consumer needs, it will go a long way toward providing the ability to get out in front of shopping behaviour and trends, opening up an entirely new realm of marketing and promotions possibilities.

“The most adverse effect of a tactical approach to promotions is the fact that your thinking is by proxy very reactionary. You identify a new promotion type or consumer shopping trend and then look into the things you need to do to develop and implement the things you need to make this happen from a technology perspective, which is often very time consuming and costly to the business. By enabling your systems with the most agile and effective supporting solutions, an organization can eliminate their tactical, reactionary, limited way in which they approach business and instead begin to influence behaviour and trends and broaden their reach, taking any retailer to the next level.”

To learn more about the ways XCCommerce can help your business deliver an exceptional omnichannel retail experience, visit https://xccommerce.com

*Partner content. To work with Retail Insider, contact: craig@retail-insider.com

Canadian Retail News From Around The Web For June 2nd, 2021

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Retail Insider
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Canadian Retail News From Around The Web

Top Stories: National

Central/Eastern Canada News

Western Canada News

Ontario Premier Doug Ford Urged to Open Ontario Retail and Restaurants Immediately as Covid Cases Come Down at a Critical Time: Interviews

By
Mario Toneguzzi
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Indigo at Manulife Centre in Toronto - Photo by Dustin Fuhs

In an open letter to Ontario Premier Doug Ford, the Canadian Federation of Independent Business is urging the provincial government to immediately begin reopening the economy to save thousands of businesses from being forced to shutter their doors permanently.

“Tomorrow is supposed to be the day that our retailers, our restaurant patios, our gyms and our hair salons finally reopen their doors after two long months of province-wide lockdown. Instead, Ontario’s reopening plan has them remaining closed for at least another two weeks, and many for much longer,” said the national organization representing 95,000 small and medium sized businesses, including 38,000 in Ontario. 

“Meanwhile, COVID cases continue a strong downward trend, and estimates show vaccinations have already hit the first-dose threshold for Step 2. Only 42 per cent of Ontario’s small businesses are fully open and only 37 per cent are fully staffed. A mere 27 per cent are at normal revenue levels. All these indicators lag CFIB’s national average and are among the worst in the country, ahead of only Nova Scotia. The situation is dire, and the cost of not moving sooner will be immense.”

James Rilett (Photo Restaurants Canada)

The organization said restaurants in Toronto have been closed to indoor dining for 367 days across the various provincial lockdowns, shutdowns, and emergency breaks. An entire year’s worth of business has been lost and the industry is looking – at minimum – at another 67 days of being closed to indoor dining under the current plan. 

James Rilett, Vice-President, Central Canada, for Restaurants Canada, said the organization remains very frustrated because the province has been shut down for so long. 

“This lockdown is the longest in the world and we don’t think it needs to continue on any longer,” he said. “The government needs to open us as soon as possible.

“The consequences have yet to be seen. I think there are a lot of people who don’t know whether they’ll even be able to continue in this industry and not until they’re open will we see all the consequences. But they’re dire in this industry and it really needs all the help it can get.”

Photo: Julie Kwiecinski

Julie Kwiecinski, director of provincial affairs for Ontario with the CFIB, said while vaccinations are ahead of schedule and COVID cases are trending rapidly downward, businesses are hanging on by a thread.

“And every extra week of closure is an extra week without much-needed sales to help keep businesses afloat. And if you look at other jurisdictions, for example BC non-essential retail was never closed and even under Manitoba’s latest restrictions, retail can stay open at 10 per cent capacity. I mean you look at businesses around Ontario, they are struggling,” she said. “They are struggling to stay afloat.

“This lockdown has continued . . . This is the highest point of desperation for an Ontario business owner. You’re almost at a point where you have nowhere else to go except to slap a closed forever sign on your door.”

Bruce Winder, author of RETAIL Before, During & After COVID-19 and President of Bruce Winder Retail, said it is time to open up Ontario’s economy in a measured way. 

Bruce Winder

“Based on the current case counts and the percentage of the population that have received the first dose of a vaccine, we should be able to allow retailers, restaurants and other sellers to conduct business to a greater degree at once,” he said. 

“For many, June is the most important month from a sales perspective and could help recover some of their year – already brutal based on lockdowns. We must balance the containment of the virus with the economic and mental health of our citizens. A delay would only deepen the damage done to merchants and customers. Unfortunately, the pandemic has become a political football at the expense of everyday business people.”

Karl Littler, Senior Vice President, Public Affairs with the Retail Council of Canada, said the organization has been urging the Ontario government to reopen all retail prior to the currently announced date of June 15, since additional delays are not warranted and are not based on scientific evidence. 

Linkedin: Karl Littler

“If retailers have to wait until June 15, those in Toronto and Peel specifically will have been closed for 144 consecutive days – or a staggering 230 days since the start of the pandemic. It will be even worse for retailers within malls as we remain concerned to hear that they cannot reopen on June 15 unless they have an externally facing door. Opening all businesses with capacity limits can work for health and the economy.  Evidence shows that we are not part of the problem, but we are on board to be part of the solution and to implement reopening measures safely,” he said.

The CFIB said event spaces, concert halls, wedding venues and conference centres haven’t been at full capacity since the pandemic broke out over 400 days ago. Florists, caterers and décor businesses are telling the CFIB that the 2021 wedding season is already a lost cause. If current trends continue, Alberta is expected to be fully open around the same time Ontario allows haircuts, added the organization. 

“Yes, other provinces have used business lockdowns at various points during the pandemic. But no jurisdiction in North America – and very few in the world – have locked down businesses for the length of time businesses have been closed in Ontario. From decisions like closing ski hills and golf courses, to completely shutting down non-essential retailers and hair salons, the phrase “only in Ontario” has been far too common throughout the pandemic. In British Columbia, retailers were never closed to in-store customers,” said the CFIB’s letter to Premier Ford.

The CFIB urged the Ontario government to immediately reopen:

  • All retailers at minimum 20 per cent capacity;  
  • Restaurant patios and limited indoor service;  
  • Hair salons and barbers by appointment; and  
  • Gyms and recreational activities by appointment. 

It is also urging Ontario to go back to the drawing board on the reopening plan to:  

  • Announce significantly earlier reopening dates in line with other provinces;  
  • Provide a detailed timeline for the full economy to reopen, including events and entertainment; 
  • Allow regions with low case numbers and hospitalization rates to reopen much faster; and  
  • Announce a third round of Ontario Small Business Support Grant funding and expand coverage to all businesses that have been locked down or significantly affected by a shutdown or stay-at-home order. 

Canada’s Food Retail Industry Disrupted Amid Pandemic: Brookfield Institute

By
Mario Toneguzzi
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Illustration by: Dorothy Leung

A new report from the Brookfield Institute for Innovation + Entrepreneurship (BII+E), at Ryerson University, identified four key trends in Canada’s food retail industry and their implications for grocery employers and essential workers in Ontario.

The report, Shake-up in Aisle 21: Disruption, Change and Opportunity in Ontario’s Grocery Sector, said the following trends are impacting the industry now and going forward – the accelerated rise of e-commerce; driving loyalty with data; growth of market power plus consolidation; and moving beyond hyper-efficient supply chains.

Sean Mullin

“The COVID-19 pandemic has prompted or accelerated change across the economy, and the food retail industry is transforming more rapidly than it has in a generation,” said Sean Mullin, Executive Director, The Brookfield Institute for Innovation + Entrepreneurship.

“Retailers are diving deeper into e-commerce, shoppers are shifting the way they shop, and jobs and working conditions of essential food retail workers are in the spotlight. While some aspects of these changes may be short-term, others will have lasting implications for the sector as well as for Canada’s consumers. 

“This report captures our effort to better understand these shifts and their effects, their potential impact on food retail work, and the challenges and opportunities that lie in change.”

The food retail industry is an essential part of the Canadian economy with the average Canadian household spend per year on food at $10,311 with 27 per cent of that in restaurants and 73 per cent in food and grocery retail.

“We’re a policy institute that is interested in really understanding some of the most critical issues facing Canada today. We want to understand bold ideas but we want to actually transform them into international real world solutions. Our mission talks about Canada navigating complex forces and the amazing possibilities of the innovation economy,” said Kimberly Bowman, Senior Projects Manager.

Kimberly Bowman

The report said the pandemic has driven significant change in Canada’s $95.5 billion food retail sector, accelerating tech adoption and prompting major shifts in customer behaviour. It has also put a spotlight on aspects of food retail that many shoppers may have previously taken for granted. Empty store shelves have prompted a newfound appreciation for the everyday heroes who have kept our local grocery stores stocked and operating, it said.

The report also examines the implications of these and other changes for Ontario’s grocery employers and workers. Shake-up in Aisle 21 is part of an ongoing Brookfield Institute project to identify job pathways for Canadian workers in industries being disrupted by new technologies. The Job Pathways in Food Retail project, in partnership with the United Food and Commercial Workers (UFCW), is funded by the Government of Ontario and JPMorgan Chase & Co.

Bowman said there is incredible power in skilled algorithms. There’s also huge potential in labour market information. But all this has to be taken from a human-centered perspective.

“You’ve got to think about the people and that includes both the employers who are looking for skilled workers and the workers who are looking for jobs where they can apply what they already know how to do well,” said Bowman.

“That’s what we put into practice in this project. If there’s going to be disruption in grocery in the automated cashiers coming in and there’s suddenly demands for cashiers, what do those tens or hundreds of thousands of people do? Where could they pivot to? How can we use (data) and labour market information and combine it with good on the ground research to understand who these workers are, what they’re interested in, what are some of the in-demand jobs they could transition to without a lot of additional training or school . . .  And how do we tap that list that comes out of the skilled algorithm?

“As a researcher, it became very apparent very quickly how many smart people work in retail and have built their careers working in an industry that is complex, sophisticated and ever-evolving. What we’re not trying to do in this report is suggest any of that is not true. You very quickly understand just how many changes people are juggling around supply, around omnichannel, around e-commerce. It’s breathtaking.

“Just to acknowledge how important and critical and sophisticated this sector is while at the same time asking people who have the opportunity to influence to sit back and think about where they could be deploying that strategic insight, those capabilities. We see a tremendous amount of investment in e-commerce and in the infrastructure for that which is entirely appropriate – certainly in food retail.”

The report said disruption in Ontario’s food retail landscape is resulting in investments and decisions that can shape the sector for decades. 

“Canadian food retailers employ hundreds of thousands of Canadians in communities across the country, in customer-facing jobs that are likely here to stay,” said the report. “As these retailers adapt to changes—including the growth of e-commerce, data-driven strategies, market consolidation, supply chain adaptation, shifts in consumer habits, and the pandemic— they are making decisions that can transform food retail, and jobs within the sector.”

It said the research suggests a number of areas where the sector could continue to evolve into the future:

  • The food retail industry—by virtue of its scale and conditions—can be a powerhouse for innovation, said the report.  “While grocery may not be top-of-mind when Canadians think of the innovation economy, recent investments show that Canadian food retailers are rapidly innovating—alongside evolving consumer expectations and demand. At the same time, the industry faces calls for restraint to ensure its power does not result in an environment that constrains innovation or healthy competition, or that fails to deliver fairly for key stakeholders including suppliers and staff.”;
  • The food retail industry employs hundreds of thousands of essential workers in Canada, yet many food retail jobs offer poor conditions— low pay, insufficient hours or precarious employment, and tend to see high turnover, said the report. “The COVID-19 pandemic has underscored the important role of food retail and food retail workers. There is a disconnect between the value of these roles, the risk associated with front-line work and the relatively low wages and job quality experienced by many workers. The industry is being challenged by many to find a better balance between profitability, price, and their responsibility to essential workers.”;
  • The report said companies tend to be behind the times when it comes to managing the skills, talent, and expertise of people already on their payroll. “Already sophisticated digital businesses, large food retailers tend to lag on adopting digital internal talent tools. Some, however, are starting to modernize talent strategies and adopt technologies to better map and leverage talent they already have in their labour force.”;
  • Customer service skills are critically important and highly sought after by employers, added the report. “In line with past research, these same skills remain poorly codified and not economically valued. Employers rate the ability to deliver an excellent customer experience as a desirable skill, but also one of the most difficult for them to identify, train, and recognize.”; and
  • As the sector changes, some workers may face disruption, said the report. “Workers in this sector may consider transitions, either for new opportunities or as a result of job-related disruption. Customer service remains in high demand. Given challenges associated with pay and job quality, some of these workers may wish to investigate pathways into other occupations. Identifying job transition pathways requires an understanding of how jobs are changing, local employer demand, and worker preferences. We investigate these opportunities in our upcoming report.”

Report Illustration by Dorothy Leung

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